Thailand is an example of what happens when a society becomes divided to the point of paralysis and neither faction is willing to abide by the term of the other faction. W. Scott Thompson at the IHT argues that Thailand has always been vulnerable to a logjam but always had a monarch to clear it. Now the monarch can’t clear it and everyone is waiting to see what happens next.
We have not been following Thailand much lately. But they are in the process of falling apart.
Speaking of nations that are falling apart, Ukraine is going from bad to worse. As everyone knows, Ukraine is deeply divided between the pro EU western half of the country and the pro Russian eastern half of the country. Now a country that was almost ungovernable in the best of times is facing an economic crisis that would shake the foundations of well governed nation. This from the Economist….
Ukraine’s currency is plummeting in response to the country’s declining economic prospects and financing difficulties. With the IMF now having a major say in policy decisions, non-market solutions are improbable; instead, the aim is to achieve an orderly depreciation rather than a rout. Ultimately, a weaker exchange rate will be beneficial to the economy. Yet the adjustment will be painful, and this may fuel political impulses that run counter to IMF strictures.
And of course, there is always Pakistan.
As I have argued previously, you are going to see lot more of this as the economic crisis deepens.
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