Thailand to get $1.2b in bailout from ADB

Thailand to get $1.2b in bailout from ADB

MANILA (AFP): The Asian Development Bank (ADB) said yesterday
it would provide US$1.2 billion over the next three years as part
of a multilateral effort to stabilize the Thai economy.

The $1.2 billion is part of $16 billion raised Monday by the
International Monetary Fund (IMF) to bailout Thailand which
floundered following speculative attacks on the baht.

Mitsuo Sato, ADB president was quoted in the statement as
saying he believed the "the Thai economy was fundamentally
strong" and that "effective implementation of the stabilization
program will help overcome current economic difficulties."

Thailand must restructure its industrial sector to maintain
international competitiveness and address the social costs of the
financial and economic sector reforms, Sato said.

The ADB has lent $3.82 billion to Thailand for 73 loans since
1968, the statement said.

Present at the IMF meeting aside from Thailand were Australia,
Britain, Canada, China, France, Germany, Hong Kong, Indonesia,
Japan, South Korea, Malaysia, Singapore, and the United States,
as well as the ADB and the World Bank.

Thailand went to the IMF for the fund's biggest assistance
package since the Mexican bailout of December 1994 after spending
billions of dollars on a crumbling finance sector and a failed
defense of the baht.

Australia

In Sydney, officials said yesterday foreign office
intervention prompted Australia to double its pledge to
Thailand's crumbling economy and lend US$1 billion as part of an
IMF rescue package.

Australia had proposed a contribution of $500 million but
Foreign Minister Alexander Downer argued that in the interests of
regional integration Canberra should match the support offered by
Hong Kong, Malaysia and Singapore.

Australia is one of seven Asia-Pacific region nations to
contribute.

"Through participating in this financing package, Australia
will be joining other key countries in the Asia region to support
Thailand and to ensure continued economic stability in the
region," Treasurer Peter Costello said in a statement.

"The arrangements are important for Australia's interests and
the region."

Australia's involvement will be made through a foreign
currency swap arrangement between the Reserve Bank of Australia
and the Bank of Thailand.

The terms and conditions have yet to be negotiated.

It is by far Australia's largest such contribution to the IMF
and is 20 times its recent contribution to an IMF bailout for
Papua New Guinea.

The Australian Financial Review said that if countries like
Australia, Japan and the U.S. were to abandon Thailand now, they
would demonstrate that their exhortations and dialogues on
democratic values were mere posturing.