After weeks of tension on the Korean peninsula, including North Korean threats of nuclear war, the North has in recent days begun to at least talk about dialogue in response to calls for talks from both the United States and South Korea.

The North’s Rodong Sinmun newspaper rejected as unacceptable the U.S. and South Korean condition that it agree to dismantle its nuclear weapons and suspend missile launches before talks can begin.

“If the DPRK sits at a table with the U.S., it has to be a dialogue between nuclear weapons states, not one side forcing the other to dismantle nuclear weapons,” the newspaper said, referring to the North by its official name, the Democratic People’s Republic of Korea.

The United States swiftly rejected Pyongyang’s claim of nuclear status, while NATO foreign ministers condemned its pursuit of ballistic missile and nuclear weapons programs and called for “credible” talks to be held on denuclearization.

“North Korea’s demand to be recognized as a nuclear weapons state is neither realistic nor acceptable,” Thomas Countryman, U.S. Assistant Secretary for International Security and Non-Proliferation, told Reuters in Geneva.

Countryman, who is heading the U.S. delegation to two-week talks on the nuclear Non-Proliferation Treaty (NPT), told reporters on Monday: “It is important that the world respond calmly but deliberately without changing our emphasis that the goal of the world to which North Korea is committed is a denuclearized Korean peninsula.

“And the more states that make that clear, the greater the chance we have of arriving at exactly that goal,” he said.

A White House spokesman said this month North Korea would need to show it was serious about abandoning its nuclear ambitions for talks to be meaningful.

In Brussels, NATO foreign ministers issued a statement saying that North Korea’s “provocative actions” violated U.N. Security Council resolutions, undermined regional stability and jeopardized prospects for lasting peace.

“We urge the DPRK to refrain from further provocative acts,” the NATO ministers said, calling for North Korea to comply with Security Council resolutions and return to the NPT from which the reclusive country announced its withdrawal in 2003.

Pyongyang should abandon all nuclear weapons and nuclear and ballistic missile programs in a “complete, verifiable and irreversible manner” and engage in credible talks on denuclearization, they said.

North Korea signed a denuclearization-for-aid deal in 2005 but later backed out of that pact. It now says its nuclear arms are a “treasured sword” that it will never give up.

It conducted its third nuclear test in February.

That triggered new U.N. sanctions which in turn led to a dramatic intensification of North Korea’s threats of nuclear strikes against South Korea and the United States.

But in a sign the hostility was easing, North Korea last Thursday offered the United States and South Korea a list of conditions for talks, including the lifting of U.N. sanctions.

The United States responded by saying it awaited “clear signals” that North Korea would halt its nuclear weapons activities.

North Korea has a long record of making threats to secure concessions from the United States and South Korea, only to repeat the process later. Both the United States and the South have said in recent days that the cycle must cease.

The Comprehensive Nuclear-Test-Ban Treaty Organization said in Vienna on Tuesday that it had unexpectedly detected radioactive gases that could have come from North Korea’s nuclear weapons test in February, possibly providing the first “smoking gun” evidence of the explosion.

(Additional reporting by Adrian Croft in Brussels; Editing by Nick Macfie)

On Monday, the North dropped its shrill threats of war against the United States and South Korea as it celebrated the 101st anniversary of the birth of its first leader, Kim Il-Sung, raising hopes for an easing of tension in a region that has for weeks seemed on the verge of conflict.

The hint of a scaling back of the confrontation followed offers of talks with the isolated North from both the United States and the South.

But the North’s KCNA news agency said on Tuesday the North Korean army had issued an ultimatum to the South after rallies in the South on Monday at which portraits of North Korea’s leaders were burned.

“Our retaliatory action will start without any notice from now,” KCNA reported, citing military leaders of the Democratic People’s Republic of Korea (DPRK), as North Korea is officially known.

“The military demonstration of the DPRK’s revolutionary armed forces will be powerful sledge-hammer blows at all hostile forces hurting the dignity of the supreme leadership.”

