Thailand’s beleaguered finance minister, Pridiyathorn Devakula, all of a sudden resigned on Wednesday. The resignation deepened the continuing crisis to hit the military-installed government struggling to restore stability and confidence after the September military coup. The Thai government was completely unaware of these developments and evidently caught off guard by the resignation. The government has not immediately announced a successor for Pridiyathorn. Moreover, the resignation has seriously questioned the future direction of policy-making. There are reports suggesting that Pridiyathorn quit as he was in disagreements with some cabinet ministers and the appointment earlier this month of Somkid Jatusripitak, former deputy to Thailand’s deposed premier, as an economic adviser. Moreover, Somkid resigned after a week in the service. Pridiyathorn had earlier held the post of governor for Bank of Thailand and was roped in by Surayud to prop up confidence in the economy after a military coup last year. Currency controls imposed in December last year set off nation’s stock market’s steepest fall in 16 years. Somkid was appointed for the task to explain government policies to foreign investors after company ownership curbs last month enticed condemnation. Apart from the controversial appointment of Somkid the embattled finance minister was also not happy with certain minister who had acted in favor of a certain media what Pridiyathorn thinks was against the law. Pridiyathorn has been criticised for a number of policy decisions, including a move to tighten rules for foreign companies that operate in the country.
The International Monetary Fund has assured that Asian economies will not face any substantial financial crisis amid the heavy influx of global capital. Developing Asian economies are successfully attracting healthy foreign direct investment and IMF suggested that to keep healthy pace in the economy, each economy should introduce new measures to manage huge inflows of foreign funds and exploit them for accelerating their economic expansion. IMF Managing Director Rodrigo Rato said: Capital inflow is certainly a worldwide phenomenon. For Asian economies, that reflects a lot of things including increased liquidity and growing attractiveness of the economies. I believe that is good news A decade ago, major Asian economies were in a great crunch, BoP were not at its best, currency values were lynching down incessantly, but open market policy put economies back on the competitive international business dais. Foreign players are attracting toward the rich unexplored resources of Asian region and open market policy has opened the door for investors. With minor domestic players, foreign moneylenders are putting huge money in the market and successfully gaining strength. Service sector is the biggest gainer, but secondary sector is also accelerating from FDI. Minor economies, like Thailand, too are leaving their darker period behind and making considerable progress. China, India and Japan are leading the path, whereas South East Asian nations are backing them firmly. However, for the overall development, IMF has suggested Asian economies to become more rational for their currency policies. China impeached for unnecessary controlling its currency wherein western nations seeks more flexibility in its exchange rate. As Rato said: Greater exchange rate flexibility is not only in China’s best interest but would allow other Asian countries to appreciate with less concern about competitiveness Image Via: Reuters