SHADOW BOXING
Korn Chatikavanij
Shadow ministers suffer many disadvantages compared with their illustrious counterparts. We do not have ministries full of civil servants on call nor do we have the same level of access to information. Most importantly, we do not have the chance to focus in the same way. A minister is expected to, well, ad-minister. A shadow minister however, with already fewer tools at his disposal, must not only focus on policy issues related to his portfolio, but is forced to retain a vigorous role of scrutiny over the affairs related to his ministry.
The art is to get the balance right. The public generally wants to hear us offer alternative policy solutions, and this is largely what will determine whether we receive the votes come election time.
A problem is that the public usually does not credit the idea, only its implementation. That's another disadvantage the shadow ministers have.
Who amongst you recall that it was the Democrats who first talked about discounted electricity and water for the poor? At another level, even Prime Minister Somchai Wongsawat was claiming that regional financial cooperation, initiated through the "Chiang Mai Initiative" was a Thaksin idea. In fact, it was signed by the Democrat government a full year before Thaksin took office.
The role of scrutiny can be even more thankless (even if you do manage to "scru" your target!), but is a necessary part of the role of the shadow minister. This is particularly the case in Thailand, where abuse of power and corruption is rife and are genuine threats to society. Moreover, some abuses are so glaring that they cannot, in good conscience, be ignored.
Over the past two weeks, I have been busy in both the policy and the scrutiny roles. The Thai economy is already suffering from the impact of the global financial crisis. Ours is such an "open" economy that the government's earlier claims that we're immune from any impact was always at best wishful thinking. The problem was that all their focus was on the potential financial impact, whilst the real problem for Thailand was always going to be the effect on the real economy.
The government was thus caught off-guard by the impact on commodity prices, especially the prices of our key crops of rice, tapioca, rubber, palm oil and corn. More importantly, the decline in the prices of these products have a direct and immediate impact on our rural poor, a constituency already most vulnerable.
So, while initial policy response concentrated on measures to (unsuccessfully) prop up the stock market, the government was - and still is - slow in responding to a more pressing need.
A walkout by MPs in Parliament was required to prompt a corn price guarantee scheme to be launched and the cabinet also endorsed a new rice price guarantee certain to cause further substantial losses. Actually, I do not have a principled objection to policy designed to subsidise income levels for farmers. The problem, however, is that the government refuses to acknowledge the subsidy for what it is. This means there is no provision made in the budget and it means the government ends up with a huge stockpile of products it dares not sell - for fear of registering losses.
This means that on top of the 2.1 million tonnes they should have sold when the world price of rice reached US$1,000 a tonne earlier this year, they now have more than double that amount in stock, with much more to come from the new scheme recently implemented.
Meanwhile, Vietnam, sensing continued pricing pressure not least because of the eventual release of Thai stock, has recently off-loaded their rice for as low as US$350 per tonne.
Poorly planned subsidy programmes also lead to fraud on a grand scale. The fact that it is the middleman who benefits most from the high government price is well documented. Now there is concern that traders will be selling cheap non-Thai corn from across the border to the government at the much higher guaranteed price!
Away from agriculture, there is increasing concern on the industrial and commercial segments of the real economy. The Board of Industry warns that there could be more than 1 million lay-offs next year and SMEs are particularly vulnerable.
The government announced that they would seek to increase commercial bank lending by 400 billion baht next year. Sounds good - until one is reminded that current bank loans outstanding are almost 8 trillion baht, so this would amount to a mere 5% increase in bank assets. That is below existing commercial targets as it is.
Moreover, it was unfortunate that, in his haste to be seen to be doing something, Minister Suchart rushed to extend comprehensive deposit guarantee for three years and lost the opportunity to negotiate something in return from the banks, who are clear beneficiaries of this policy.
Current bank loan/deposit spreads are over 5% - the highest in the region. There could have been a quid pro quo on spreads as well as on increasing credits to SMEs in particular.
Instead, the minister is talking about merging the government-owned SME bank with the Credit Guarantee Corporation (CGC). This is not an optimum idea. The CGC is a tool for all commercial banks, and limiting it to just the SME bank does not make sense. The SME bank also needs to show that it can operate more efficiently without the catastrophic NPL levels of the past. Better to promote increased risk sharing with the commercial banks in order to stimulate loans while ensuring a level of good practice.
Domestic tourism is also clearly key - since much of the smaller SMEs and Otop products depend on this. With inbound tourism bound to suffer because of global problems, the government needs to be imaginative and committed to boosting domestic travel.
As for my scrutiny role, I am still pressing Minister Suchart to tell us what he will do with the Bank of Thailand now that the Ombudsman has ruled the MoF-sponsored BoT board to be illegal.
More bitterly, and (sadly) as expected, there is an ongoing dog-fight between Thaksin and myself, on what I believe to be the main event in terms of his economic crimes: the alleged fraud, money laundering, false disclosure and stock manipulation activities that are all rolled into what is known as the Winmark/SC Asset case.
I have filed complaints against the Office of the Attorney-General at the National Counter Corruption Commission and will do the same against the Department of Special Investigations this week. Both agencies are, in my opinion, intentionally neglecting to do their proper duty in a most blatant way. It made me wonder, why is it that there are still so many people ready to do what is clearly wrong in order to protect Thaksin? I guess they must have real faith in his "Red Army".
As for me, I have been warned not to mess with the OAG or the police.
Well, I'm being forced to take on both. Personally, I still believe that, in the end, justice will be served. If not, there is no chance for Thailand, and in that case, what happens to me is the least of our problems.
Being a shadow is a challenge and as long as we remain in the Opposition, we will continue to be fully committed to the role.
Korn Chatikavanij is deputy leader of the Democrat party.
Email: Korn.chatikavanij@gmail.com
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