Government Will Have To Rethink Overall Strategy: Thai Opinion

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EDITORIAL

Government will have to rethink overall strategy

The Nation

After the floods, populist policies must be put on the backburner; restoring confidence and reviving the economy are now the priorities

The government will have to re-prioritise its economic policy after the floodwaters recede. The massive flooding, the worst in Thailand for fifty years, has caused a drastic change in the overall circumstances.

The urgent priority now is to restore the confidence of overseas investors in Thailand, as the deluge has damaged plants and factories in five key industrial estates in the central region north of Bangkok. While Thailand's geographical location is its advantage in attracting foreign investors, some are now questioning whether the Thai authorities have adequate infrastructure or facilities to help them prepare for natural disasters by, for instance, providing advance warnings.

The Yingluck government originally planned to use its populist policies - such as a rise in the minimum wage, tax benefits for the buyers of first cars and first houses - to boost economic growth.

After the floods have cleared, economic growth should not be the government's priority. The big challenge will instead be post-crisis management.

The Bank of Thailand has predicted that the floods will reduce Thailand's economic growth by one percentage point from its original forecast of 4.2 per cent for this year. According to preliminary estimates, the forced closure of six industrial estates will cost the manufacturing sector at least Bt100 billion.

The government has a challenging mission indeed to rehabilitate industry and revive investors' confidence. The shutdown of many businesses and the suspension of industrial and commercial supply chains may cause massive job losses, especially among contracted workers. This is not to mention farmers, whose lands have been inundated and crops destroyed. The government has estimated that the flooding will affect some 620,000 workers.

The government has recently received the authority to increase the budget deficit to Bt400 billion. But this increased deficit should not now be spent on populist schemes for political gain. Rehabilitation is the order of the day. It is now imperative that the administration revises some of its populist schemes. For instance, the rise in the minimum wage may not be practical as the biggest problem facing many workers is potential job loss as a result of suspended operations at some damaged factories.

Those populist policies that should be up for immediate revision also include the plan to raise the starting salaries of university graduates to Bt15,000 and the rice subsidy programme for farmers.

In the meantime, the government will also have to be prepared for external factors that remain highly unpredictable. The debt crisis in Europe and the ongoing financial and economic woes in the US are significant issues that could have repercussions for Thailand. The floods here will also affect the Japanese industrial sector because the closure of local plants has disrupted supplies of materials for other assembly lines.

If the administration still insists on going ahead with its populist platform without considering these latest incidents, which have greatly affected the economy, it faces the risk of losing some of its loyal constituencies because they will be directly affected by such economic mismanagement.

The Thai economy needs to be revived and restored according to the right prescription, to ensure that it emerges healthier and stronger. The economic platform that the government campaigned on before the election might have worked to score political points for the Pheu Thai Party, but it may not be the right option during the current crisis.

-- The Nation 2011-10-22

[OzMick]

The most expensive (to govt coffers) of the populist policies is the rice pledging scheme, admitted to cost circa 400 billion baht but likely to be much more. It's earlier incarnation was highly inaccurate in its disbursal, with only an estimated 37% reaching farmers, with no info as to the relative wealth of those farmers.

Many of the intended recipients have lost their crop due to the flooding and so will receive no benefit. Large amounts of rice have been stockpiled, and illegal imports made from Cambodia and elsewhere, ready to claim the subsidy. If many of the stated intended beneficiaries are not going to profit but scammers will, why do they insist on going ahead with an expensive scheme at a time when funding could be used much better elsewhere?

IMHO there are several reasons:

1/ This is a Thaksin scheme. He initiated it the original and persisted when it became obvious that it was expensive, inefficient and open to corruption. Does his puppet PM have the power to stop it - not likely while he pulls her strings.

2/ The real intended recipients are his powerful supporters, the rich rural rice barons. Money has been outlaid to store rice and sneak extra in to the country. When you cause your rich Thai friends a loss instead of a quick profit, the friendship wanes VERY quickly.

3/ The rice farmers who still have crop will not be happy. This was a vote buying promise with figures much larger than the (much more accurate in its delivery of benefits) price guarantee that it replaces. If the pledging funds didn't make their way to the farmer, they would blame the rice barons who couldn't give a toss, but if the scheme is cancelled, the blame goes to PTP.

4/ Quite a few of the PTP populist policies have been deferred, others allowed to slip out of sight. B300/day recedes another few months, and is likely to go back a lot further yet. Tablets, forget about it. Houses and cars look like they will be the first to go. What policy will they have to be remembered by, "No More Floods"? PTP - a chicken in every pot, a car in every garage, a metre of water in every room.

[scotbeve]

I think everyone can have a rethink when they see the SATELLITE PICTURES FROM SPACE!!!! Real scary! See >>>>> http://earthobservatory.nasa.gov/NaturalHazards/view.php?id=76110 and

[elgato]

"Rethink" implies that there was some THINKing being done in the first place

[h90]

Overall strategy:

Everything for Thaksin.

Fill the pockets as fast as possible (so the money is safe in Singapore once they get kicked out)

Put as many family members in key position of police, army, courts

Till now everything runs fine. The water no problem, till the next election everyone has forgot it.

[hammered]

Things wont go back to how they were whatever the government does or the next government. The mistakes of the past decades need to be undone. The lessons of water management learned and urban development needs to be managed and decentralized away from places where water naturally flows. There is no short fix and in the future this will likely only occur again

[OzMick]

Things wont go back to how they were whatever the government does or the next government. The mistakes of the past decades need to be undone. The lessons of water management learned and urban development needs to be managed and decentralized away from places where water naturally flows. There is no short fix and in the future this will likely only occur again

Well hopefully the next time it occurs, the idiots in control now will be long gone.