Putting Populist Pledges Into Action May Bankrupt Us All; Thai Opinion

[webfact]

EDITORIAL

Putting populist pledges into action may bankrupt us all

By The Nation

The Pheu Thai Party needs to reconsider its promised billion-baht give-aways

The prospective Pheu Thai-led coalition government will now have to reconsider carefully how to implement the pledges it gave to voters during the election campaign.

The Pheu Thai Party lured voters with a raft of policies it promised to implement should it gain power. However, some of those policies may squander taxpayers' money, failing to boost the capacity of the country's human capital and create sustainable wealth for its people.

Pheu Thai is a champion of populist policies, and many voted for the party because they wanted to benefit from such policies. However, when populism is put into action, the country's fiscal health can suffer through the massive budget spending needed to finance give-away programmes.

Pheu Thai ran a campaign full of policies aimed at catching the voter's eye. Included were pledges to raise the national minimum wage to Bt300 per day, offer higher prices to farmers for their rice crops, provide tablet computers to all primary schools, cap mass-transit train fares at Bt20, and ensure college graduates receive support of Bt15,000 per month.

While the party has yet to spell out how it will implement these projects, there are already concerns that some of these policies could be a waste of taxpayers' money, leading to more damage than benefits.

Credit ratings agency Standard and Poor's recently warned of the dangers. "Implementing many of these policies without having proper appropriation of the revenues would adversely affect the country's fiscal position," said Takahira Ogawa, a credit analyst for the agency.

Measures undertaken by the last government over several years to counter the global recession and implement populist policies have already eroded Thailand's fiscal strength, he was quoted as saying.

"Further significant erosion could be detrimental to the current ratings," Ogawa cautioned.

For instance, Pheu Thai may have to reconsider its pledge to distribute computers to each primary school student. The "one tablet per child" programme would amount to 800,000 computers at a cost of about Bt4 billion. But it remains to be seen how this project would contribute to the children's development - especially those living in rural areas with no broadband coverage.

The pledge to raise the minimum wage to Bt300 in 90 days might also lead to uncontrollable inflation. It is crucial that the minimum wage level be acceptable to both employers and workers so as to ensure it is practical and conducive to the business environment. A rate set too high would discourage factories from hiring workers, causing high inflation and creating potential job losses as factories turned to outsourcing.

The rice-pledging programme is also likely to cost more than Bt100 billion. And yet, the programme would not benefit poorer farmers, as they lack the facilities to store and dehydrate rice as required by the pledging programme. The major beneficiary would in fact likely be the rice millers.

Populist policies are not necessarily bad, but they must be implemented only according to necessity, as short-lived programmes to ease the suffering of people and complement other sustainable policies.

It would be unfortunate if political parties used full-blown populist policies so as to inflate the economy's growth figures in the short run, without considering the consequences to the country in the longer term.

Instead, the government has a duty to focus on policies to boost Thailand's capacity and competitiveness in the long term. Populist policies also instil a perception that the government will provide people with economic security, which discourages self-reliance in favour of reliance on hand-outs.

In addition, such policies naturally attract corruption because of the huge sums of taxpayers' money involved.

A country will fail to develop if its government places a higher priority on populist policies than on a sustainable economic platform to boost the country's long-term competitiveness. Although these give-aways may seem like an essential element of economic strategy because voters have become addicted to them, the Pheu Thai Party-led government must reconsider how to implement them in the best interests of the people. Otherwise, we could all be bankrupted altogether.

-- The Nation 2011-07-07

[Jingthing]

Spot on, The Nation. May you keep publishing the Truth Today ... and tomorrow.

[chaoyang]

Expect a continued barrage from the biased Nation, which is itself a sweatshop (I know, I worked there).

Mouthpiece for the so-called educated elite.

[ozzieman05]

Expect a continued barrage from the biased Nation, which is itself a sweatshop (I know, I worked there).

Mouthpiece for the so-called educated elite.

Tell the truth and your called Biased

"There are three kinds of economists, those who can count and those who can't.

