ECONOMY
VICHAYA PITSUWAN
Thailand's economy is in a transition stage where the agricultural sector will eventually replace the industrial sector as its main driver, according to M.R. Pridiyathorn Devakula.
The former finance minister and ex-Bank of Thailand governor said at a dinner hosted by the International Chamber of Commerce on Thursday that the change in Thai economy will become clearer over the next four to five years when more economic value will be generated by the farm sector than the industrial sector.
''The Thai economy, which has been spurred by industries manufacturing for the export market over decades, is about to change,'' M.R. Pridiyathorn said, citing the recent surge in global farm commodity prices.
''There is no period recorded in Thai history where the prices of five major crops, which are rice, sugar cane, tapioca, rubber and palm oil, have risen so dramatically all at once,'' he said.
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| Pridiyathorn: Govt policy always wrong |
M.R. Pridiyathorn predicted that crop prices will remain high in the future due to the food crisis, more investments in the farm sector and the continued search for alternative fuels such as biofuel.
''When farmers who are the majority of the population in this country earn more, they are capable of consuming more, so domestic consumption will increase,'' M.R. Pridiyathorn said, adding that the rise in farm income will also reduce income disparities.
''Amid a time like this when the global economy is in a downturn from inflationary pressure, the food crisis and high oil prices, domestic consumption will help sustain the Thai economy,'' he said.
However, proper management by the government needs to be implemented to sustain the growth of the farm industry in the future, he said.
But M.R. Pridiyathorn suggested to chamber members that they not rely on government spending to spur growth, citing the inadequacies of the current government. In the first quarter, government spending came to only 0.1% of the investment value in Thailand and that was very low, he said.
''The government needs to start doing some work and I don't know why whatever the commerce minister [Mingkwan Sangsuwan] does is always wrong,'' M.R. Pridiyathorn said.
M.R. Pridiyathorn said he had no doubt Thailand would overcome the oil crisis in the long run, but added that the question was how the country would survive over the short run.
''I see the current political situation as a mess and I don't see a way out,'' M.R. Pridiyathorn said.
He said that even amid the political turmoil, the country's gross domestic product still grew at 5.9% in the first half of this year. This showed that the Thai economy's fundamentals remained strong.
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