With diesel fuel subsidized at 18% below market prices, food export revenues are guzzled up by oil imports.
ENERGY: Thailand poised for painful price shocks by Parista Yuthamanop
Thailand will inevitably suffer impacts from higher energy prices unless it improves existing regulations and removes price distortions to enhance energy efficiency, say economists.
Thailand's determination to promote energy efficiency, a stand that put it at the forefront of many countries in the 1970s, has long since dimmed because of price distortions created by many governments, said Jeeva A. Perumalpillai-Essex, sustainable development leader for Southeast Asia with the World Bank.
Currently, the transport sector is the largest energy consumer at 36%, followed by the industrial and commercial sectors. Transport operators enjoy diesel that is priced 18% below real market levels. Natural gas used as vehicle fuel is also heavily subsidised.
"The key challenge is low and underpriced energy, the lack of institutional capacity as no one championed [conservation], and misplaced incentives," Ms Jeeva said at a recent forum held by Sasin Institute for Business Administration at Chulalongkorn University and the World Bank.
Tenants pay utility costs in Thailand, so landlords lack incentives to promote efficiency. Consumers also lack awareness as they favour speed, price and flashiness in cars.
The policy framework sports savings measures. Thailand has an energy conservation law and energy conservation funds, but serious implementation is lacking. Policymakers should improve information disclosure on details of subsidies and policymaking process to help people better understand, she said.
Yanyong Thaichareon, an economist with the Bank of Thailand, said energy prices were unlikely to return to low levels given fundamental demand, notably from China's huge and growing economy. As well, commodities are an increasingly important asset class for in many large investors' portfolios.
High and volatile oil prices will be a challenge for the government when it attempts to abandon existing subsidies. If the government runs out of subsidy funds and is forced to float prices immediately, inflation will jump.
The lifting of subsidies needs to be well communicated and well-timed when the oil price decreases. The government should lift the subsidies gradually. It should not allow itself to get stuck in a corner and have to lift all subsidies immediately," he said.
Most countries have improved their energy efficiency since the oil crisis in the 1970s, but Thailand is now among the countries with highest energy intensity per unit of output.
"In 2010, oil import bills accounted for 7% of gross domestic product. We export food at 6.3% GDP. This means that the money we earned from exports of foods is used for imports of oil," Dr Yanyong said. "China and India can afford energy consumption, but they have more energy efficiency than Thailand.
Frederico Gil Sander, country economist with the World Bank in Thailand, said the rise in food prices, which has underpinned exports and domestic demand, had allowed the country to cope with high commodity prices. Inflation is kept artificially low in Thailand, Indonesia and Malaysia because of various subsidies on energy.
But the country needs to pay more attention to improving productivity in the farm sector through R&D to make crops more resilient to climate change, and to lift capacity of water management
"In Thailand, farm income has been going up faster than inflation. There are favourable price dynamics on exports, although advanced economies where the final demand is, are still weak. We expect domestic demand to run on all cylinders," said Dr Gil Sander.
Kobsak Pootrakul, an executive vice-president from Bangkok Bank, warned crop prices could ease in the future. Crop prices are girded by a rise in real demand from China and India. Climate change and panic buying by governments and quotas set on exports by producing countries concerned about domestic supplies add to supply constraints.
(Source: Bangkok Post, ENERGY: Thailand poised for painful price shocks, 3/05/2011, Parista Yuthamanop, link)
poised - about to do or achieve something ได้มาซึ่ง
price shocks - large changes in important prices like oil that have a negative effect an economy (example: if oil increases sharply, the cost of most good will increase sharply also)
inevitably - certain to happen, cannot be prevented or avoided อย่างเลี่ยงไม่ได้
suffer - to experience physical or mental pain
impacts - effects on different people and things
efficiency - doing a task well without wasting time, money, resources, achieving a lot with few resources, waste little time, energy and resources in doing a task (minimize time, energy and resources in performing a task) การทำงานอย่างมีประสิทธิภาพ คุ้มค่าเวลาและใช้พลังงานหรือต้นทุนในการผลิตน้อย เพื่อให้ได้ผลผลิตมาก
energy - a form of power such as electricity, heat, or light used to make things work and run such as cars and machines
energy efficiency - using low amounts of energy to get work done
regulations - rules made by the government to control how some activity is done กฎระเบียบ ระเบียบปฏิบัติ, ระเบียบ ข้อบังคับ
price distortions - when prices are not the same as market prices determined by supply and demand (so shortages or surpluses likely)
enhance - to improve the quality, amount or strength of something ทำให้ดีเพิ่มขึ้น, ปรับปรุง
determination - when a person works very hard to achieve some goal
promote - work to make something happen
stand - a viewpoint or opinion about some issue
at the forefront - at the most advanced position, the most advanced in some activity, doing more than others in some area
dimmed - grown weaker
sustainable - able to be successfully continued for a long time without prolems that cause it to end ยั่งยืน, ถาวร, แบบยั่งยืน ที่ดำเนินต่อไป
development - the gradual growth and formation of something
transport - to move people or things from one place to another ขนส่ง
sector - a part of the economy ภาคเศรษฐกิจของประเทศ (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)
consumer - someone who buys and uses goods and services ผู้บริโภค
commercial - for business purposes
commercial sector - private sector, all the privately owned businesses in an economy
operators - companies operating a certain kind of business
vehicle - a machine that you travel in or on, especially one with an engine that travels on roads, e.g., a car, bus, van, truck, etc. ยานพาหนะ
fuel - a substance such as oil, gas, coal, or wood that produces heat or power when it is burned