[whybother]

Expect a continued barrage from the biased Nation, which is itself a sweatshop (I know, I worked there).

Mouthpiece for the so-called educated elite.

Maybe TV should be posting articles from completely unbiased sources, such as 'Voice of Taksin' or 'Truth Today'.

Edit: BUT, how are the PTP government going to pay for their promises?

Edited July 6, 2011 by whybother

[RickBradford]

Whenever Marxist-style policies are imposed, they always backfire.

Take, for example PT's plan for college graduates to be paid 15,000Baht per month. How will employers react? By hiring non-graduates to do the work instead, at 7000Bt. Result? A spike in the number of unemployed college graduates. Brilliant.

The same applies to the 300baht minimum wage -- employers will simply employ fewer people or drag in more illegal migrants from Laos and Burma.

It's not rocket science -- but still beyond the grasp of the thinkers at PT, apparently.

[webfact]

related

Quality products, not cheap labour, Pheu Thai policy: Jaruphong

Follow this link:

[themockrat]

What did we have under Abhisit's rule?

- Relations with neighboring countries at its worst, to the brink of war with Cambodia.

- Worst ever human rights record in Thailand's history.

- Highest debt in Thailand's history.

It can't get much worse. Just more crappy reporting by TheNation.

[virtualtraveller]

What did we have under Abhisit's rule?

- Relations with neighboring countries at its worst, to the brink of war with Cambodia.

- Worst ever human rights record in Thailand's history.

- Highest debt in Thailand's history.

It can't get much worse. Just more crappy reporting by TheNation.

- Relations with a neighbour determined to bring us to the brink of war to force a change in govt.

- ahem, the Thaksin war on drugs equalled 30 sustained days of Ratchaprasong in terms of deaths, mainstream media was more stiffled under Thaksin...

- Nope, that was back in 2001 when Thaksin came to power while we were paying back the IMF for the 97 crash, Abhisit meanwhile inherited a world recession and weathered far better than most nations.

A person like you has the gall to accuse The Nation of being biased or inaccurate?

[Nisa]

Does this mean all the taxi drivers will not be receiving the free credit card Thaksin promised?

[LomSak27]

What did we have under Abhisit's rule?

- Relations with neighboring countries at its worst, to the brink of war with Cambodia.

- Worst ever human rights record in Thailand's history.

- Highest debt in Thailand's history.

It can't get much worse. Just more crappy reporting by TheNation

.

Well they have to say something

[OzMick]

There seems to be a few people who agree with me. On the other hand, what do Standard and Poors know about bankruptcy compared to PTPs advisers, like Olarn Chaipravat?

"The rice-pledging programme is also likely to cost more than Bt100 billion. And yet, the programme would not benefit poorer farmers, as they lack the facilities to store and dehydrate rice as required by the pledging programme. The major beneficiary would in fact likely be the rice millers."

The figure I read was closer to 200 billion, and more than a third of that was because Yingluk stopped smiling long enough to make a spontaneous, but very well received, remark which increased the guarantee price from B15,000 to B20,000/tonne. Will she cry when she tells them it was only a campaign promise?

As usual, all the sweet words of love of the night before fade away in the harsh reality of sunlight. And we all know who got f****ed in the meantime.

[OzMick]

What did we have under Abhisit's rule?

- Relations with neighboring countries at its worst, to the brink of war with Cambodia.

- Worst ever human rights record in Thailand's history.

- Highest debt in Thailand's history.

It can't get much worse. Just more crappy reporting by TheNation.

- Relations with a neighbour determined to bring us to the brink of war to force a change in govt.

- ahem, the Thaksin war on drugs equalled 30 sustained days of Ratchaprasong in terms of deaths, mainstream media was more stiffled under Thaksin...

- Nope, that was back in 2001 when Thaksin came to power while we were paying back the IMF for the 97 crash, Abhisit meanwhile inherited a world recession and weathered far better than most nations.

A person like you has the gall to accuse The Nation of being biased or inaccurate?

