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UN-ESCAP warns of severe hardship for millions

External factors could affect oil prices

Thailand ready to establish FTA with US, says MOC

UN-ESCAP warns of severe hardship for millions

Five years after the 1997 financial crisis, many workers in Southeast Asia are not far from extreme poverty, according to the authors of a new UN-ESCAP publication. “Protecting Marginalized Groups During Economic Downtown: Lessons from the Asian Experience,” provides some sober reading and its conclusion call for determine action.

Southeast Asia, is still recovering from economic shock that accompanied the sudden devaluation of regional currencies. But the people worst affected were, and continue to be, individuals toward the bottom of the socio-economic ladder.

Many countries in the UN-ESCAP region still have few or no social safety nets, like unemployment benefits, and it is this disadvantaged group that would suffer most during the onset of a fresh and rapid recession, depression, or currency devaluation. The main fear is job loss due to downsizing and/or restructuring.

The report warns that another financial crisis - or sudden economic downturn - could result in more severe hardship for millions of people across the region, especially for those in the so-called “informal sector”, many of whom are self-employed.

This study, through quantitative and qualitative surveys conducted in three countries, Indonesia, South Korea and Thailand, also finds that most of the program introduced following the last financial crisis did not benefit persons who lost jobs in the urban formal sector, which is especially vulnerable to fluctuations in the economy and competitive pressure.

Women are affected disproportionately.

Aggravating the situation is the pattern of shifting production centers, according to changes in competitive and comparative advantages across the region, further perpetuating the boom-and-bust cycle. The revolution in ICT and a freer flow of goods, services and technologies further exacerbate the situation.

The study advises governments to act now to avoid the socio-economic turmoil that a fresh downturn or crisis could cause by initiating a package of measures: Longer-term public works program, coordinated between national, regional and local governments; the creation of national unemployment insurance schemes; micro-credit facilities to be made available to the unemployed; information and counseling centers for small and medium-sized enterprises (SMEs), and further encouragement of the long-standing Asian tradition of developing networks of families, friends and communities. (TNA)

External factors could affect oil prices

A recent report out from Thai Farmers Bank Research Center says external factors should be closely monitored since they may affect domestic oil prices, although world oil prices have recently dropped.

The Bangkok-based research center said that external factors to watch closely include over-quota production of crude oil of the Organization of Petroleum Exporting Countries (OPEC), easing tensions between the United States and Iraq, and selling of oil on the future markets by traders in large bulk.

Oil prices in the world market have dropped from the highest recorded average level in late September by US$5.52 a barrel, which amounts to18.8%, to around US$23.87 a barrel.

However, the report warned that the global oil market could still be vulnerable in the near future due to such uncertain factors as international terrorism, halt of over-quota oil production of OPEC, and renewed tension between the United States and Iraq, which would most likely cause a renewed oil price hike.

Current oil prices are higher than the average level of US$19.47 a barrel at the beginning of this year by US$4.4 a barrel, or 22.6% percent.

PTT Plc recently announced a new price cut of 0.20 baht a liter for all its types of gasoline at its petrol stations nationwide. With the new reduction, the retail price of PTT benzene 95 in Bangkok and its peripheral areas is 15.59 baht a liter; while the prices of PTT benzene 91 and diesel in the areas are14.59 baht and 14.19 baht respectively.

The new gasoline price cut followed a recent drop of oil prices in the world market due to continued over-quota production of OPEC countries, increase in the United States’ domestic oil reserves, and an agreement by Iraq to allow UN inspection of its suspected weapons sites without conditions.

Gasoline prices in Singapore also dropped to US$ 28.35 a barrel for benzene 95, and to US$29.98 a barrel for diesel. (TNA)

Thailand ready to establish FTA with US, says MOC

Commerce Minister Adisai Botharamik says that Thailand is ready to make an economic cooperation agreement with the United States or even establish a free trade area (FTA) with the country. He said he discussed progress being made in working out a bilateral economic cooperation between the US and Thailand with the US trade representative during a meeting in Manila on November 27th.

The US was asked to outline the framework of cooperation between the two countries in many areas including intellectual properties and electronic commerce to ensure smooth coordination and implementation.

A meeting of senior officials of the two countries will be held during January-February 2003 to follow up the task.

Dr Adisai said Thailand would apply the FTA agreement between the US and Singapore as a guideline for a similar agreement with the US. He said the US wanted Thailand to liberalize communications, insurance and financial services while Thailand wants the US to help facilitate goods importation.

Dr. Adisai said believes Thailand would not be placed at a disadvantage if it liberalizes these services because many private companies have already adjusted themselves to accommodate the changing business environment. (TNA)