South Korean media reported several small demonstrations in the capital, Seoul, on Monday. One television station showed pictures of a handful of protesters burning a portrait of North Korean leader Kim Jong-un.

Small counter-protests, by South Koreans calling for dialogue with the North, were also held, media reported.

The North has threatened nuclear attacks on the United States, South Korea and Japan after new U.N. sanctions were imposed in response to its latest nuclear arms test in February.

The North has also been angry about annual military exercises between U.S. and South Korean forces, describing them as a “hostile” act. The United States dispatched B52 and B2 stealth bombers from their bases to take part.

OFFER OF TALKS

But on Tuesday, the North’s KCNA did not threaten the United States, reserving its anger for what it calls South Korea’s “puppet” government.

It even mentioned the possibility of dialogue, suggesting that it was not really about to launch war in response to routine protests by at most a few dozen people in Seoul, despite the anger they raised.

“If the puppet authorities truly want dialogue and negotiations, they should apologize for all anti-DPRK hostile acts, big and small, and show the compatriots their will to stop all these acts,” KCNA cited the North’s military as saying.

A South Korean Foreign Ministry spokesman later told a briefing the North Korean ultimatum was not worth a response and South Korea was waiting for the North to make a “wise decision”.

Last week, the South’s President Park Geun-hye offered talks but the North rejected the overture as a “cunning” ploy.

Park will meet U.S. President Barack Obama at the White House on May 7 to discuss economic and security issues, including “countering the North Korean threat”, the White House said on Monday.

The United States has offered talks with the North, but on the pre-condition that it abandons its nuclear weapons ambitions. North Korea deems its nuclear arms a “treasured sword” and has vowed never to give them up.

Nevertheless, U.S. Secretary of State John Kerry, ending a trip to the region dominated by concern about North Korea, on Monday stressed his interest in a diplomatic solution.

A day earlier Kerry had appeared to open the door to talking without requiring the North to take denuclearization steps in advance. Beijing, he said, could be an intermediary.

North Korea has conducted three nuclear tests but it was not believed to be near weapons capability.

Missile launches and nuclear tests by North Korea are both banned under U.N. Security Council resolutions that were expanded after the North’s February test.

The aim of the North’s aggression, analysts say, is to bolster the leadership of Kim Jong-un, the 30-year-old grandson Kim Il-Sung, or to force the United States into talks.

The United States has 28,000 troops in South Korea.

A U.S. military helicopter crashed in a region near the border with North Korea on Tuesday with 14 people on board, all of them U.S. soldiers, South Korea’s Yonhap news agency said.

There were no reports of injuries and the cause of the accident, which happened when the helicopter was landing, was being investigated, Yonhap said.

(Additional reporting by Se Young Lee and Christine Kim; Editing by Paul Tait)

Amphetamine-type stimulants (ATS), including amphetamine and methamphetamine, have become the drugs of choice in many parts of Southeast and East Asia since the 1990s, replacing plant-based drugs such as heroin, opium and cannabis, the U.N. drugs office said.

The stimulants can be easily made anywhere from a variety of materials and precursor chemicals and bring huge profits for little investment, the U.N. Office on Drugs and Crime said.

Increasing use of the drugs was reported from most countries in the region in 2010, the office said, while the illicit making of the drugs was thriving despite the seizure of 442 manufacturing facilities and nearly 136 million “speed” pills.

African crime gangs which used to deal in cocaine and heroin

had diversified into ATS trafficking while gangs from Iran had been identified as a significant drug-trafficking threat in the region, it said.

“African groups are involved in trafficking crystalline methamphetamine, ecstasy and heroin into Indonesia, and have used Cambodia as a centre for financial tansactions and for the distribution of illicit drugs to Indonesia,” the U.N. office said in a report.

“In Japan, the proportion of seized methamphetamine that was trafficked into the country from Africa increased 7.4 percent in 2009 to 36 percent in the first half of 2010.”

In Malaysia, the number of African couriers arrested almost doubled in 2010 to 65, including 50 Nigerians, it said.