I had never heard of a mock rat, but like Carroll's mock turtle, it seems to be a rather stupid animal.

[MunterHunter]

So perhaps next election the Democrats can promise a free Mercedes, 3 bedroom detached house and free electricity for a year to all the Thai people as part of their election campaign, then after getting voted into government they can just say "oh, it would bankrupt the country if we do this, so sorry... you aint gunna get it after all!"

[hammered]

Of course there are elements of truth to it and enough populist policies can bankrupt a country but:

1. Where was all the criticism when the last government was doing it?

2. There is another side to the equation: taxation. You can spend anything you like if it balances and doesnt result in mutiny among the masses. It is really the longer term tax issue to support welfare etc policies that needs sensible planning so the projects are sustainable over time.

[ginjag]

Does this mean all the taxi drivers will not be receiving the free credit card Thaksin promised?

Thaksin never goes back on his word, he is pure and truthful and law abiding, so the answer must be. ????

I havent heard or read anything to say they won't--has anyone else??? it's a promise that seems to have been forgotten.

Edited July 7, 2011 by ginjag

[Crushdepth]

Expect a continued barrage from the biased Nation, which is itself a sweatshop (I know, I worked there).

Mouthpiece for the so-called educated elite.

Do you have any substantial criticism of the article? Do you really think these policies are affordable? I'd love to know where you think the money is going to come from.

[Nisa]

Does this mean all the taxi drivers will not be receiving the free credit card Thaksin promised?

Thaksin never goes back on his word, he is pure and truthful and law abiding, so the answer must be. ????

I havent heard or read anything to say they won't--has anyone else??? it's a promise that seems to have been forgotten.

There was another thread about Thaksin saying he has no plans of returning at this moment. Your comments made me remember another promise he made in that he would spend the night in every district where PT won in the elections.

People say The Nation is biased against Thaksin but unless they also have the memory of a fly, I can't see why they are not bringing up these obvious contradictions (lies) since they were the ones carrying these quotes just a month or two ago.

[ginjag]

Does this mean all the taxi drivers will not be receiving the free credit card Thaksin promised?

Thaksin never goes back on his word, he is pure and truthful and law abiding, so the answer must be. ????

I havent heard or read anything to say they won't--has anyone else??? it's a promise that seems to have been forgotten.

There was another thread about Thaksin saying he has no plans of returning at this moment. Your comments made me remember another promise he made in that he would spend the night in every district where PT won in the elections.

People say The Nation is biased against Thaksin but unless they also have the memory of a fly, I can't see why they are not bringing up these obvious contradictions (lies) since they were the ones carrying these quotes just a month or two ago.

Agreed again, Why don't they come back with the promises made by him ?and remind the readers what was promised. We get topics from them and then they do NOT report the follow ups---2 faced-- trying to appease all??

Newspapers should print truths and report wrongs.

[OzMick]

Of course there are elements of truth to it and enough populist policies can bankrupt a country but:

1. Where was all the criticism when the last government was doing it?

2. There is another side to the equation: taxation. You can spend anything you like if it balances and doesnt result in mutiny among the masses. It is really the longer term tax issue to support welfare etc policies that needs sensible planning so the projects are sustainable over time.

"................... and doesnt result in mutiny among the masses."

Ah, you're getting there! You see, people working in a factory or shop 26+ days per month really have a hard time seeing why their taxes should be doubled to pay subsidies to rice farmers, who are perceived to spend a lot of time sitting under a tree drinking cheap booze (in between periods of hard work).

It is always the working class that pay the majority of tax because it is deducted from a wage, while the rich can find the means to duck and dive with tax minimisation schemes.

[chaoyang]

Do you have any substantial criticism of the article? Do you really think these policies are affordable? I'd love to know where you think the money is going to come from.

Sure, let take one of the statements blithely thrown out:

"The pledge to raise the minimum wage to Bt300 in 90 days might also lead to uncontrollable inflation. It is crucial that the minimum wage level be acceptable to both employers and workers so as to ensure it is practical and conducive to the business environment. A rate set too high would discourage factories from hiring workers, causing high inflation and creating potential job losses as factories turned to outsourcing."

