Stimulus plan under fire - will it work?

[Socrates]

Stimulus plan under fire
Top economists say it'll do little to spur the economy

By: Post Reporters
Published: 15/01/2009 at 12:00 AM

Top economists have given the thumbs down to the government's 115-billion-baht supplementary spending budget, saying it is designed to woo votes rather than prop up the sagging economy.

I cannot imagine how the government came up with such a plan. I do not want to say that I cannot believe this is from an Oxford or Cambridge graduate. PRIDIYATHORN DEVAKULA FORMER FINANCE MINISTER
Of 18 projects to be implemented in mid-March, a scheme to grant a one-off 2,000-baht allowance to eight million employees under the Social Security Fund and 1.4 million civil servants making less than 15,000 baht per month came under the most fire yesterday.

Former finance minister MR Pridiyathorn Devakula said the 2,000-baht grant scheme had caught him off guard.

"I cannot imagine how the government came up with such a plan. I do not want to say that I cannot believe this is from an Oxford or Cambridge graduate," he said of some cabinet members with backgrounds at prestigious British universities, including Finance Minister Korn Chatikavanij and Prime Minister Abhisit Vejjajiva.

"I am baffled. The 18 billion [earmarked for this scheme] will just disappear. It will not stimulate the economy because it is a one-time payment," he said.

"I think paying people 2,000 baht per head is to lure votes," he said.

He said of the total budget, only seven billion baht would be spent creating jobs.

MR Pridiyathorn also criticised the six-billion-baht skills training scheme aimed at creating new entrepreneurs, saying that at a time when the economy had slowed and purchasing power was limited, it was a bad idea to encourage small-scale operators to invest as there was a high risk of their businesses going under.

"It is like leading them to bankruptcy. I could not believe the government would be so silly. It is utterly silly," he said.

The most effective channel to spur the economy was to inject the money through tambon administrative organisations (TAOs).

But he complimented the Finance Ministry's decision not to cut corporate taxes from 30% to 25%, saying it was unlikely the businesses would use the money to invest.

Sauwanee Thairungroj, vice-rector of the Thai Chamber of Commerce University, said the 2,000-baht grant project would target the wrong groups.

She said the unemployed and those below the poverty line would not benefit.

Sakon Varanyuwatana, vice dean of the economics faculty at Thammasat University, said the economic stimulus package was a disappointment as it should have focused more on measures which would strengthen the economy over the longer term.

Direk Patmasiriwat, another Thammasat economist, said he disagreed with free water and electricity and cuts in petrol taxes, as the measures would give consumers the "wrong incentives". He also doubted whether the schemes would benefit the people in real need.

Lae Dilokvidhayarat, a Chulalongkorn University economist, said the government should have paid more attention to employees or sub-contract workers made redundant as they were directly affected by the economic slowdown.

Worawit Charoenlert, of Chiang Mai University, said the grant scheme was a charity fund and it could be used up in a few days.

"It will not stimulate the economy, but it will affect the tax system. The government will have to raise taxes to make up for the lost money," he said.

Prime Minister Abhisit defended the scheme, saying it was not a one-time payment as some were saying.

He said the scheme was in response to the Thailand Development Research Institute's suggestion that the government help employees contribute to the Social Security Fund and the 2,000-baht grant could be used to contribute to the fund. The grant would also reach people faster.

"The measures we are about to implement can be evaluated. We will see if domestic spending will increase or not," he said.

He also denied reports that 60% of the economic stimulus package funds were diverted to Democrat-controlled ministries and had disappointed coalition partners.

How’s this for an economical stimulus plan?

Anybody agree with me that this is the most expensive vote buying scheme ever invented? Its impact on turning the economic turn down can be expected at a low point and that most of the money will end up in the pockets of the military and political establishment.

Socrates

[pachangamac042]

Socrates, you new in Thai politics? That is the way the democrats or better call them right wingers have always been governing this country. Why you think that they could not agree with Dr Thaksin’s more socialistic politics?

And for your notes, it is not called vote buying when the democrats buy votes, it is called stimulus package. Sounds much better, doesn’t it? It stimulates sweet boy Mark, have you not seen his picture on today’s BP. He seems very stimulated, like somebody stimulated him up his back side.

[Just-1-Voice]

Let's face it, Abhist has the best government money can buy.

[stilljustbrowsing]

If they get the 30% voted, 70% selected government for the future, then his "stimulous package" has been well directed.
"Do as I say" (I know best) seems to be the watchword!

[Socrates]

Socrates, you new in Thai politics? ...

Pach, got your point. Just trying to state the obvious by using a little naivety and start a debate. And in retrospect the topic should have been named “Stimulus plan under fire – how many votes is it possible to buy?”
By the amount of money they’re putting together, it looks as if they’re literally trying to buy the lot down to the most remote village!

[pachangamac042]

Socrates, what about using Euros or US dollars, if Thai Bath no good? Nothing better you could get? How much for Dr T?

And hey, the demos can buy as much votes as they want, because they do not buy them, they only invest in the future of the country.

[Just-1-Voice]

Ok, while we can all make jokes about this, and I’ve done my share in that respect, let’s take a moment and look at it realistically.

1) The Demos blasted “Thaksinomics” every chance they got, saying it was a “waste of taxpayers money.” But then the Demos come to power and not only do they fully endorse the same populace policies, in many cases they plan to double the amounts. Hypocrisy at it’s finest.

2) Thaksin, the TRT & PPP were accused time and again of “vote buying”, despite the fact that, as I said in a previous post, not one single case of vote buying has ever been documented or proven. Abhist’s “stimulus package” is nothing more than a BLATANT case of vote buying on a national level.

3) If the Bangkok rich and Elite didn’t like Thaksin for his “populace policies”, I have a feeling they are going to like Abhist even less for continuing and doubling them, and are now starting to question themselves in regards to their support of him and the Democrats, especially those smart enough to figure out that it is their tax dollars that are paying for all of this.

4) I have a feeling that the Red Shirts won’t have to worry about driving Abhist out, as the elites and middle class are going to become totally infuriated with what their “Golden Boy” is doing and take their own steps to have him removed.

All in all, when you factor in a few other things, the Demo’s victory could be short lived and bitter sweet.

[stilljustbrowsing]

The term "easy come, easy go" springs to mind, people that can be bought will sell themselves to the highest bidder for short term gain.
As has been stated on many occasions by many people, education is the key. However, the education must be genuine, librally based and not biased in one particular direction.
History is written by the victors.
People are taught what the "teachers" think they should know! (based on what the teachers have learnt and the "national curriculum")
Some teachers have, essentially, never left school.

[Voice]

Hello everyone, I don’t think it will work either for 2000baht handout to stimulate our economy and like the reporter said it almost like vote buying.

To create jobs the government should first know what our country is capable of. Agriculture products have brought most of our income from export and tourism that is what this government should be aiming for. As for another industries like manufactory we have to rely on outside investment to complete with the rest of the third world countries. Since last year we have lost most of those investment through our political crisis and the financial situation that the whole world is facing today. PAD has brought our country bad reputation and the new government hasn’t got any plan or ideas of how to solving our crisis as far as I can see.

[stilljustbrowsing]

Creation of jobs is a fallacy. Jobs should,and can realistically, only exist where there is a requirement. To suggest, or try to do otherwise is self defeating.