As a sharp and insightful political critic, Prommin shared his thoughts about the hasty implementation of some governmental policies. A few of these initiatives included energy price reductions, farmer support schemes, tourism enhancement strategies, and soft power implementations. However, he reassured that the government has many more policies to introduce in the upcoming months.
Since it took office, Srettha Thavisin’s coalition government has displayed a clear focus on trimming government expenditure, raising income levels, and developing opportunities for both the citizens and the country.
Prommin highlighted the catastrophic effect on Thailand’s economy due to the Covid-19 pandemic. The country faced a 7% collapse in its GDP, which Prommin described as “the steepest fall and the slowest recovery” in the nation’s history, prompting many to wonder about the real progress of Thailand’s economy currently.
Household debt is another critical metric to look at. The debt to GDP ratio has escalated from 70% in 2012 to a staggering 90% in the present. This sharp incline underscores the severe economic challenges Thailand is battling.
Furthermore, with inflation dropping from a solid 5.02% in January this year to a near-negligible 0.30% in September, it’s clear the Thai population’s purchasing power is weakening. However, the government has taken measures to increase interest rates by 1.25%, thus landing at a rate of 2.50%. The present mission of the government is to devise strategies to ease the financial load on individuals and improve their overall living conditions.
Prommin outlined the government’s initial policy goal is to “cut back on expenditure” and zeroed in particularly on energy costs. This move was reflected in an initiative that saw electricity prices being brought down to 3.99 baht per unit in the most current billing cycle.
Following the cutback, the government released an “agricultural debt moratorium” policy, effective from October 1, intended to support those heavily indebted. “The analogy is like rescuing someone who’s on the verge of drowning. The government will provide financial aid to these individuals allowing them to stay afloat until they can finally swim towards safety,” explained Prommin.
Tourism is at the center of the “income generation” policy. Free visas for Chinese and Kazakhstani tourists visiting Thailand, and endeavors to reduce congestion that limits various aspects of the tourism sector, are just the tip of the iceberg.
Moreover, the focus is on fostering opportunities, which features traveling to international meetings like the distinguished 78th United Nations General Assembly in New York City. This presents a golden opportunity to draw investments into Thailand, especially in the energy and infrastructure sectors. The government has enlisted a committee to review the laws pertaining to investments.
Prommin shed light on how Amazon Web Services, a subsidiary of Amazon, expressed an intention to invest in cloud infrastructure in Thailand, totaling a whopping US$5 billion (or 1.9 trillion baht) over the subsequent 15 years. This new development certainly added to the excitement around potential investments in the country.
The government currently faces hurdles in attracting foreign investments and is resolved to address them promptly, as revealed by Prommin. Recently, Prime Minister Han Aung called for an urgent formation of an investment problem-solving committee. Spearheaded by Professor Tongthong Chandransu, the committee aims to eliminate various roadblocks, laying out a smoother path towards increased investment possibilities with the formation of the “Ease of Doing Business” committee.
Prommin also discussed another exciting development focusing on promoting Thailand’s soft power through the elevation of the One Tambon One Product (OTOP) concept. Recently, the premier presided over the inaugural meeting of the National Soft Power Strategy Committee. Their mission? To help to unlock the latent potential of Thai products, ultimately generating revenue for the nation.
By introducing digital money distribution via “digital wallets,” the government aims to create opportunities, offering 10,000 baht to each individual aged 16 years and above. Prommin clarified that this administration manages money differently, injecting a considerable sum of 5.6 trillion baht in digital money into the economy without destabilizing the nation’s fiscal discipline.
At a high-level committee meeting, led by the premier, it was confirmed that this initiative would not affect the nation’s credit rating. Previous concerns surrounding the usage and repayment of this sum have been addressed, according to Prommin.
The government reiterates the paramount importance of integrating digital money into the economy to stimulate economic growth. When people purchase goods, production increases, leading to further job openings. Ultimately, the government can garner more taxes, elaborated Prommin.
The government ponders various alternatives to finance the digital wallet initiative. These include employing the annual budget, tapping funds under Article 28 of the Financial Discipline and Treasury Act, or resorting to borrowing, if necessary. Deputy Finance Minister Julapun Amornvivat will lead the committee in summary of these options.
The current plan considers the redirection of funds from unnecessary projects in the annual budget. Major procurements will be held back if not critical and budget will be repurposed for upkeep and maintenance projects.
+Another approach hints towards utilization of Article 28, enabling state-level financial institutions to release funds in advance. The government views this as a feasible approach, despite pushing the fiscal limits.
The last resort would be direct borrowing, which wouldn’t sway the public debt-to-GDP ratio. The committee is underway analyzing and reaching a consensus on the most suitable prospects or a mix of various options, added Prommin. However, the work plan, including forthcoming policy implementations, ought to be closely monitored to ensure success and to tackle any unforeseen challenges head-on, concluded Prommin.