“To avoid detection, African drug trafficking organisations have diversified their methods by using couriers from countries in the Middle East, Eastern Europe and Asia and by diversifying their trafficking routes.”

Iranian gangs were also getting involved.

SPEED KILLS

Malaysian authorities arrested 228 Iranian couriers in 2009-10 for smuggling methamphetamine while Japan reported the arrests of 135 of them in the same period.

Other countries reporting the arrest of Iranians included Thailand, where authorities nabbed 75 in 2010 compared with 12 in 2009, and Indonesia with 27 arrests in 2010.

“There are also indications that Iranian drug organisations have attempted to establish illicit ATS manufacturing operations in Malaysia and Thailand,” the office said.

Seizures of methamphetamine pills shot up for the second year in 2010 to nearly 136 million from 94 million, the previous year, a 44 percent increase. China, with 58.4 million pills seized, Thailand and Laos accounted for 98 percent of the busts.

“The staggering increase in seizures reflects burgeoning production,” the office said.

But Myanmar, where most pills are manufactured, by former rebels who struck ceasefires with the government, reported the seizure of only 2.2 million pills in 2010, or just less than a tenth of the 23.9 million seized the previous year.

“This may reflect that traffickers are deliberately avoiding trafficking methamphetamine directly to Thailand along the overland route and instead smuggling larger amounts out of the country through Laos and along the Mekong river into Thailand,” it said.

In what could be a grisly illustration of that shift, 13 Chinese sailors were murdered on the Mekong river, near the Thai-Myanmar border in October. Thai officials have suggested methamphetamine smuggling was behind the killings.

Laos saw a 10-fold increase in methamphetamine pill seizures in 2010 and was vulnerable to the drug gangs.

“Its remote and sparsely populated mountainous borderlands make it vulnerable to displacement of manufacturing facilities from Myanmar.”

(Editing by Sanjeev Miglani)

Amphetamine-type stimulants (ATS), including amphetamine and methamphetamine, have become the drugs of choice in many parts of Southeast and East Asia since the 1990s, replacing plant-based drugs such as heroin, opium and cannabis, the U.N. drugs office said.

The stimulants can be easily made anywhere from a variety of materials and precursor chemicals and bring huge profits for little investment, the U.N. Office on Drugs and Crime said.

Increasing use of the drugs was reported from most countries in the region in 2010, the office said, while the illicit making of the drugs was thriving despite the seizure of 442 manufacturing facilities and nearly 136 million “speed” pills.

African crime gangs which used to deal in cocaine and heroin

had diversified into ATS trafficking while gangs from Iran had been identified as a significant drug-trafficking threat in the region, it said.

“African groups are involved in trafficking crystalline methamphetamine, ecstasy and heroin into Indonesia, and have used Cambodia as a center for financial transactions and for the distribution of illicit drugs to Indonesia,” the U.N. office said in a report.

“In Japan, the proportion of seized methamphetamine that was trafficked into the country from Africa increased 7.4 percent in 2009 to 36 percent in the first half of 2010.”

In Malaysia, the number of African couriers arrested almost doubled in 2010 to 65, including 50 Nigerians, it said.

“To avoid detection, African drug trafficking organizations have diversified their methods by using couriers from countries in the Middle East, Eastern Europe and Asia and by diversifying their trafficking routes.”

Iranian gangs were also getting involved.

SPEED KILLS

Malaysian authorities arrested 228 Iranian couriers in 2009-10 for smuggling methamphetamine while Japan reported the arrests of 135 of them in the same period.

Other countries reporting the arrest of Iranians included Thailand, where authorities nabbed 75 in 2010 compared with 12 in 2009, and Indonesia with 27 arrests in 2010.

“There are also indications that Iranian drug organizations have attempted to establish illicit ATS manufacturing operations in Malaysia and Thailand,” the office said.

Seizures of methamphetamine pills shot up for the second year in 2010 to nearly 136 million from 94 million, the previous year, a 44 percent increase. China, with 58.4 million pills seized, Thailand and Laos accounted for 98 percent of the busts.

