Thailand's political situation a concern: Prasarn

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Political situation a concern: Prasarn
ERICH PARPART
THE NATION



BANGKOK: -- THE OUTGOING Bank of Thailand (BOT) governor said in an exclusive interview with the Nation Group that the ongoing political situation, Thailand's economic potential and "boiling-up issues" are his three main concerns as his five-year term comes to an end on September 30.

Governor Prasarn Trairatvorakul will be replaced by Veerathai Santiprabhob, a former economist at the International Monetary Fund, at the end of this month. Prasarn revealed he had told Veerathai that maintaining the central bank's credibility was one of the top priorities of the BOT governor so as to sustain the country's financial stability.

"I think Thailand's political situation is my first concern and from my five years in the job this is a major issue for the country," said Prasarn.

"During my five years as governor, I had to work with three governments and five finance ministers and this reflects the discontinuity at the political level," he added.

He explained that there is a "political mistrust" within the country and fixing problems, such as the reforming of state-owned enterprises by setting up a new organisation, have become a prolonged ordeal where political intervention and conflict over benefits have wasted a lot of time that could have been used to reform the county.

"The government is currently affected by the coup d'etat and the return to normalcy in the mid-term is still elusive. What we are seeing right now is a temporary support but there are many issues that are cropping up and these issues require time to fix them. Building the confidence level is what has to be done first," he said.

"Right now, the country is lacking in investment and the private sector has an abundance of capital but investors have to think because it would take most of them five to ten years before they can get their returns," he added.

Prasarn said Thailand's economic potential is in jeopardy because the private sector is "unfit" from lack of investment practice and they are falling behind in terms of competitiveness as the Kingdom is being overtaken by Vietnam and Indonesia for investment attractiveness.

For example, the quality of our education has led to the lack of skilled labour and innovation and that has lowered the country's competitiveness, he added.

Meanwhile, the central bank governor said brewing issues such as ageing society, the impending increase in value-added tax (VAT), the International Civil Aviation Organisation red flag, and the illegal, unreported and unregulated fishing problem could lead to a further slowdown of the economy in the future.

"People are comparing this to the Tom Yum Goong crisis in 1997 but at that time it was like some-body threw boiling water at us and we were jolted and we tried to fix things in 1997, 1998, and 1999. Though stumbling and falling, we were able to stand up but this time it is like sitting in boiling water and we do not feel it," he said.

"This is harder to fix because if you begin to warn people that the water is boiling, people would say that you are bothering them and this has made it harder to convince people something has to change," he added.

When asked what the outgoing governor wants to say to the incoming BOT governor, Prasarn said that Veerathai is "more prepared" for the office than he was when he took the reins, as Veerathai is already one of the members of the BOT's Monetary Policy Committee. Prasarn, however, reminded Veerathai to maintain the central bank's credibility and flexibility in monetary policy, good governance along with a variety of monetary tools and transparency in policy.

Source: http://www.nationmultimedia.com/business/Political-situation-a-concern-Prasarn-30269660.html


-- The Nation 2015-09-28

[davehowden]

"it is like sitting in boiling water and we do not feel it,"

Could not have put it better myself.

[meltingpot2015]

If you put a crab in water and gradually heat the pot, apparently it does not feel pain. Stick a lobster in Boiling water it can almost jump out.

As for the story about putting a frog in boiling water - it jumps out. Put it in a pot of water then gradually boil it, and it stays. That's just a myth. Good metaphor though,

Edited September 28, 2015 by meltingpot2015

[Srikcir]

While Veerathai is "more prepared" for the office than Prasarn was when he took the reins, he has far less opportunties and tools to use to secure Thailand's investment landscape. Veerathai will find that he is not at the reins but rather in the caboose of Prayut's economic train wreck.