Uncontrollable inflation? How would that lead to such an unstoppable juggernaut?

It might cause some additional inflation, but even so, I would think a minimum wage of $10 a day should be considered a basic necessity, not a luxury. When was the last time the minimum wage was raised? This being Thailand, I'm sure it was quite some time ago. Of course inflation would have continued apace in the interim, so this would likely allow worked to pull even with the erosion in buying power they have already suffered. Gawd, these awful PT people think workers should get 7,200 baht a month for a 6-day workweek?

Because Thailand can't compete in efficiency and innovation, it has to battle it out on price, so someone has to make the sacrifice -- of course the powerless workers should take the hit.

At any rate,the statement above is alarmist exaggeration, and is one part of what is sure to be a continuing campaign of attacks by the Nation, which BTW, I'm sure doesn't want to pay it's workers a decent wage.

Edited July 7, 2011 by chaoyang

[Britannia]

For instance, Pheu Thai may have to reconsider its pledge to distribute computers to each primary school student. The "one tablet per child" programme would amount to 800,000 computers at a cost of about Bt4 billion. But it remains to be seen how this project would contribute to the children's development - especially those living in rural areas with no broadband coverage.

Can someone please inform me: what age are Primary school students in Thailand, I know in England it is under 11 years

I think there is a lot you could teach chidren without the aid of a computer at this age

Children learn very quickly and grasp understanding more profoundly from age 11, to me that is the time to introduce computer study and computer availability

more so in a developing country

[hammered]

Of course there are elements of truth to it and enough populist policies can bankrupt a country but:

1. Where was all the criticism when the last government was doing it?

2. There is another side to the equation: taxation. You can spend anything you like if it balances and doesnt result in mutiny among the masses. It is really the longer term tax issue to support welfare etc policies that needs sensible planning so the projects are sustainable over time.

"................... and doesnt result in mutiny among the masses."

Ah, you're getting there! You see, people working in a factory or shop 26+ days per month really have a hard time seeing why their taxes should be doubled to pay subsidies to rice farmers, who are perceived to spend a lot of time sitting under a tree drinking cheap booze (in between periods of hard work).

It is always the working class that pay the majority of tax because it is deducted from a wage, while the rich can find the means to duck and dive with tax minimisation schemes.

Virtually everyone in Thailand working in a shop or factory is not paying tax as they dont earn enough, and many are on daily pay. Many many farmers who can only grow one crop a year as water is diverted for other uses also end up doing a few months in a factory, on a building site or even in a shop or behind the wheel of a taxi if orgasmically lucky

[whybother]

Of course there are elements of truth to it and enough populist policies can bankrupt a country but:

1. Where was all the criticism when the last government was doing it?

2. There is another side to the equation: taxation. You can spend anything you like if it balances and doesnt result in mutiny among the masses. It is really the longer term tax issue to support welfare etc policies that needs sensible planning so the projects are sustainable over time.

The other side to the PTP promises is a reduction in corporate tax from 30% to 23%. Is that a good balance?

[whybother]

For instance, Pheu Thai may have to reconsider its pledge to distribute computers to each primary school student. The "one tablet per child" programme would amount to 800,000 computers at a cost of about Bt4 billion. But it remains to be seen how this project would contribute to the children's development - especially those living in rural areas with no broadband coverage.

Can someone please inform me: what age are Primary school students in Thailand, I know in England it is under 11 years

I think there is a lot you could teach chidren without the aid of a computer at this age

Children learn very quickly and grasp understanding more profoundly from age 11, to me that is the time to introduce computer study and computer availability

more so in a developing country

The promise is only for grade 1 students. That would be about 5 years old.

[Bakseedaa]

What did we have under Abhisit's rule?

- Relations with neighboring countries at its worst, to the brink of war with Cambodia.

- Worst ever human rights record in Thailand's history.

