SHADOW BOXING
KORN CHATIKAVANIJ
What a week that was! I was pleasantly handing out awards to school children in Klong Toey when a call came through from party leader Abhisit Vejjajiva with a characteristically to-the-point question: "Heard the news?"
Thoughts flashed through my mind - "Coup? Samak resigned? House dissolved?" The questions themselves reflect the national state of affairs, where anything could happen.
"They've agreed to table the no-confidence motion - in three days' time."
I quickly handed out the last award, to an impossibly skinny kid who was part of the winning tug-of-war competition, and off I went back home. I put away my preparation for the budget debate and immediately started to work on the "no confidence".
Politics was heading to a dead-end we Thais have become all too familiar with - and we were hoping that bringing the conflict into Parliament would help ease tensions.
We also felt that the government was veering dangerously towards the wrong direction and hopefully the debate would lead to changes that would allow for some semblance of order.
Up to the point of Khun Abhisit's telephone call we, and the Senators who had filed a separate motion, were being shunned by the government and hence feeling increasingly frustrated. Whilst the change of heart on the part of the government was a surprise, it was also welcome.
This debate was always going to be different. Previous no-confidence debates were ones that involved exposure of specific cases of corruption. Our lack of confidence in this government, however, had more to do with their complete neglect in the management of the economy. Crucially, we were also specifically worried about the cabinet resolution approving the agreement the Foreign Ministry had signed together with Cambodia regarding the request by the Cambodian government to file Khao Phra Viharn as a World Heritage Site.
The way the approval was requested has probable implications to our territorial and sovereignty claims over the temple and surrounding area. Furthermore, there were at least circumstantial reasons for us to believe that the Foreign Minister's decision-making could have had something to do with his previous role in serving Thaksin Shinawatra's personal interests.
Mr Thaksin is openly seeking business opportunities in Cambodia and the inexplicable position the Thai government has taken can only be understood in the context of collusion or utter incompetence.
The key now is how to backtrack away from the joint communique signed by Noppadon Pattama and supported by a cabinet resolution. We are in the process of seeking legal recourse, which hopefully will lead to the prevention of a possible loss of sovereignty.
It is a strange feeling for a public servant to actually be in defence of national territory - it all seems surreal and yet the implication of the government's action is real enough and, personally, I believe that if they remain intransigent, they will not be able to survive.
The main thrust of our debate has been widely covered by the media and we will almost certainly be seeing new ministers of commerce and foreign affairs. We should also see a new transport minister, given the shameful revelation regarding his examination fraud.
The debate result may not satisfy the hardcore opposition of the government - but at least there is now much greater awareness of the government's failings.
Personally, I do hope that the government uses the breathing space to get its act together in the management of the economy. It was also interesting that over 50% of respondents in a Bangkok poll subsequent to the debate gave the government the thumbs down. I believe the government cannot afford to continue on the course of the past four months.
Three days of tough no-confidence debate were followed by two days of budget debate. This year's budget is once again one with a large deficit - 250,000 million baht or 2.5% of GDP. There was vigorous debate on the flaws in the numbers presented. Thailand is being squeezed by low government income relative to expenses, especially fixed expenses such as salaries. This year's budget has only just over 400,000 million baht allocated for investments, or 22% of the budget, a decline from 24% in the current budget. In absolute terms, there is also a decline once inflation is taken into account.
So, whilst everyone is in agreement that our economy needs investment, the government itself is running short of funds. This is of particular concern because there is the implication that we will need to maintain a budget deficit in the foreseeable future if the government is going to maintain its share of investments that are needed.
It also means that we will need to create the right conditions for the private sector to fill the gap. The good news is that, broadly speaking, overall investment levels in the Thai economy remain robust. Combined government, state enterprise and private sector total investment is equivalent to 26% of GDP.
The problem, of course, is that money is not always used wisely. From my private-sector experience, I can conclude that the entire presentation of the budget needs a desperate overhaul. There needs to be a clear aggregation of funds clearly defined by functions (for example, water management), rather than by ministries (there are at least four ministries through which funds are allocated towards irrigation).
Moreover, major investment policies as advertised by the government are not covered by the budget as presented. Explanation to the effect that funds will be "off budget" in terms of loans, simply does not fly. As it is, the loan servicing burden on the budget is equivalent to almost the entire deficit, and whilst it is true that there remains room for further additional public borrowing, this would not be enough to finance all the projects which the government has promised.
This leads to a lack of credibility in terms of what is real - and that itself will lead to reduced overall confidence.
What we need to do is to be disciplined in agreeing on what our national priorities should be and what funds are actually available - common sense stuff, but it is not yet being done.
Priorities for Thailand can perhaps be broken into three categories: human capital, infrastructure and the environment. Every baht that is spent needs to address these three challenges - or arguably not spent at all. Priorities within these categories need to be properly set - shall we invest in double-tracking the rail network first, or should we invest in irrigating farmland?
It will not always be an either/or question, though the point is that we don't have sufficient funds to do everything, and certainly not at the same time.
Unfortunately, politicians feel compelled to campaign as if there are no limitations.
The fist reading of the Budget Bill having been passed, the next 12 weeks will see the ad hoc budget committee hard at work hammering out the details. I am on this committee and it promises to consume my life for the entire period, 9am to 9pm every day.
I've said my goodbyes to my family and if you live in my constituency in Bangkok, please excuse me if I am not seen around the place through till September!
The writer is Shadow Finance Minister.
Email: korn.chatikavanij@gmail.com
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