Govt can’t rely on pot luck
Prime Minister Prayut Chan-o-cha’s decision to change lotus pots at Government House from grey to greenish-blue has prompted speculation that it might have something do with adhering to principles of feng shui, or Chinese geomancy, in order to boost the luck of his regime. His government needs some luck, especially with lifting the ailing economy. As the military regime gears up to celebrate its third anniversary on May 22 since staging the coup in 2014, Gen Prayut and his military men will have about one year left to showcase their performance in key areas ahead of planned elections that are supposed to take place by late next year.
It is obvious that the economic downturn is one of the regime’s main concerns. The prime minister himself has publicly admitted it. A recent Suan Dusit Poll, for example, indicated that the ailing economy is one of the biggest problems worrying the majority of people.
The economic slump is far more visible in the small & medium-sized enterprise (SME) sector which also plays a key role in the country’s economic well-being.
The sector, unfortunately, has started to suffer. A recent revelation by Kasikornbank Plc indicates that its SME loan growth for this year will most likely be in the range of 1-2% — much lower than the 4-6% growth rate it experienced last year.
The bank revealed that 40% of its 1.2 trillion baht of loans is channelled to the SME sector. More surprisingly, the bank says 250,000 SMEs are still in dire need of financial support — an indication that the sector, which employs the bulk of the country’s workforce, is not in good shape. According to available data, SMEs account for about 37% of Thailand’s gross domestic product and more than 80% of the country’s workforce.
Additionally, the financial sector’s first-quarter results have shown an uptick in non-performing loans (NPLs), prompting the banking sector to increase their provisions.
Although these NPLs are not a major concern, the increase sends a warning that the economy as a whole is not in the best of shape.
These trends in the economic downturn continue against the trumpeting of “economic achievements” by this government. To top this off, latest data has shown a decline in foreign direct investment. During the first quarter of this year, applications submitted to the Board of Investment (BoI) saw a decrease of 17% year-on-year.
All these ailing economy indicators have again prompted speculation over a cabinet reshuffle, especially a change in the economic team.
With about a year to go, the government of Gen Prayut needs to figure out what it wants to do and how to lift the economy. Any economic boost undertaken has a lag time of six to 12 months to show an impact, and thus it may be the right time for the regime to start to take action if it wants people to feel economic improvements ahead of the election next year.
Economic performance will be a deciding factor that will help make or break the regime.
Better luck for this regime is unlikely to come from a change of colour of lotus pots at Government House, if public speculation is right. Concrete government action is far more important for boosting the economy.
Economic performance is likely to be one of the key deciding factors in the polls next year. If voters are satisfied with economic conditions at election time, they may support candidates associated with the regime. If not, the regime’s political future, if it aspires to enter the political fray as suspected, may not be so bright.
Economic performance will be a deciding factor that will help make or break the regime.