ECONOMIC Thai PM Srettha focuses on economic stimulus amid state...

Thai PM Srettha focuses on economic stimulus amid state debt concerns

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Thai Prime Minister Srettha Thavisin, left, and Paetongtarn Shinawatra, the youngest daughter of former Prime Minister Thaksin Shinawatra, are photographed at the headquarters of the ruling Pheu Thai Party in Bangkok on Oct. 27, 2023. (Kyodo)


BANGKOK (Kyodo) — Thai Prime Minister Srettha Thavisin has been focusing on stimulating Thailand’s sluggish economy since taking office on Sept. 5, after months of political deadlock that hindered the formation of a government following the May 14 general election.


While Tuesday marked the first three months of Srettha’s Pheu Thai Party government, he is facing headwinds in gaining support for controversial “digital wallet” handouts, amid concern over an increase in government debt.


Doubling as finance chief, Srettha, 61, has said he aims to promote consumption through the giveaway, in a bid to boost Southeast Asia’s second-largest economy, still on a recovery path after the COVID-19 pandemic.


Under the digital wallet scheme, the government plans to give 10,000 baht ($287) in digital money to people aged 16 and over to spend in their localities.


“The scheme is to inject money into the economy by enabling people to spend, in a partnership with the government aimed at reviving the economy,” Srettha told reporters on Nov. 10 about the handouts, which critics say will worsen the national finances with debt having reached 11.13 trillion baht, or 62.14 percent of GDP, in September.


Yutthaporn Issarachai, a political scientist at Sukhothai Thammathirat Open University, said of the scheme, “People will be happy if the government can improve their lives, but it is a short-term solution. Solving problems at the root cause, such as inequality, is more important.”


Responding to criticism that the proposed scheme was wasteful, Srettha decided in November to target only people in the age group who earn less than 70,000 baht per month or hold no more than 500,000 baht in savings.


Still, the government will need to secure a 500 billion baht loan to finance the handouts and is slated to submit a related bill during the parliamentary session starting later this month.


The digital wallet scheme is reminiscent of the populist policies of Thaksin Shinawatra, who served as prime minister between 2001 and 2006, experts said. Pheu Thai is the third incarnation of a political party founded by Thaksin.


Thaksin, who was ousted in a military coup in 2006, is serving an eight-year sentence for corruption and malfeasance after returning to Thailand in August from self-imposed exile.


Thaksin’s subsidy and welfare programs were popular in rural areas but raised concerns about the sustainability of state finances, the misuse of public funds and corruption.


Sirikanya Tansakun, deputy leader of the liberal opposition Move Forward party, has criticized the digital wallet scheme for lacking a revenue source, calling the government’s attempt to secure a loan for the program “a careless thought.”


The economy is not in a critical situation requiring a giveaway as the year-on-year increase in gross domestic product stood at 1.5 percent in the July-September quarter, Sirikanya said, adding the bill was unlikely to be passed by parliament.


But Thanavath Phonvichai, senior vice president for academic affairs and research at the University of the Thai Chamber of Commerce, said the digital money giveaway would help the economy to grow and was fairer than the measures implemented by Thaksin.


Thaksin’s government and that of his sister, Yingluck Shinawatra, who served as prime minister from 2011 to 2014, subsidized rice farmers and other agricultural producers.


“The digital wallet scheme is more efficient, transparent and effective” as it would help middle- and low-income earners while also stimulating the economy, Thanavath said.


But some observers believe the scheme is aimed at restoring the reputation of Pheu Thai after it formed the coalition government with pro-military parties, reversing its earlier stance. Some even suspect that Srettha is merely a puppet of Thaksin.


Thaksin returned to Thailand on Aug. 22 when Srettha, a former property tycoon with little political experience, was elected prime minister by parliament in a vote in which he was the sole candidate.


Although Move Forward won the May election, it was prevented from forming a government by military-appointed senators opposed to its pledge to amend stringent laws against insulting the monarchy.


Many opposition lawmakers said Thaksin’s return was related to the senators’ support for Srettha as a prime minister.


Yutthaporn said Srettha has the backing of Thaksin and some of his family members including Yingluck, a friend of Srettha since both were in the property business, and Thaksin’s youngest daughter Paetongtarn.


He doubts whether Srettha can make his own decisions, saying, “This government has been formed to restore the political status of the Pheu Thai Party after it was in opposition for nearly a decade and pave the way for Paetongtarn to become the next prime minister after Srettha.”


Besides the digital wallet scheme, Srettha has been promoting tourism, a key economic growth driver, by extending the validity of tourist visas for Russian citizens, in contrast with European countries that have restricted the entry of Russians due to Moscow’s war against Ukraine.


Acting as Thailand’s chief salesman, Srettha has encouraged foreign tourism and investment in the country during his recent trips overseas, including to China and the United States.


Yutthaporn said Srettha appeared to have made a good start by promoting Thailand in numerous meetings with businesspeople abroad and making some deals for foreign investment during his trips.


Regarding the passage of the digital wallet bill, many senators and lower house members have voiced concern about the resulting financial burden on future generations.


If Srettha succeeds in convincing parliament and passing the bill, the businessman-turned-politician could solidify his leadership, getting rid of the shadow of the Thaksin family, Thai politics observers said.

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