- Highest debt in Thailand's history.

It can't get much worse. Just more crappy reporting by TheNation.

- Relations with a neighbour determined to bring us to the brink of war to force a change in govt.

- ahem, the Thaksin war on drugs equalled 30 sustained days of Ratchaprasong in terms of deaths, mainstream media was more stiffled under Thaksin...

- Nope, that was back in 2001 when Thaksin came to power while we were paying back the IMF for the 97 crash, Abhisit meanwhile inherited a world recession and weathered far better than most nations.

A person like you has the gall to accuse The Nation of being biased or inaccurate?

Hear Hear....... completely agree............

[Britannia]

For instance, Pheu Thai may have to reconsider its pledge to distribute computers to each primary school student. The "one tablet per child" programme would amount to 800,000 computers at a cost of about Bt4 billion. But it remains to be seen how this project would contribute to the children's development - especially those living in rural areas with no broadband coverage.

Can someone please inform me: what age are Primary school students in Thailand, I know in England it is under 11 years

I think there is a lot you could teach chidren without the aid of a computer at this age

Children learn very quickly and grasp understanding more profoundly from age 11, to me that is the time to introduce computer study and computer availability

more so in a developing country

The promise is only for grade 1 students. That would be about 5 years old.

Thank you for that information

Then in my opinion, it is ridiculous, to introduce computers to children of such a young age, even before they have learnt any mathematics or language skills.

To a child of 5 I would consider a computer would be viewed as a toy not as a learning tool.

Save the 4Billion, direct it elsewhere

[noahvail]

Thank you for that information

Then in my opinion, it is ridiculous, to introduce computers to children of such a young age, even before they have learnt any mathematics or language skills.

To a child of 5 I would consider a computer would be viewed as a toy not as a learning tool.

Save the 4Billion, direct it elsewhere

I think it depends on the child and the teacher. I started my older son on the computer at age 4, he learned to read and write and do maths on it through educational games, and was an honour student throughout his educational career, and actually got written up in PC World when he was 15. He now designs and builds websites when he feels like it, it gives him a comfortable living. My younger son started when he was 2, same programs, was honours and high honours; he's in premed now, wanting to become a diagnostician, and gets much of his info from the net.

Enough bragging Even though there are young kids in Thailand who could benefit from even a cheap tablet, I doubt that there are many teachers who could take the time with over-full classrooms to really teach what needs to be taught on them. Plus, most schools in the provinces are not connected to the net. There are plenty of schools here with computer classrooms that simply do not get used at all. I fear it will be a tremendous waste of money, and that very few kids will see any benefit at all.

[wolfmanjack]

Of course there are elements of truth to it and enough populist policies can bankrupt a country but:

1. Where was all the criticism when the last government was doing it?

2. There is another side to the equation: taxation. You can spend anything you like if it balances and doesnt result in mutiny among the masses. It is really the longer term tax issue to support welfare etc policies that needs sensible planning so the projects are sustainable over time.

"................... and doesnt result in mutiny among the masses."

Ah, you're getting there! You see, people working in a factory or shop 26+ days per month really have a hard time seeing why their taxes should be doubled to pay subsidies to rice farmers, who are perceived to spend a lot of time sitting under a tree drinking cheap booze (in between periods of hard work).

It is always the working class that pay the majority of tax because it is deducted from a wage, while the rich can find the means to duck and dive with tax minimisation schemes.

Glad you mentioned this. I thought i was going to help the farmers in my wifes village by providing them with jobs while they were waiting for their crop to be ready to harvest. Nope. i could not get one single person to work at their home in their spare time making the same money people here in town were getting. That was the last time my wife brought up helping the people in her village.

[Skywalker69]

What did we have under Abhisit's rule?

- Relations with neighboring countries at its worst, to the brink of war with Cambodia.

- Worst ever human rights record in Thailand's history.

- Highest debt in Thailand's history.

It can't get much worse. Just more crappy reporting by TheNation.

Sure it can get worse, you just wait and see.