Af­ter Thai­land votes, eco­nomic limbo beck­ons

The Myanmar Times - - News | Views - UMESH PANDEY news­room@mm­

AS the na­tion holds its breath for the out­come of the con­sti­tu­tional ref­er­en­dum, some of the gov­ern­ment’s think tanks are al­ready pre­par­ing for the pos­si­bil­ity of a dra­matic slow­down in eco­nomic ac­tiv­ity af­ter the vote.

If one looks at the cur­rent eco­nomic sit­u­a­tion, such as the con­tin­u­ing strength­en­ing of the baht cou­pled with slow­ing de­mand for goods all across the world and, to top this off, a sharp de­cline in foreign di­rect in­vest­ment re­cently re­ported by the Bank of Thai­land, the out­look for the econ­omy looks a lit­tle bleak.

The World Bank ear­lier pro­jected that Thai­land’s eco­nomic growth this year will be the worst among the ASEAN coun­tries, ex­clud­ing Brunei and Sin­ga­pore.

Con­sump­tion, an­other com­po­nent of the eco­nomic growth story, has yet to see a to­tal re­cov­ery and the only light at the end of the tun­nel seems to be the con­tin­ued in­fu­sion of funds by the gov­ern­ment through its var­i­ous mega-spend­ing pro­grams.

The gov­ern­ment has been try­ing to push through many in­fra­struc­ture projects and it is very likely the gov­ern­ment will ap­prove as many as four or five more rail lines as part of its mass-tran­sit de­vel­op­ment ini­tia­tives dur­ing the course of this year. Just a few weeks ago, the cabi­net ap­proved two el­e­vated rail lines to be con­structed for Bangkok com­muters, worth 44.2 bil­lion baht (US$1.26 bil­lion) in to­tal.

In var­i­ous dis­cus­sions with very se­nior mem­bers of the gov­ern­ment who have been work­ing hard to push through the eco­nomic de­vel­op­ment of the coun­try, the only fear they have is the “limbo” that Thai­land usu­ally gets into once there is a sign that the coun­try is head­ing for an elec­tion.

Thai­land over the past few decades has ex­pe­ri­enced this prob­lem of everything go­ing into “neu­tral gear” once the path to­ward an elec­tion is set. This means that civil ser­vants end up in in­ac­tive mode as they wait for new di­rec­tions from a new gov­ern­ment. They wait and see whether the new gov­ern­ment will con­tinue or dis­con­tinue the pre­vi­ous ad­min­is­tra­tion’s projects.

With Prime Min­is­ter Prayut Chano-cha con­tin­u­ing to stress that the Na­tional Coun­cil for Peace and Or­der (NCPO) will stick to its roadmap no mat­ter the out­come of the ref­er­en­dum, an elec­tion looks im­mi­nent in the se­cond half of 2017.

This could then lead to the in­fa­mous state of bu­reau­crats of var­i­ous ad­min­is­tra­tive bodies us­ing “neu­tral gear” dur­ing this gap pe­riod.

A move into “neu­tral gear” by gov­ern­ment of­fi­cials could be the straw that breaks the camel’s back. This is be­cause all the other en­gines of the econ­omy are still strug­gling and the only hope has been the in­fu­sion of gov­ern­ment fund­ing for megapro­jects.

This is not to say that the in­fu­sion by the gov­ern­ment has been ex­trav­a­gant. But the fact is that it is one of the few bright spots in in­vest­ment that is so cru­cial to the growth of the econ­omy.

The state of limbo our coun­try is poised to en­ter would be dif­fi­cult to get out of be­cause either a “no” or “yes” vote would have the same im­pli­ca­tion, that is an elec­tion by the se­cond half of 2017.

Gov­ern­ment min­is­ters have been scratch­ing their heads on how best they are go­ing to keep bu­reau­crats work­ing af­ter the cru­cial date of the ref­er­en­dum be­cause they know our “dear leader” may not be in power for a long time.

If either ap­proved or re­jected in the vote, un­der the in­terim char­ter, Gen Prayut and the NCPO can cling on to power as long as a new elected gov­ern­ment is not formed. Gen Prayut can con­tinue to ex­er­cise his ab­so­lute au­thor­ity un­der Sec­tion 44 of the in­terim con­sti­tu­tion.

Politi­cal ob­servers have pointed out that this sec­tion will re­main the coun­try’s supreme law in par­al­lel with the new con­sti­tu­tion for as long as 15 months.

The sec­tion will not be over­rid­den by the new char­ter. In ev­ery sense, Gen Prayut could use Sec­tion 44 af­ter the new con­sti­tu­tion is in place to get things mov­ing or even to sup­press his op­po­nents.

How­ever, with the dras­tic de­cline in di­rect foreign in­vest­ment that Thai­land has suf­fered dur­ing the past 10 months, his use of this “magic power” does not seem like it will ben­e­fit the na­tion.

The like­li­hood of the econ­omy stag­nat­ing could be a bad omen for the mil­i­tary gov­ern­ment and its fu­ture plans be­cause, as elec­tions ap­proach, eco­nomic prob­lems could be the area that could make the party the mil­i­tary de­spises re­turn to power.

This was one of the rea­sons the 2006 coup was un­suc­cess­ful and God for­bid if his­tory re­peats it­self.

– Umesh Pandey is the editor of Asia Fo­cus for the

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