Up­hill task for Thai­land’s deputy prime min­is­ter

The China Post - - COMMENTARY - BY WI­CHIT CHAITRONG

Can Thai­land’s Deputy Prime Min­is­ter Somkid Ja­tus­rip­i­tak de­liver amid slower eco­nomic growth and the af­ter­math of last week’s Bangkok bomb blast, which has shaken con­fi­dence?

It is ob­vi­ous from Prime Min­is­ter Prayuth Chan-ocha’s Cab­i­net reshuf­fle that the rul­ing junta wants to en­hance the na­tion’s in­ter­na­tional im­age and boost eco­nomic part­ner­ships with other coun­tries.

The junta seems to be in­tent on cap­i­tal­iz­ing on Somkid’s mar­ket­ing ex­per­tise, as he had proved his worth in the ad­min­is­tra­tion of for­mer PM Thaksin Shin­wa­tra.

Somkid, who holds a doc­tor­ate from Kel­logg School of Man­age­ment at North­west­ern Univer­sity in the U.S., served as fi­nance min­is­ter and com­merce min­is­ter un­der Thaksin.

Dur­ing his time in of­fice, he won sup­port from lo­cal and in­ter­na­tional busi­nesses, prob­a­bly be­cause he spoke the same lan­guage of free trade with them, and his lively speech was able to get the au­di­ence’s at­ten­tion.

Somkid also seemed con­fi­dent when he took to the public stage in mak­ing speeches to win sup­port from for­eign coun­ter­parts.

In its reshuf­fle, the junta has also re­moved Gen. Tanasak Pa­timapragorn as for­eign min­is­ter and re­placed him with Don Pra­mud­winai, a vet­eran for­mer diplo­mat, which sug­gests that it wants to make friends with demo­cratic gov­ern­ments who are un­com­fort­able about talk­ing to gen­er­als.

The gov­ern­ment’s re­la­tions with the West have been strained since the coup last year, while the United States has also main­tained Thai­land on Tier 3 in Washington’s latest “Traf­fick­ing in Per­sons” re­port, a de­ci­sion many have crit­i­cized as be­ing mo­ti­vated by pol­i­tics, ar­gu­ing that the mil­i­tary gov­ern­ment has re­cently made progress in solv­ing hu­man-traf­fick­ing is­sues.

The Euro­pean Union, mean­while, has cut off of­fi­cial con­tact with Thai­land, so Don, as a civil- ian diplo­mat, might be able to im­prove the re­la­tion­ship with both the U.S. and Europe.

The junta has also ap­pointed Api­radi Tantra­porn to re­place Gen. Chatchai Sarikalya as com­merce min­is­ter, as well as re­moved Air Chief Mar­shall Pra­jin Jun­tong and re­placed him with Arkhom Termpit­taya­paisith as trans­port min­is­ter.

These moves also strongly in­di­cate that the gov­ern­ment wants to im­prove eco­nomic co­op­er­a­tion with the coun­try’s trad­ing part­ners.

Cur­rently, Thai­land is fac­ing the risk of trade sanc­tions by the U.S. due to its per­ceived lack of progress in re­gard to hu­man traf­fick­ing.

More­over, the EU might also im­pose some trade re­stric­tions on Thai­land due to ac­cu­sa­tions of slave la­bor and illegal fish­ing prac­tices among Thai trawler op­er­a­tors, while the Thai air­line in­dus­try also faces a risk of boy­cott from other coun­tries due to con­cerns over avi­a­tion safety stan­dards.

As Don, Api­radi and Arkhom will be much more ac­cept­able to their for­eign coun­ter­parts than the three mil­i­tary top brass they have re­placed, Somkid as deputy PM in charge of eco­nomic af­fairs might be able to do some­thing more pos­i­tive in the eyes of the in­ter­na­tional com­mu­nity.

Calls for Stim­u­lus Pack­age

Turn­ing to t he do­mes­tic econ­omy, Somkid faces an up­hill task to make peo­ple happy. The pro­longed po­lit­i­cal con­flict has re­sulted in an eco­nomic growth rate lower than its po­ten­tial.

More­over, the bomb blast at the Erawan Shrine in Bangkok, re­sult­ing in 20 dead and more than 100 in­jured, has put more pres­sure on the weak econ­omy, as it is ex­pected to hit the tourism in­dus­try hard.

Rev­enue from for­eign tourists is cur­rently the life blood of the econ­omy, as ex­ports have not yet re­turned to pos­i­tive ter­ri­tory.

Econ­o­mists have sug­gested that Somkid should launch a short- term eco­nomic stim­u­lus pack­age, aimed at sup­port­ing lower- and mid­dle- in­come groups.

“A stim­u­lus pack­age such as (one in­clud­ing) a tax break is needed, as the bomb­ing might wipe out half of the coun­try’s tourism in­come,” said Chu­la­longkorn Univer­sity economist Som­prawin Man­prasert, who ex­pects gross do­mes­tic prod­uct to ex­pand by just 2.5-2.7 per­cent this year.

Som­chai Jit­su­chon, re­search di­rec­tor at the Thai­land De­vel­op­ment Re­search In­sti­tute, sug­gested that the gov­ern­ment may have to give hand­outs to the low­in­come group.

Newly ap­pointed Fi­nance Min­is­ter Apisak Tan­tivo­ra­wong, mean­while, faces a dif­fi­cult task when it comes to bud­get dis­burse­ment.

He is part of Somkid’s team, but he may not be able to do much due to the in­ef­fi­ciency of gov­ern­ment agen­cies and state en­ter­prises.

Thai­land’s in­fra­struc­ture in­vest­ment needs are es­ti­mated to be 2.4 tril­lion baht (US$67 bil­lion) be­tween 2015 and 2022. While the ac­tual fi­nanc­ing of public in­vest­ment is not a se­ri­ous con­cern, how to im­ple­ment the projects ef­fi­ciently is the hard­est part.

The re­form of state agen­cies and state en­ter­prises has not yet made much progress, so im­ple­ment­ing the public in­vest­ment pro­gram will take time.

There­fore, it could be said that while Somkid has a dream team at his dis­posal, he may not be able to do much to boost Thai­land’s im­age as long as the EU and the U.S. re­main at odds with the mil­i­tary regime.

On the eco­nomic front, Somkid may win back some con­fi­dence, but not a great amount due to the per­sis­tent do­mes­tic po­lit­i­cal un­cer­tainty that is dam­ag­ing both con­sumer and in­vestor con­fi­dence.

More­over, he will also find it hard to win the heart and soul of a low-in­come group that con­tin­ues to be badly af­fected by the coun­try’s eco­nomic woes.

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