Stimulus measures welcomed


Government urged to watch for corruption

Business leaders and economists have responded positively to the government’s economic stimulus measures, seeing them as essential to a recovery but warning of the need to tackle corruption.

The first measures announced yesterday include the disbursement of 20% of the carry-over investment budget of 149 billion baht from fiscal 2014 for immediate job creation and to stimulate the economy.

The accelerated approval of investment applications worth more than 400 billion baht submitted to the Board of Investment before the May 22 coup is another measure.

An additional budget of 23 billion baht will be used for road construction and repairs to schools and hospitals nationwide.

Rice farmers who own zero to 15 rai will receive 1,000 baht a rai, while those owning more than 15 rai will receive a lump sum of 15,000 baht. Total spending on the aid will be about 40 billion baht.

Chen Namchaisiri, vice-president of the Federation of Thai Industries, said he agreed with the measures, as Thailand had lacked development for a long time amid political disputes.

“The government plans to speed up spending, but if it does not do so carefully, it could open the way to corruption,” he said.

Isara Vongkusolkit, chairman of the Thai Chamber of Commerce, hailed the government’s measures, saying the spending would go mostly to contractors and help to create employment, particularly for low-income earners.

“We particularly agree with the plans to accelerate disbursing existing and new budget but are also concerned that spending should be done transparently and under inspection,” he said.

Charl Kengchon, managing director of Kasikorn Research Center, said the stimulus was the best option to spur the economy in the fourth quarter.

Although Fiscal Policy Office director-general Kritsada Jinavijarana believes the measures could drive this year’s economic growth to 2%, Mr Charl questioned whether the public budget would be disbursed in time to achieve that figure.

Nipon Poapongsakorn, a distinguished fellow at the Thailand Development Research Institute, said the measures would achieve their purpose only if budget allocation and disbursement were fast enough and spending was on projects relying primarily on labour, not machinery.

“People, once employed, will spend immediately, bringing about a multiplier effect on the economy,” he said.

Mr Nipon sees no harm in giving cash to rice farmers, saying prices of rice and other farm products were relatively low. But he said the government should inform farmers the grant was just a one-off payment for this year and not for raising rice prices.

“Farmers should not be trapped in a price subsidy like they were under the previous government,” Mr Nipon said.



First published: Bangkok Post, October 2, 2014