“The staggering increase in seizures reflects burgeoning production,” the office said.

But Myanmar, where most pills are manufactured, by former rebels who struck ceasefires with the government, reported the seizure of only 2.2 million pills in 2010, or just less than a tenth of the 23.9 million seized the previous year.

“This may reflect that traffickers are deliberately avoiding trafficking methamphetamine directly to Thailand along the overland route and instead smuggling larger amounts out of the country through Laos and along the Mekong river into Thailand,” it said.

In what could be a grisly illustration of that shift, 13 Chinese sailors were murdered on the Mekong river, near the Thai-Myanmar border in October. Thai officials have suggested methamphetamine smuggling was behind the killings.

Laos saw a 10-fold increase in methamphetamine pill seizures in 2010 and was vulnerable to the drug gangs.

“Its remote and sparsely populated mountainous borderlands make it vulnerable to displacement of manufacturing facilities from Myanmar.”

(Editing by Sanjeev Miglani)

The abuses could amount to war crimes and Hillary Clinton should bring up the issue in talks this week when she becomes the first U.S. secretary of state to visit Myanmar in five decades, the group Partners Relief and Development said.

Representatives of the aid group visited Kachin state in the far north of Myanmar, also known as Burma, where in June fighting broke out when a 17-year-old ceasefire with the Kachin Independence Organization (KIO) guerrilla group broke down.

“While the political situation in lowland Burma is being interpreted as a major breakthrough, the situation for millions in the ethnic areas is worse than it’s been in two decades,” the group’s co-founder, Oddny Gumaer, told a news conference in Bangkok.

“I would want Hillary Clinton to bring this up.”

Ethnic minority guerrillas have been fighting for self-rule in Myanmar since shortly after independence from Britain in 1948. For decades, the military justified its tight grip on power by citing the fear the country might break apart.

The military officially stepped back from its leadership role after an election a year ago. A civilian government which took over in March, though dominated by retired military men, has introduced a string of reforms.

Clinton’s three-day visit beginning Wednesday marks international recognition of the changes by a long-isolated country keen to reduce reliance on China and end Western sanctions imposed because of rights abuses and suppression of democracy.

But a member of the aid group who made an unofficial fact-finding visit to Kachin state last month said there was no sign of reform in the conflict zone, where about 30,000 people have been displaced by the fighting.

“The situation is dire and they are in need of immediate assistance,” group member Bryan Erikson told the news conference, referring to civilians in the area.

“There’s very little sign of improvement and the expectation of future hostility is high,” said Erikson, the author of a report on the situation in the area drawn from interviews with at least 200 people affected by the conflict.

MINORITY RIGHTS

Hkawng Seng Pan of the Thailand-based Kachin Women’s Association said her group had evidence of 32 cases of rape by government soldiers in the recent conflict and some of the victims had been killed.

“When we say ‘reform in Burma’, or ‘reconciliation in Burma’, we cannot separate democracy from ethnic rights,” she said.

The Myanmar army dismisses accusations of rape and other human rights abuses by its soldiers.

The civilian government, led by President Thein Sein, says it wants to end the country’s minority conflicts and has reached out to guerrilla factions, including the KIO.

A KIO representative, James Lum Dau, said more talks were due Tuesday in a Chinese border town. He said the Myanmar army should pull out of the Kachin areas they had moved into since the ceasefire broke down in June.

“Then automatically there will be a ceasefire then we can talk about politics,” Lum Dau told Reuters.

About a third of Myanmar’s estimated 50 million people are members of ethnic minorities, such as the Kachin, who have traditionally inhabited the hills above the central Irrawaddy river basin.

Many Kachin converted to Christianity during colonial rule and Kachin fighters helped British and U.S. forces fighting the Japanese army during the Second World War.

The Kachin guerrilla force went to war against the central government demanding autonomy soon after the military seized power in an 1962 coup. The ceasefire broke down this year after the army ordered the KIO, and other minority forces, to fold their men into a government border security force.

