Thai flood recovery cost estimated at 25 billion dollars

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Thai flood recovery cost estimated at 25 billion dollars

Bangkok - Thailand needs to invest about 25.2 billion dollars over the next two years to rehabilitate the economy in the wake of this year's devastating monsoon floods, the World Bank said Monday.

Thailand sustained 640 billion baht (21.3 billion dollars) in damage and 717 billion baht (23.9 billion) in lost opportunities, it said in a report on the impact of the disaster.

Of the 1.4 trillion baht in combined damage and losses, 94 per cent was borne by the private sector, the World Bank said.

The floods were the worst Thailand had suffered in five decades. They killed 615 people and disrupting the global supply chains in the electronics and automotive sectors after inundating hundreds of factories.

The World Bank lowered its economic growth forecast this year to 2.4 per cent, from its pre-flood estimate of 3.6 per cent.

Thailand could stage a rapid recovery in 2012 with 4-per-cent growth in its gross domestic product if investments are made in a massive rehabilitation programme, the bank said.

The 755 billion baht it recommended in spending should be used to get the economy back on track and make it more resilient to future climate shocks.

'We are recommending a large investment in water-resources management,' said Annette Dixon, the World Bank's Thailand director.

'Some of that is work that needs to be done to rehabilitate damaged infrastructure and some of it is for strengthening of the system to deal with an increasing risk of extreme weather events.'

'Some of that is work that needs to be done to rehabilitate damaged infrastructure and some of it is for strengthening of the system to deal with an increasing risk of extreme weather events.'

The bank advised the government to prioritize future investments and to maintain fiscal prudence in light of the uncertainties faced by Thailand's two largest markets, the United States and Europe, which buy 35 per cent of its exports.

But with high fiscal reserves and an anticipated current account surplus of 2.6 billion dollars this year, the bank said the government could afford to invest in the recovery.

Dixon cautioned that the government should reorder some of its populist policies that it promised before the July general election.

That platform promised to hike the minium wage nearly 50 per cent on April 1, pay higher-than-market prices for farmers' rice and slash taxes on first-home and first-car purchases.


-- The Nation 2011-11-28