Regime pledges to boost local budget

Regime pledges to boost local budget

Small regions to 'drive economic growth'

Deputy Prime Minister Somkid Jatusripitak, seen here making a speech last month, has ordered a new programme to emphasise local development as the means to stimulate the economy. (File photo by Somchai Poomlard)
Deputy Prime Minister Somkid Jatusripitak, seen here making a speech last month, has ordered a new programme to emphasise local development as the means to stimulate the economy. (File photo by Somchai Poomlard)

The government has pledged to double its planned budget for 18 provincial clusters to 40 billion baht as it aims to deploy local development to stimulate the economy.

Deputy Prime Minister Somkid Jatusripitak, who is in charge of economic affairs, said local areas would become the main drivers of the economy, much like in China.

There is no need for the regions to wait for directives from central authorities, he said.

Mr Somkid was speaking at an annual seminar of the Thai Chamber of Commerce (TCC) in Ayutthaya.

The three-day event wrapped up Sunday.

The government will try to seek larger budgets for the development of these provincial clusters as a step towards Thailand 4.0 -- an economic development model focused on digital economy and high technology.

The provinces will be the key machines moving the economy forward, he said.

Efforts will be made to prevent a financial boost in the provinces from affecting their fiscal status, he said, adding the ratio of the country's public debt to gross domestic product (GDP) must not exceed 45%.

The ratio stands at 42% now.

The government has set aside 20 billion baht in the 2017 fiscal budget for the provincial clusters, and efforts will be made to increase it to 40 billion baht, Mr Somkid said.

The administration will collect all of the money left unused in projects worth more than one billion baht in the 2016 fiscal year and use it to finance small projects in provincial clusters, he said.

Efforts will be made to seek more money in the 2018 fiscal budget under the next government to support further development of the clusters, he said.

The regime will give one or two months for provincial governors to talk to local business operators and universities and work out what should be done in their provinces, the deputy premier said.

Mr Somkid said Thailand, where exports account for 70% of the GDP, can no longer depend on the health of the overseas economy and this is a weak point in its own economy.

"The government is gearing towards the development of the eastern economic corridor, which should bring the existing eastern seaboard development to a higher level and make it a driving force for the domestic economy," Mr Somkid said.

It also aims to develop ports to serve trade and investment with Cambodia, Laos, Myanmar and Vietnam (CLMV) as well as open channels through which goods from the CLMV will be delivered to global markets, he added.

As for concerns about the economic impact under US President-elect Donald Trump, who leans towards protectionism, Mr Somkid said Europe is likely to feel the pinch more than others.

Asia meanwhile will be on the rise, he said, adding China and the US cannot leave CLMV countries who are their key source of raw materials, he noted.

He also insisted the Thai economy would grow more than 3% this year, despite a small drop in economic growth in the final quarter.

The deputy premier brushed aside concerns over the falling numbers of Chinese tourists after the government stepped up efforts to clamp down on the zero-dollar tour operations, saying the Chinese market is quick to adjust.

Deputy Commerce Minister Suvit Maesincee said the country's business model must be modified under the "Thailand 4.0" concept with focus on value-added goods and services.

Saowanee Thairungroj, rector of the University of the Thai Chamber of Commerce, said the university has revised the economic growth this year from 3.3% to 3.2%. He said exports are projected to fall 0.4% while inflation is expected to climb 0.2%.

The economy is forecast to grow 3.6% next year on the back of the expected 1.4% growth in exports, estimated to be worth US$214 billion (about 7.6 trillion baht), she said.

"The key elements supporting the 3.2% GDP growth this year are the private sector's spending and the continued rise of state investment as well as improvement of crop prices," Ms Saowanee said.

She said the government's cash handouts for low-income earners would help lift the GDP by 40 billion baht, while the daily minimum wage hikes would increase the GDP by 45 billion baht.

She said these measures would be a boon for the economy from late this year to next year.

Do you like the content of this article?
COMMENT (2)