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Thailand seeks to use chickens to limit foreign debt

Just how many chickens is a fighter jet worth?

Thai economists are currently trying to work out the answer as the government is hoping to barter chickens and rice to pay for everything from military aircraft to subway trains. When Thai Prime Minister Thaksin Shinawatra opened the bidding on Thursday for Thailand's 1.7-trillion-baht (US$44 billion) public works program, he said thst his government was interested in alternative "financing mechanisms" -- namely, bartering.

The highlight of the new projects is an expansion of Bangkok's public transport system, expected to cost some 550 billion baht. The defense ministry also wants to barter for the purchase of fighter jets it is considering to buy from Russia, Sweden or the US.

Thaksin's government believes that bartering for such big-ticket items would help keep the country's foreign debt ratio below 50 percent of GDP.

The scheme envisions trading farm goods already in government stocks, such as surplus rice, instead of using cash for at least part of the payment to foreign companies.

To that end, a special barter trade committee has been created in the Commerce Ministry to assess the bids for the public works projects and negotiate how much chicken, rice or tapioca could be used to finance the deal.

"When they say they've settled on ... the barter trade, the committee will make the decision which commodity they will use for barter," Tikhunporn Natvar of the ministry's department of foreign trade said.

Nazir Rizk, who heads the Thai subsidiary of French engineering conglomerate Alstom, said he doubted that barter was the most attractive payment option for foreign companies.

"It is one solution, but ... how you put it in place remains unclear ... A company like us, we don't do barter, we sell trains. We cannot sell chickens," he said.
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