Oct. 19 (Bloomberg) -- Thai Prime Minister Yingluck Shinawatra called for calm and asked residents to refrain from damaging sandbag barriers after the government opened gates to allow floodwaters to drain through six canals in Bangkok.
“I want to beg people, please don’t destroy the levies,” she told reporters today. “If you do, it will create a bigger impact and be harder to control.”
Thai authorities are aiming to protect the capital from a deluge of water released from northern dams this month that has destroyed farmland, shut factories and disrupted supply chains across Asia as it sweeps across a flood plain the size of Florida. The disaster has claimed 315 lives since July and left millions seeking dry ground.
The nation’s worst floods in five decades have closed more than 1,000 factories operated by companies including Honda Motor Co. and Canon Inc. and left manufacturers such as Toyota Motor Corp without supplies. It will take about 40 days for the 12 billion cubic meters of water, enough to cover Connecticut with about a meter (3.3 feet), to drain into the Gulf of Thailand, Irrigation Department spokesman Boonsanong Suchatpong said.
“The situation should be back to normal around the end of November,” he said. “This is on the condition that no barriers are destroyed.”
Thailand kept interest rates unchanged for the first time this year, ending its longest series of increases since 2006. The Bank of Thailand kept its benchmark one-day bond repurchase rate at 3.5 percent, it said in Bangkok today, a decision predicted by 16 of 17 economists surveyed by Bloomberg News. One analyst expected a rate cut.
The damage caused by the floods may amount to as much as 120 billion baht ($3.9 billion), Governor Prasarn Trairatvorakul said Oct. 14. The Cabinet yesterday agreed to widen the 2012 budget deficit by 50 billion baht to fund flood reconstruction, said Finance Minister Thirachai Phuvanatnaranubala, who estimated this week the floods may erase as much as 1.7 percentage points off growth this year.
“They probably need to do more because fiscal policy now would not just be focused on consumption,” Santitarn Sathirathai, a Singapore-based economist at Credit Suisse Group AG, said today in a Bloomberg Television interview. “To restore investor confidence, they need to invest in water management and infrastructure.”
About 600,000 workers are temporarily jobless after floods swamped their factories, Somkiat Chayasiwong, permanent secretary for the Labor Ministry, said today on the state-run NBT channel. Western Digital Corp., which relies on Thailand for 60 percent of production, may see exports from the country slide as much as 40 percent to 120 billion baht this year after floods shut two of its plants, Industry Minister Wannarat Charnnukul said yesterday.
“This will surely affect the global supply chain and also consumers because Western Digital is a key producer in the global market,” Wannarat told reporters after meeting with executives from the computer disk-drive maker. The company counts Hewlett-Packard Co., Dell Inc. and Acer Inc. among its customers.
Thailand’s baht strengthened after retreating from a three- week high yesterday on concern that a disruption in manufacturing will hurt exports and economic growth, gaining 0.2 percent to 30.68 per dollar at 3:44 p.m. local time. The benchmark SET Index fell 1.5 percent, with Thai Reinsurance Pcl sliding 5.5 percent, extending a 20 percent decline this month.
On Bangkok’s northern border, festive music played from loudspeakers as volunteers sorted 10-kilogram sandbags, filled them up and tossed them onto six-wheeled dump trucks. Temporary shelters provided respite from the sun as workers handed out water, soda, fried rice, muffins and other snacks.
“Saving this area means saving my home,” said San Santayanont, 36, taking a rest after loading trucks with sandbags. He lives and works in a nearby district.
“This is the last line of defense basically for Bangkok,” former Finance Minister Korn Chatikavanij said yesterday. He helped fill sandbags with former Prime Minister Abhisit Vejjajiva, whose party lost to Yingluck’s Pheu Thai in July elections.
“We don’t think there will be mass flooding of northern Bangkok in the way that we saw in other provinces,” Korn said. “Inner Bangkok is even more safe.”
Abhisit said Bangkok will continue facing a threat “for a while” as the mass of water moves through the city. Yingluck’s government caused confusion and “underestimated the force of nature,” he said.
Along the floodwall, water seeped past sandbags in some areas as workers stacked them up to build a barrier bigger than two meters next to a canal brimming with water. Some houses made of tin and wood next to the canal were partly submerged, with residents saying they were concerned water would overwhelm them as has happened in provinces to the north.
“I’ve never seen water this high,” Urai Riengkua, 43, said as she cradled her 14-month-old grandson. “I want to move but I don’t know where to go. If the water surges, I will take my grandchild and run as fast as I can.”
--With assistance from Supunnabul Suwannakij and Anuchit Nguyen in Bangkok and Rishaad Salamat in Hong Kong. Editors: Tony Jordan, Patrick Harrington
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