Respected scholar Associate Professor Dr. Aat Pisanwanich expressed his opinion that achieving an ambitious “golden number” will undoubtedly present certain difficulties, yet the target is not unattainable. Swift economic structural modifications initiated by the government could pave the way to this ambitious milestone.
Barely a month into his tenure, Thailand’s Prime Minister Srettha Thavisin’s government has been proactive, rolling out several stimulating economic initiatives. However, Dr. Aat voices concern over the escalating public debt resulting from the focus on populist policies. If the growth rate does not eclipse the amount being borrowed, it may plunge the country into a deep economic abyss, he cautioned.
Zooming in on the “Golden Number”
He drew attention to the digital wallet policy by the Pheu Thai-led government. While this may induce a short-term economic fillip, Dr. Aat opined that it hardly provides a strong foundation for long-term sustainability. Moreover, it could topple the dominos towards augmenting the public debt that can only be counteracted with a 4% economic growth.
Dr. Aat iterated, “Instead of investing too much in populist policies, Thailand should build its capacity and restructure its economy. Such alterations might not produce immediate outcomes, nevertheless, they need to be simultaneously instigated.”
He suggested allocating 60% of the budget towards populist policies, while the rest could be used for structural modifications. Long-term solutions encompassing labor capacity enhancement, research & development, and morphing into a low-carbon society could not only be sustainable but also pull in foreign investment.
Achieving a growth rate exceeding 3% has eluded Thailand for several past years, with the current year projected to clock in at 2.8%. Dr. Aat projected a 4% growth target timeline corresponding with the government’s entire four-year tenure. He asserted that the primary step would be magnetizing foreign investment, a strategy that ASEAN neighbors have also embarked upon.
Evaluting Populism’s Implementation
Investing in various populist parties was one of the Pheu Thai’s strategies in hopes of pacifying any backlash after it parted ways with the progressive Move Forward Party to inaugurate a new government.
The decision by Srettha’s Cabinet to put a hold on farmers’ debts was positively received by millions of them. However, Dr. Aat argues that this is merely a temporary solution that fails to address the underlying issue of how farmers will manage to sustain and increase their income in the future. The suspension of debt repayment has been done before, yet no one has taken the initiative to help develop farmers’ skills to increase their income and competitiveness on a global scale, he pointed out.
Dr. Aat warned that the debt monster will rear its head again, perhaps with increased intensity, once the suspension period concludes, without productively addressing the issue. Reduction of electricity and fuel costs to mitigate living expenses would be inconsequential if food prices continue to inflate. Dr. Aat emphasized the urgency for the government to address these structural problems before uncovering strategies that truly make a significant difference.