(Editing by Martin Petty and Sanjeev Miglani)

City dwellers and farmers displaced since the floods began
in July, killing 427 people, and foreign investors waiting to
pump out factories could face the same thing when the rainy
season rolls around again in the middle of next year.

But there are short-term steps to reduce the risk, including
better cooperation between agencies with over-lapping
responsibilities and an improvement in the management of dams
that feed water down into the central flood plain.

At times since the crisis began unfolding, rivalry between
different arms of government exacerbated by divided political
loyalties has appeared to derail efforts to stop the deadliest
flooding in half a century.

“A main weakness in the system is coordination and that can
be improved if people set aside their egos. It has to be
non-partisan,” said Chaiyuth Sukhsri, head of faculty at the
Water Resources Engineering Department at Chulalongkorn
University.

“In the short term, we can eliminate a third of the problem
but the rest is long term. Improving the infrastructure will
take years.”

The floods have knocked back Thailand’s expected growth this
year by a couple of percentage points and wiped out a quarter of
the main rice crop in the world’s biggest rice exporter, putting
pressure on global prices.

The disaster has also forced up global prices of computer
hard drives and disrupted global auto production after the
flooding of industrial estates in the central provinces of
Ayutthaya and Pathum Thani, north of Bangkok.

A 400 billion baht ($13 billion) budget deficit has been
targeted for this fiscal year from Oct. 1, up from 350 billion
baht previously, to help with the recovery.

Looking beyond this disaster and the still unknown cost of
destruction, foreign investors would like to see more
streamlined crisis management, said Nandor von der Luehe,
chairman of the Joint Foreign Chambers of Commerce.

“Maybe the government should look at one agency. There were
too many people responsible for different areas, like too many
cooks in the kitchen,” he said.

“That would be a big step.”

“EVERYTHING BUILT ON FLOOD PLAIN”

The role that dams played in the disaster is being debated
but some experts say authorities in charge of the dams scattered
over uplands in the north were too slow to release water.

When they had to, to stop dams bursting, unusually heavy
monsoon rain was falling and the rivers were full.

“Bangkok has grown so much and everything is built on the
flood plain. In the short term, not much can be done besides
good management,” said development economist Sawai Boonma, who
has been studying Thailand’s flood problem for decades.

“They have try to release the water gradually as it builds
up in the dams. This time they waited until the dams were
over-capacity. That’s why the volume of water was so huge.”

The priority of the authorities managing dams is irrigation
and they were perhaps understandably reluctant to let a lot of
water out early after a drought last year, said Chaiyuth.

In the longer term, Sawai said flood spill-ways, one
kilometre (half a mile) wide should be created both to the east
and west of Bangkok, with even a smaller one through the city.

People should also think about getting out of the flood
plain, where the annual deluge brings such bounty in the fields,
said Sawai. He envisages satellite towns built on higher ground
linked to Bangkok by high-speed train.

A newer industrial zone southeast of Bangkok, which has no
major river basin, has escaped the flooding.

“Not only have they put the industrial estates in the danger
area, they’ve built over the best rice fields. It’s lose-lose,”
Sawai said.

A newer industrial zone southeast of Bangkok, which has no
major river basin, has escaped the flooding.

Climate change with its expected rise in sea levels and more
storms only make a re-think more critical, he says.

Von der Luehe said Thailand was still good for business,
despite the floods and the danger of more, because of factors
such as location and infrastructure.

“Obviously, investors should consider locations. Not
everything has been flooded,” he said. “Overall, when we look at
the neighbouring countries, Thailand is still a strong
destination. We are in a good position here.”

(Additional reporting by Ploy Ten Kate; Editing by Nick Macfie)

The floods began in July, at the beginning of a particularly heavy rainy season, and months later the water is still rising and anger is boiling over.

Almost 400 people have been killed, economic growth has been hit and investor confidence shaken as the water swamped industrial estates in the central Chao Phraya river basin, disrupting global supply lines for auto and computer parts.

Inner Bangkok, protected by a network of dikes and sandbag walls, survived peak tides on the weekend and remains mostly dry.

