bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

President Bill Clinton has given timely backing for Thailand's efforts to shrug off its worst economic crisis in recent history.

 He said in a letter to Prime Minister Chavalit Yongchaiyudh he was confident that, with the help of organisations such as the International Monetary Fund, Thailand would pull through.

 Mr Clinton's encouragement is a rare piece of good news at the start of what promises to be a tense week for the government.

 It faces an IMF review team armed with the knowledge that Thailand is slipping behind in its rehabilitation programme.

 General Chavalit last night responded to months of intense pressure when he said he might resign at the end of the week to 'allow other people a chance'.

 Government dithering and infighting finally forced the baht through the 40 to the US dollar mark last week. It traded at 26 baht to the greenback before its flotation in July.

 Bangkok-based analysts were unimpressed by General Chavalit's promise because they do not expect anyone else in the ruling six-party coalition to do much better.

 Whichever member of the coalition holds the reins, they will have to deal with an IMF deeply concerned about the government's slow moves to cut away dead wood and revive the economy.

 IMF Asia-Pacific director Hubert Neiss urged General Chavalit yesterday to urgently tackle reform of the financial sector, government spokesman Varathep Rattanakorn said.

 Mr Neiss had told General Chavalit the new Financial Restructuring Agency (FRA) - due to be formally approved by parliament this week - was a key factor in restoring investor confidence.

 The FRA effectively is charged with killing off bankrupt firms in a financial sector crippled by more than US$33 billion in non-performing loans, while trying to squeeze value out of the bad debts.

 The IMF is widely expected to have to rejig its reform programme because Thailand has little chance of meeting certain targets, such as 3.5 per cent GDP growth next year.

 The fund also might rap Thailand on the knuckles, perhaps publicly, because no financial institution is close to being killed off three months after two-thirds of the finance sector effectively was declared bankrupt.

 Last month's rapid U-turn over a one baht tax rise on every litre of petrol was widely seen as symbolic of the government's lack of toughness in dealing with the crisis.

 'Its just a big muddle . . . the government has neither the will nor the knowledge to go through with the [IMF] programme,' a Thai banker said.

 If the IMF wields the stick, then President Clinton's letter is the carrot offered to a country whose currency flotation triggered the Asian collapse that spilled into global markets last month.

 'I want to assure you that the United States will continue to work with you and the international financial institutions to address Thailand's current financial difficulties,' Mr Clinton said.

 'I am confident that this effort, combined with the dynamism and energy of its people, will ensure the success of this mutual endeavour.'  Mr Clinton's message was apparently in reply to a written vow by General Chavalit to return Thailand to sustainable economic growth.

 The US last week agreed to contribute $3 billion to the IMF's $23 billion rescue fund for Indonesia after earlier leaving Japan and other Asian countries to top up the $17.2 billion rescue fund for Thailand.

 That was before the 'Tom Yam' effect - intense scrutiny of bank lending, overvalued property and general growth prospects - hit the rest of Asia and triggered tumbles in the world's markets.

 Indonesia's swift moves to close 16 banks last week contrasts sharply with the indecision in Thailand.

 Four months after the baht flotation forced the government to admit that two-thirds of the country's finance houses were in trouble, it still appears loath to take decisive action.



Clinton sends get-well wish for Thailand's economy