Saturday, January 08, 2005

We don't want your money

Thai prime minister Thaksin Shinawatra has told the international community that, rather than giving financial aid, it could help Thai tsunami victims directly by giving back tax and trade concessions for Thai exports, including shrimps.

In his weekly talk to the nation on Radio Thailand yesterday, Thaksin said he had told visiting ministers it was not money that was wanted but technical assistance. Even better, he said, they could restore the Generalised System of Preferences (GSP) for marine exports to the EU.

Thaksin said he told British Foreign Secretary Jack Straw that suspension of tariff privileges on Thai shrimps by the EU was unfair. "I told him he should correct that unfairness rather than giving us money," he said.

The prime minister has good reason to complain. Prior to 1997, fresh shrimp and preserved shrimp from Thailand enjoyed a tariff rate of about 4.2 per cent and 7 per cent respectively. However, in 1999 tariff rates were increased to punitive levels of 12 and 20 per cent, respectively.

As a result, Thai shrimp exports to the EU have collapsed, from 33,000 tons in 1995 to 5,000 tons in 2003. Thailand's market share now stands at a meagre 0.7 percent of the EU's total shrimp imports of about 700,000 tons a year.

Even worse, the preferential status has been given to the former French colonies of Senegal, Madagascar and French Guiana, the waters of which are largely fished by heavily subsidised EU fleets, with very little of the benefit going into the local economies.

Somsak Taneetatyasai, president of the Thai Shrimp Association, said that if Thailand regained its GSP from the EU, its exports would grow to about ten percent of the EU market. This would increase production capacity by 140,000 to 150,000 tons a year from the current level of about 320,000 tons a year.

A current rates, this would be worth up to £400 million a year to the Thai economy - and has cost the economy over £3 billion since the higher rates came into force. This is considerably more than the £1.5 billion aid expected from the tsunami relief fund to cover the whole region – and the income from selling shrimps would provide real jobs for the fishermen about which so many hacks are shedding crocodile tears.

But then, giving aid to these needy third-world countries, and creating a dependency culture, makes one feel so much better, doesn't it?

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