The government of Prime Minister Yingluck Shinawatra has declared public holidays from today until October 31 in Bangkok and 20 provinces as flood waters engulf entire areas of the Thai capital and test the last flood defences protecting its inner districts.[ Late report today that there is no way to avoid flooding the inner districts, CNN showed the flooded streets around the royal palace ]
The government’s efforts to drain the flood waters around the city through its western and eastern outskirts have failed. On Tuesday, Bangkok’s deputy governor Pornthep Techapaiboon estimated that some 4,000 million cubic metres of water was cascading toward the city from the area around Ayutthaya, 80 kilometres to the north. “The problem is City Hall can drain no more than 400 million cubic metres of water a day,” he admitted.
The public holidays are meant to enable some of the city’s 12 million residents to evacuate and allow others to prepare last-ditch sandbag defences of their properties. Bus stations were crowded yesterday with people trying to leave. Food and bottled water were in short supply. Rationing has been introduced by some supermarkets.
Bangkok’s main domestic airport at Don Muang, which has been operating as an evacuation centre and flood relief headquarters, was closed on Tuesday as water lapped at its two runways.
The evacuees at the airport, like those in other centres, are being forced to move for a second time as the situation deteriorates. In the flooded areas, there are now 113,000 people in shelters and 720,000 seeking medical assistance. There have been 373 fatalities since the heavy monsoon rains began in July.
Early today, high tides were approaching in the Gulf of Thailand that will force water up the city’s river system. The director of Rangsit University’s Centre on Climate Change and Disaster, Seri Supharatid, said the city now was dependent on river dykes holding. He warned: “In the worst case scenario, if all the dykes break, all parts of Bangkok would be more or less flooded.” [ The worst case scenario has now become reality ]
On Tuesday, Bangkok governor Sukhumbhand Paribatra appeared on television to advise all residents along the Chao Phraya River, which sprawls through the capital, to be on “full alert.” The river had already reached a record water level of 2.3 metres on Monday and he warned that at the present rate it would reach 2.6 metres by the weekend. The average flood embankment is 2.5 metres high.......
Three northern districts of the capital have been under water since last Saturday. Water is already moving through the Sathorn and Silom areas, where major hotels and foreign embassies are located. On Wednesday, the notorious Bang Kwang Central Prison was shut down and prisoners evacuated.
Yingluck has conceded that there is a 50 percent chance that inner Bangkok will be severely inundated.[ It's now 100 percent, i.e. a certainty ] She said flooded areas could remain under water for at least one month. The Education Ministry has delayed the beginning of the new school semester until November 15 in Bangkok and 11 other provinces, affecting hundreds of thousands of children.
Seven major industrial zones have been closed down and the labour ministry has estimated that 650,000 workers were laid off....
The Finance Ministry warned on Monday that a loss of confidence in the country’s stability as a manufacturing centre could be permanent unless long-term problems were addressed. It has a 420 billion-baht plan to defend strategic areas from flooding, while other regions—undoubtedly the residential suburbs of the urban poor—would essentially be abandoned to their fate......
An article in the Wall Street Journal noted that companies that have poured billions of dollars into Thailand to exploit its cheap labour and relatively good infrastructure are now re-thinking their strategies. “Thailand’s worsening disaster is reviving a debate over whether some companies are pushing lean supply chains too far for short-term efficiency at the cost of long term security,” the article stated.

The flooding, which has engulfed much of Thailand over the past three months, is now threatening to cut off the capital Bangkok from the rest of the country. The ongoing floods have impacted heavily on the Thai economy and are also taking their toll on the newly installed government of Prime Minister Yingluck Shinawatra.
The death toll from the flooding is over 550. At least two million people have been directly affected in 26 provinces and Bangkok. By the middle of the week, more than 800,000 Bangkok residents were living in 470 locations that were under more than 80cm of water [about 2.5 feet], according to Bangkok Metropolitan Administration (BMA) head Sukhumbhand Paribatra.
Yesterday Science and Industry Minister Plodprasop Suraswadi warned that the Rama 2 Road, the main highway to the south, would be among the areas about to be inundated. This would effectively mean that the city was surrounded by flood waters.
The Yingluck government and the BMA have focussed this week on saving the city’s commercial centre and two industrial estates, Bang Chan and Lat Krabang. Seven major industrial estates in Ayutthaya, to the north of Bangkok, have already been inundated, affecting 9,859 factories and 660,000 jobs.
Despite the BMA’s efforts, flooding has already affected the Ratchaprasong intersection at the heart of the capital’s commercial district. Retails sales for the 1,200 businesses have dropped 80 percent. Protests have erupted in several areas that have been flooded to protect industrial and commercial assets.
The Yingluck government, which was only installed in August after winning national elections in July, has already come under heavy criticism. An article in the Wall Street Journal on Thursday was entitled “Thai crisis is Yingluck’s decisive moment.” As well as inundating homes and industrial estates, it declared, the floodwaters “also threaten to consume the country’s brand new prime minister.”.......
The economic cost of the floods is still being tallied. Late last month, the Bank of Thailand (BOT) revised its estimate for economic growth for 2011 downward to 2.6 percent, from 4.1 percent the month before. Kasikorn Research predicts an even lower figure of 1.7 percent for this year. In 2010, the economy grew by over 8 percent.
The Thai government is already under considerable pressure from foreign corporations and investors to put a recovery plan in place. The closure of industrial estates and factories in Thailand has seriously impacted on the global supply chains in the auto and electronics industries.
Fifty percent of hard disk drives used by the world’s computer companies are produced in Thailand, with the figure for Western Digital being 60 percent. Already the cost of drives has increased by 50 percent and industry experts predict the price will be at least 25 percent above the pre-Thai flood levels for some time. The estimated cost of repairing or replacing flood-damaged capital equipment is $US1 billion.
Thailand is also the world’s fifth largest production centre for cars and light trucks as well as being a major manufacturer of auto components. The worst hit corporations are Japanese which have increasingly shifted production to Thailand over the past three decades. Toyota announced on November 7 that it had cancelled its previous profit forecast until the impact of the Thai floods could be assessed. The company also cancelled plans for overtime in its North American plants due to the lack of parts. Honda’s main facilities in Thailand are submerged, disrupting its global operations.
The floods in Thailand have renewed the discussion that emerged in the financial press following the Japanese earthquake and tsunami in March about the vulnerability of global supply chains. McKinsey & Co analyst Yogesh Malik told the Wall Street Journal that many companies have never considered the “big picture” in their tenuous supply chains “and this is especially true as these supply chains become more geographically dispersed.”