subsidised - paid part of the cost of something ให้ความช่วยเหลือด้านการเงิน
key - important คนสำคัญ
challenge - something that needs a lot of skill, energy, and determination to deal with or achieve สิ่งที่ท้าทาย, การท้าทาย
key challenge - the most important challenge, the most important difficult thing that needs to be done
lack - does not have ขาดแคลน
institutions - social institutions, such as the way that government operates or the way that civil
capacity - the ability to do something
lack of institutional capacity - the social institutions of a country are not able to make something happen that should happen (for example: gas prices should reflect the real cost and market prices, but politicians need to win votes in elections so they have a policy that makes these prices lower)
X championed Y - X worked hard to make Y happen
conservation - energy conservation,
incentives - a reward to encourage people to do something สิ่งกระตุ้น, รางวัล ผลตอบแทน
misplaced incentives - the wrong incentives or rewards for a situation (incentives don't help you achieve your goals)
conservation - the protection of plants and animals from dieing out and disappearing (extinction), natural areas, and interesting and important structures and buildings, especially from the damaging effects of human activity การอนุรักษ์ธรรมชาติ, การป้องกันความสูญเสีย, การสงวนไว้
forum - a place where people can express their ideas and opinions, discuss and debate important issues การประชุมแสดงความคิดเห็น
tenant - a person or company that rents real estate (office, building, apartment, home, etc)
landlords - the owners of land or real estate (that they rent out to "tennants")
utility - some basic service like electricity or water (usually provided by the government or a large monopoly)
awareness - the state of knowing about something การรับรู้, การทราบ
X favours Y - X likes Y more than other things
policy - a plan of action to guide decisions and achieve outcomes (See Wikipedia) นโยบาย
framework - a system of rules, ideas or beliefs that is used to plan or decide something ขอบข่ายงาน, โครงร่าง
measures - actions taken to solve a problem มาตราการ
funds - money needed or available to spend on something เงินทุน
implementation - making a plan into reality, actually do or carry out a plan, execution of a plan, making sure that something that is planned actually gets done (See glossary) นำ (แผนการ) มาบังคับใช้
improve - to make better ทำให้ดีขึ้น
disclosure - making facts known to the public
subsidies - when the government pays part of the cost of some activity to encourage it เงินช่วยเหลือจากรัฐ เงินสนับสนุน
process - a series of actions that you take in order to achieve a result แนวทางปฏิบัติ, กระบวน, วิธีการ
fundamental - very important and essential พื้นฐาน รากฐานที่สำคัญ
demand - the need and desire to buy goods and services by households and businesses
fundamental demand - essential demand that will not disappear (needed to meet increasing demand for business and population growth)
notably ... - a good example of this that should e noted is ....
commodities - with every unit the same (every kilo of rice is the same, for example), usually bought in large quantities สินค้าที่ซื้อเป็นจำนวนมากๆ
asset - something owned by a person, company etc., particularly money and property ทรัพย์สิน
volatile - moving up and down and changing quickly and unpredictably, the public does not know how to react and plan for the future เปลี่ยนแปลงอย่างทันทีทันใดและโดยคาดการณ์ไม่ได้
abandon - to stop doing an activity before you have finished it เลิก
subsidy - an amount of money that a government or organisation pays to help to reduce the cost of a produce or service เงินชดเชยที่รัฐเป็นผู้จ่ายให้
float prices - allow prices to move up and down freely in response to more supply or demand (instead of trying to fix them and creating artificial shortages or surpluses)
immediately - happening with no delay; right away ทันที
inflation - the level of prices rising in the economy as a whole (See Wikipedia and The Economist glossary) ภาวะเงินเฟ้อ
lift - to end a warning, a restriction, etc. ยกเลิก
lifting of subsidies - the ending of subsidies
crisis - an urgent, difficult or dangerous situation วิกฤต
intensity - strength ความเข้มข้น
energy intensity per unit of output - how much energy is used to produce each unit of a good
import - to buy or bring in products from another country นำเข้า
bills - money owed to others that must be paid quickly
domestic - relating to a person's own country ภายในประเทศ
gross domestic product - the total income for a country
afford - to have enough money to be able to pay for something มีเงินพอจับจ่าย ซื้อหา
consumption - using, eating or drinking something การบริโภค money spent by households and families on goods and services (See Wikipedia)
cope - to deal successfully with a difficult situation or problem รับมือกับ (See glossary)
pay attention to - devote more time and energy to something (watching it more closely
productivity - producing more with the same amount of inputs (labour, energy, etc) การผลิตสินค้า workers producing more goods in the same amount of time
resilient - quickly regain strength and health again after an illness or other problem ความสามารถในการฟื้นคืนสู่ปกติ able to succeed after failure, able to get strong after being weak
climate - the general weather conditions usually found in a particular place สภาพอากาศ
income - money that people receive from work or some other source, used for household consumption and savings
farm income - money that farmers receive from selling the crops they grow
run on all cylinders - when an engine (with "cylinders") is working as hard as it can
executive - the highest level managers in a company
ease - to make less severe บรรเทา (meaning: prices fall)
girded by - supported by, caused partially by
climate change - long-term patterns of changing climate patterns due in part to human effects on the environment such as overuse of fossil fuels (oil, gas, coal) (See Wikipedia)
panic - a sudden intense uncontrollable fear, a sudden strong feeling of fear and confusion, which makes you act without thinking carefully ความหวาดวิตก (See glossary)
panic buying - when many people star buying suddenly because they are afraid of something
quotas - a limited amount (that a participant is allowed)
concerned - worried about something มีความกังวล
constraints - limits
supply constraints - limits on the amount of a good that is available to be bought
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