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http://online.wsj.com/article/SB10001424052970204479504576637970215290718.htmlBy JAMES HOOKWAY
BANGKOK—Recriminations over the handling of Thailand's worst floods in half a century are causing fresh setbacks for Prime Minister Yingluck Shinawatra as the financial cost of the disaster continues to mount and her government firmed up plans to inject billions of dollars to shore up the country's faltering economy.
A flood victim on a raft used a paddle to collect relief supplies dropped from a military helicopter in Pathum Thani Province, just north of Bangkok, on Monday.
Ms. Yingluck's biggest problem, analysts say, is the haphazard way information about the flood has been released, summed up by the science minister's hasty call last week for evacuating part of the capital.
The erratic information flow has unnerved residents and spooked foreign companies, which shut down operations at factories across Thailand to buy time to get a grip on the crisis. The central bank now estimates that the floods, which have taken at least 315 lives and cost over a quarter of a million jobs, will wipe as much as 1.7 percentage points off the country's growth rate this year, as the inundation continues to disrupt supply chains across Asia and beyond.
Ms. Yingluck's government Tuesday approved a plan to widen the country's budget deficit for the fiscal year beginning Oct. 1 to 400 billion baht, or $12.9 billion, compared with an initial target of 350 billion baht in order revive Thailand's flagging economy and provide aid to the hundreds of thousands of people affected by the floods.
Bangkok Gov. Sukhumbhand Paribatra, who earlier said the city had escaped the worst of the deluge, held an emergency press conference Monday night to say it will be hit by a fresh inundation of water in the next two days. "Be alert, but please don't panic," he said, before pleading for donations of sandbags. Tuesday, soldiers and civilian volunteers rushed to reinforced flood defenses with sandbags around Bangkok's northern perimeter in a last-ditch effort to divert run-off from the floods.
In theory, Thailand's antiflood effort is led out of a single "war room" at Bangkok's old international airport, where deep political divisions between the populist government and conservative bureaucrats and army leaders—which in the past five years have led to a coup and massive political demonstrations, including one in Bangkok in which 90 people were killed—are carefully papered over.
In reality, analysts say, the 44-year-old Ms. Yingluck is struggling to keep a grip on the situation in the first big test of the two-month-old administration. They say that's largely because of a widespread perception that the government is controlled by former Premier Thaksin Shinawatra, her older brother, who lives in Dubai after being toppled in the coup five years ago.
"Ms. Yingluck, to her credit, has done her job well. She has been seen everywhere," said Pavin Chachavalpongpun of the Institute of Southeast Asian Studies in Singapore. "But the government also knew about the imminent floods two months ago and did little to prevent it. This is a leadership crisis."
Science Minister Plodprasop Suraswadi broke ranks on Thursday, rushing out of a top-level crisis meeting to tell people in northern Bangkok that they should leave their homes immediately to escape the flood. It was just the sort of stunt many Thais expect from Mr. Plodprasop, an excitable entrepreneur best known for putting exotic meats such as zebra and crocodile on the menu at a night safari in the northern city of Chiang Mai.
Bangkok's flood defenses were, in fact, intact. Mr. Plodprasop later apologized for his confusion—but not before many people abandoned their homes in a late-night rush and triggered a panic that rippled across much of the city.
"I'm sorry to say we fell for it. We took the dog and high-tailed it out of there," said one resident of a low-lying area, who asked not to be named out of embarrassment.
Shortly after, Mr. Sukhumbhand, the city governor, told anxious Bangkok residents to listen to him, and him alone.
Since then, the debate over how to handle Thailand's flood crisis has grown more and more tetchy. Former Premier Abhisit Vejjajiva, who faced a smaller flood crisis last year, is urging Ms. Yingluck to declare a state of emergency and postpone a series of populist cash handouts that were a key pledge of her successful election campaign earlier this year. A state of emergency, among other things, would increase the flood-relief authority of Thailand's military and allow it to intervene in disputes between villagers over where to divert the run-off from the flood.
Ms. Yingluck so far has refused, arguing the declaration might scare off foreign visitors just as Thailand prepares for its peak tourist season.
Other observers, for their part, question why irrigation officials didn't begin releasing meaningful amounts of excess water from the country's reservoirs until the impact of this year's unusually ferocious rain-storms was already well under way. In previous years, the country's water managers often began releasing water from dams and reservoirs as early as July.
In the meantime, the government continues to send mixed signals. As floodwater knocks out more industrial parks—a sixth was shut down Monday—businesses are wondering just how far the crisis will go.
One of Honda Motor Co.'s Thai plants is swamped and Toyota Motor Co. said Friday that it was extending a shutdown of its Thai operations until the end of this week at least, because suppliers of key components are still affected by the floods. Makers of semiconductors and hard drives have also been badly affected, with many businesses complaining that the government hasn't developed a long-term solution for Thailand's periodic flooding.
A Japanese trade group already has said that Japanese companies—including many of Thailand's biggest foreign investors—didn't know what was happening and what was accurate.
"They received warnings but not enough information and not enough to time to decide what steps to take," said Seiya Sukegawa, an economist at the Bangkok office of the Japan External Trade Organization.