But huge amounts of water are bottled up to the north, west and east of the city, and new areas are being flooded daily as the water tries to find its way out to sea to the south.

Anger is seething in flooded communities on the wrong side of inner Bangkok’s flood barricades.

Residents of the northeastern Bangkok suburb of Sam Wa took matters into their own hands this week and hacked away at the side of a canal flood gate, aiming to let the water flow out of their area toward the city center.

The central government, led by Prime Minister Yingluck Shinawatra, sister of the former populist premier Thaksin Shinawatra, ordered the gate opened in the face of the residents’ demands.

The Bangkok city government, from the other side of Thailand’s political divide, objected on the grounds that the flow could endanger the city center.

But it had to comply with Yingluck’s order to open the gate by a meter (three feet) leading to dire warnings from the city and fear among inner city people that the disaster they thought they had dodged was again looming.

On Wednesday, city officials and workers went to the Sam Wa flood gate to repair the damage and limit the amount of water flowing through.

“We are here doing the repair work and the police are protecting us,” said city administration spokesman Jate Sopitpongstorn.

“They have to accept it,” he said of the neighborhood’s residents, adding there was no sign of protests.

“COMPLICATED SYSTEM”

The city says the nearby Bang Chan industrial estate has been put in danger by the flow through the gate and Jate said it was not yet known if it would be safe.

Water is also approaching the city center from the northern Don Muang district, where the city’s domestic airport has already been flooded and where one resident said the water had risen 5 cm (two inches) in his house on Wednesday.

City deputy governor Theerachon Manomaipaiboon said workers were building a wall of giant sandbags to try to stop the flow toward the city center from the north.

But the flood was difficult to predict as it made its way through an ancient and often partly built over network of canals and tunnels.

“We are using the big bags to block the water but we have a very complicated system. Water in one area can appear 20 km (12 miles) away,” Theerachon told Reuters.

Bangkok’s 12 million people account for 41 percent of Thailand’s gross domestic product and neither the central government nor the city administration wants to be seen responsible for an inner city deluge.

Both sides will claim victory if the center can be saved.

But misery in outlying areas, especially north and west Bangkok, and provinces to the north will take the gloss off any victory in the inner city, especially given a perception those areas have been sacrificed to save the well-to-do city-center.

To the north of Bangkok, Pathum Thani and Ayutthaya provinces have been largely inundated for weeks, along with seven industrial estates that have sprung up over the last two decades on what used to be the central plain’s rice fields.

Thailand is the second-largest exporter of computer hard drives and global prices are rising because of a flood-related shortage of major components used in personal computers.

Thailand is also Southeast Asia’s main auto-parts maker and Japan’s Honda Motor Co said car production could be difficult in the second half of its business year ending in March. Its Ayutthaya plant has suspended work indefinitely.

“The ‘Motown’ of Asia has become ‘Waterworld’ overnight,” the Nation newspaper said in an editorial, referring to Thailand’s position in the motor industry.

(Editing by Sanjeev Miglani)

The floods began in July and have devastated large parts of the central Chao Phraya river basin, killed nearly 400 people and disrupted the lives of more than 2 million.

Inner Bangkok, protected by a network of dikes and sandbag walls, survived peak tides on the weekend and remains mostly dry.

But large volumes of water are sliding across the land to the north, east and west of the city, diverted by the city centre’s defenses into new suburbs as it recedes in others.

In one northeastern city neighborhood angry residents have been demanding the opening of a sluice gate to let water out of their flooded community.

Residents jostled with police on Monday and Prime Minister Yingluck Shinawatra ordered that the gate be opened by one meter (three feet).

But city authorities have warned that the flow through the sluice gate could move via a canal into large parts of the city which are now dry, including an industrial estate.

“We are opposed to it but the government has ordered the BMA to open the gate, so more water will come,” said Bangkok Metropolitan Authority (BMA) spokesman Jate Sopitpongstorn.

“It could reach the Bang Chan industrial estate. We have to see the consequences,” he told Reuters.

