Agricultural reform is a key element of the Democrat party's platform, which favours building up efficiency and productivity without taking on additional debt

Story by CHIRATAS NIVATPUMIN and WORANUJ MANEERUNGSEE

Balanced economic growth and fair income distribution represents the heart of the Democrat party's economic policy.

It's a philosophy that Democrat leaders say is completely opposite to that of the incumbent Thai Rak Thai party, which has helped fuel growth over the past several years by encouraging consumer spending funded by rising household debt.

"We see our thinking as completely different from the government. Under Thai Rak Thai, growth has come with higher debt, while the income gap has widened steadily," says Kiat Sittheeamorn, a key member of the party's economic policy team.

Mr Kiat, formerly the president of the International Chamber of Commerce in Thailand, is no stranger to politics, having once served as an economic adviser to former premier Chuan Leekpai.

But he recently agreed to join the party full-time to help the Democrats contest the upcoming general election, and chairs the party's working group on trade and consumer protection policy.

"Our basic policy isn't to give a person a fish, or to teach them how to catch a fish. Rather, we want to teach people how to raise and farm fish, to develop sustainable growth for the long term," Mr Kiat said.

Agricultural reform is a key element of the Democrat party's platform, focusing on a holistic approach to building up efficiency, productivity and ultimately, profits, for farmers.

"We don't support allowing people to take on additional debt that doesn't lead to growth and revenues," Mr Kiat said.

"The problem in Thailand isn't just capital. In agriculture, money is just one constraint. The real problems are with yield management, land ownership, technology, water resources, marketing. We need to have a clear plan."

The Democrats have promised to offer revenue guarantees of 5,000 baht per month for farmers participating in its pilot initiatives. Community farm organisations would be established to help build self-sufficient networks and share financial and technical resources.

Competitiveness policies would focus on spurring innovation and increasing funds spent on research and development, with a target of annual spending of 1% of gross domestic product within four years.

Improved labour skills and education systems were crucial for long-term success.

"The answer to the problems faced by low-wage labourers isn't to raise the minimum wage," Mr Kiat said.

"Wages follow skills. We need to improve job skills and standards, to help raise the bar for the labour force."

Other initiatives include pushing for a corporate tax cut to 25% from 30% now within four years, developing new special economic zones to promote the growth of industry and services, and strengthening the country's logistics infrastructure.

"Unit costs in Thailand are high because of inefficiency. Some 90% of goods are shipped by truck, compared with 90% by rail in Europe," Mr Kiat said.

"We need to expand the national rail network, lay double-track throughout and build up feeder lines that connect throughout the Indochina region."

Bilateral free-trade agreements, a hallmark of the Thai Rak Thai international trade policy, would be reviewed by a Democrat-led government to ensure that affected domestic industries were given time _ and resources _ to adjust to increased competition.

Mr Kiat said a new retail law would also be put in place to ensure fair competition and strengthen consumer protection.

"The retail sector remains dominated by unfair contracts, no regulations on operating hours or branches. A retail law is needed to ensure fair competition," he said.

The country's bankruptcy regime also needs to be changed, in which cash flow, not just solvency, is considered in the rehabilitation process.

Mr Kiat said the Democrat party also favoured state enterprise privatisation, but not for basic utilities such as transport or power.

Such a stance also supports the basic constitution, considering that public infrastructure such as dams and roads often are based on properties seized through eminent domain and as a result, should remain in the hands of the state.

State enterprises, in some cases, also need to be maintained to ensure that services are available even in areas where such investments might not be purely economic.

"The problem with privatisation is that private companies won't invest in the areas where returns aren't forthcoming," he said.

Thai Rak Thai's privatisation model lacks demand-side management, and threatens the country's economic security and stability, Mr Kiat said. Regulatory bodies need to be established before privatisation, to ensure that competition remains fair.

Even so, Mr Kiat insisted that the Democrat party's economic platform was pro-market and favoured a limited interventionist role for the state.

"What the private sector can do, the government should not. The role of the state is to focus on regulation, not in interfering in the allocation of economic resources," he said.

To do otherwise only raised the potential for conflicts of interest and undermined public governance.

"The economics sphere has to be separate from the political sphere," he said.