Yingluck’s government and the Bangkok authority represent opposing factions in Thailand’s strife-plagued politics.

The disaster has been the first big test for the government of Yingluck, a political novice who took over this year after an election that many Thais hoped would heal deep divisions.

Saving Bangkok from a ruinous flood would be an important victory. The city’s 12 million people account for 41 percent of Thailand’s gross domestic product.

MISERY

But prolonged misery in outlying areas and heavily flooded provinces to the north would take the gloss off that victory, especially given a perception that those areas have been sacrificed to save the center of the capital.

To the north of Bangkok, Pathum Thani and Ayutthaya provinces have been largely inundated for weeks, along with seven industrial estates that have sprung up over the last two decades on what used to be the central plain’s rice fields.

Yingluck, holding a cabinet meeting on Tuesday to work out a recovery plan, said the previous day it should take three months to rehabilitate the estates.

Thailand is the second-largest exporter of computer hard drives and global prices are rising because of a flood-related shortage of major components used in personal computers.

Thailand is also Southeast Asia’s main auto-parts maker and Japan’s Honda Motor Co said car production could be difficult in the second half of its business year ending in March. Its Ayutthaya plant has suspended work indefinitely.

Yingluck said she had assured Japanese investors of steps to prevent a repeat of disaster from the annual rainy season.

The cabinet is discussing a recovery plan that Energy Minister Pichai Naripthaphan said would cost up to 900 billion baht ($30 billion), including 800 billion baht for an overhaul of the water-management system and 100 billion for the rehabilitation of industrial estates.

The Bank of Thailand has nearly halved its projection of economic growth this year to 2.6 percent from July’s 4.1 percent estimate, and said the economy — Southeast Asia’s second largest — would shrink by 1.9 percent in the December quarter from the previous three months due to the floods.

The floods submerged four million acres (1.6 million ha), an area roughly the size of Kuwait, and destroyed 25 percent of the main rice crop in the world’s largest rice exporter.

The deluge was caused in part by unusually heavy monsoon rain falling on a low-lying region, but the weather has been largely clear for a week as the cooler dry season begins.

(Editing by Sugita Katyal)

Nearly 400 people have been killed in months of floods, the lives of more than two million disrupted, economic growth has been set back and global supply chains for Thai-made computer and auto parts thrown into disarray.

But central Bangkok, protected by a network of dikes and sandbag walls, appeared to have escaped the deluge with peak tides on the Chao Phraya river due to pass on Monday and clear weather setting in.

Bangkok’s 12 million people account for 41 percent of Thailand’s gross domestic product so its flooding would severely compound the disaster.

But while the city center remained dry with business mostly as usual, many neighborhoods on the wrong side of the protective ring, especially to the north and west of the center, have been swamped by deep, fetid flows.

Provinces just north of Bangkok, in particular Pathun Thani and Ayutthaya, have been largely inundated for weeks.

Seven industrial estates that have sprung up over the last decade or two on what used to be the central plain’s rice fields have been overcome by water flowing down the Chao Phraya basin.

Prime Minister Yingluck Shinawatra, a political novice who took over this year after an election that many Thais hoped would heal deep divisions, said it should take three months to rehabilitate the industrial estates.

“We expect after the water recedes the industrial estates will recover within three months if we can release the water and recover the machinery quickly,” Yingluck told reporters.

Thailand is the second-largest exporter of computer hard drives and global prices are rising because of a flood-related shortage of major components used in personal computers.

DANGER, DISEASE

The president of South Korea’s Samsung Electronics said on the weekend he expected Thailand’s floods to hit the computer memory chip market further by hurting PC production until the first quarter of next year.

Japan’s Honda Motor Co may keep its Thai factory shut for about six months which would hit 3 percent of its annual global car output, the Nikkei business daily reported on Sunday.

The government expects the recovery will cost 900 billion baht ($30 billion), including 100 billion baht for the rehabilitation of industrial estates and 800 billion for an over-haul of the water-management system, the Nation newspaper reported.

The Bank of Thailand has nearly halved its projection of economic growth this year to 2.6 percent from July’s 4.1 percent estimate, and said the economy — Southeast Asia’s second largest — would shrink by 1.9 percent in the December quarter from the previous three months due to the floods.

The floods have submerged four million acres (1.6 million hectares), or roughly the size of Kuwait, and follow unusually heavy monsoon rain.

But the danger is far from over with the run-off still flowing down from the north and swamping new neighborhoods as fears of disease grows.

People living in Thonburi, on the west bank of the Chao Phraya, have been struggling in waist-deep water for days, as have those in suburbs and provinces to the north of Bangkok.

As anger in some communities grows, Yingluck assured flood victims in a Facebook message that they would be taken care of.

As well as a growing risk of diarrhea and mosquito-borne diseases, skin infections area a major problem, aid officials say.

In some areas, crocodiles have escaped from flooded farms and snakes searching for dry land have slithered into homes.

(Editing by Nick Macfie)

The floods have killed at least 381 people since July and affected more than 2 million. Authorities have slashed growth forecasts for Southeast Asia’s second biggest economy and disruptions to auto and computer-part producers have been felt worldwide.

Water flowing down the central Chao Phraya river basin from the north is meeting peak tides surging in the Gulf of Thailand, 20 km (12 miles) south of Bangkok, leading to fears the city’s makeshift defenses would be swamped.

The tides have pushed water in the river, which snakes its way through the city past gilded temples and wooden shanties, about 2.5 meters (8 feet) above sea level but dikes and sand-bag walls have largely held.

Prime Minister Yingluck Shinawatra, a political novice who took over this year after an election that many Thais hoped would heal chronic political divisions, delivered the first good news in days on Saturday when she said the water bearing down from the north was beginning to recede.

But the danger is far from over and Bangkok’s governor issued a new warning on Sunday for people living near the river and by canals to get belongings up high and prepare to get out.

“We will monitor the situation closely and let you know again if we want you to evacuate,” Governor Sukhumbhand Paribhatra told reporters.

But it’s too late for most people living in Thonburi, on the west bank of the Chao Phraya, struggling in waist-deep water to save their possessions.

Large areas of provinces to the north of Bangkok, such as Pathun Thani and Ayutthaya, have been inundated for weeks and fears about water-borne diseases and malaria are growing.

Matthew Cochrane of the International Federation of the Red Cross said the situation was critical.

“There are more than 2 million people who have been affected over the past few months. Many of them are still affected, still flooded outside the city, across the center and the north,” Cochrane told Reuters.

“You only have to drive over the Chao Phraya River and you will see people living in waist-high water with no access to drinking water, no access to food, entirely isolated from any other social services,” he said.

RICE, COMPUTERS

Thailand’s worst floods in half a century have also wiped out a quarter of the main rice crop in the world’s biggest rice exporter.

The waters also inundated seven industrial estates that have sprung up over the past couple of decades on what used to be rice-growing land to the north of the capital.

Thailand is the second-largest exporter of computer hard drives and global prices are rising because of a flood-related shortage of major components used in personal computers.

The president of South Korea’s Samsung Electronics said he expected Thailand’s floods to hit the computer memory chip market further by hurting PC production until the first quarter of next year.

Samsung is the world’s top maker of dynamic random access memory (DRAM), which is used widely in PCs.

“There is too much uncertainty in the market … A disruption in PC production will have a direct impact on DRAM demand. Maybe (the DRAM market) will get worse,” Jun Dong-soo, president of Samsung’s memory business, told reporters in comments released on Sunday.

Sunday morning’s high tide flooded parts of Bangkok’s normally bustling Chinatown, and some streets around the glittering Grand Palace.

Buildings across Bangkok have been sand-bagged or walled off for protection. Many people have left their cars on elevated roads, although most of the inner city is dry.

Many others have taken advantage of a special five-day holiday to flee the city. Those left behind have stocked up on water, food, life jackets and even boats.

(Additional reporting by Jason Szep; Editing by Paul Tait)