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From rice purchases to minimum wages to government handouts, clear long-term plans for the future being replaced by short-term election promises.

Photo above from left at the seminar are: M.R. Pridiyadhorn Devakula, a former deputy prime minister and finance minister; TDRI president Niphon Poapongsakorn; Panupong Nitiprapa, an economist from Thammasat University; Supavud Saicheua, the managing director of Phatra Securities; and Veerathai Santiprabhob, the Stock Exchange of Thailand’s chief strategist. (Photo: Pattarachai Peechapanich).

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ECONOMY

Economists slam government policies

25/07/2012
Parista Yuthamanop

Leading economists expressed concern the government's paddy mortgage project is ineffective in addressing the wealth gap and is leading to significant losses of fiscal resources.

They said the government should stop its market intervention measures as well as the minimum wage increase, tax waivers for home and car buyers and debt suspension.

Niphon Poapongsakorn, president of the Thailand Development Research Institute, said the government's 15,000-baht-per-tonne paddy mortgage project, which is well above market value, has resulted in 18 million tonnes stored in warehouses the state is finding hard to unload.

If the government sells the huge stocks domestically, it will dampen market prices and incur even deeper losses. If it fails to sell the rice, then all the money spent on pledging will become fiscal liabilities and millers will have little space for paddy in future seasons.

The market price of milled rice is US$600 a tonne, making it impossible to sell Thai rice at its pledged price $800 per tonne of paddy. Meanwhile, only 1 million out of 3.8 million farming households nationwide are capable of producing paddy in excess of their own consumption in order to pledge, said Dr Niphon.

"Small-scale farmers have not benefited from the paddy pledging programme. Some of them have come to realise they've been misled, thinking they would be eligible for the programme," he said.

Dr Niphon said local exporters may be able to deliver their orders from tapping their old stocks or those of neighbouring countries. He called for government disclosure of paddy stock auctions for examination of corruption.

Assoc Prof Panupong Nitiprapa, dean of Thammasat University's economics faculty, said boosting the daily minimum wage to 300 baht spoke to the reduction of the wealth gap, as wages excluding inflation have regressed over the past two decades.

However, he said people should understand the state should have less influence in setting wages going forward.

Supavud Saicheua, the managing director of Phatra Securities, said the government is wrong to create economic policies based on the perception that it should intervene in the market to boost economic growth and reallocate wealth.

"It seems the government would like the economy to take off as a plane by starting all engines with a hands-on approach," he said.

It hoped when it bought up the rice supply that foreign buyers would flood us with orders, as global supply was squeezed. But only 30 million tonnes of rice are now traded in the world market compared with total production of 400 million tonnes. No one wants to buy the rice.

The government's hope that the corporate income tax reduction would help firms deal with the daily minimum wage hike was impractical, as small firms' profits usually do not reach the level where they would benefit from the tax cut, said Dr Supavud.

He added that the government should ensure the 2.2-trillion-baht investment in improving infrastructure and 350-billion-baht flood prevention system will generate sound economic returns and that implementation moves forward as planned.

Veerathai Santiprabhob, the Stock Exchange of Thailand's chief strategist, said the government is delivering election campaign promises without charting any clear course for the future of the economy.

Fiscal liabilities incurred from state projects have been hidden in specialised financial institutions, allowing stable public debt. The debt and growing needs for social welfare compensation could snowball into fiscal problem, he said.

(Source: Bangkok Post, ECONOMY, Economists slam government policies, 25/07/2012, Parista Yuthamanop, link) 

 
Economic Policy Vocabulary

slam - to criticize strongly (describe how bad something is and how it should be changed)   วิพากษ์วิจารณ์อย่างรุนแรง วิพากษ์วิจารณ์
slam policies

economists slam government policies

concern - a worry ความกังวล
expressed concern

paddy - rice after it has been harvested from the field  ข้าวเปลือก
government's paddy mortgage project

ineffective - does not work well, does not produce intended results

wealth - how much money and assets a person or country owns

gap - a large difference between people or groups ช่องว่าง
wealth gap - the difference in wealth between the poor and rich

address a problem - work at solving a problem
addressing the wealth gap

fiscal - related to government spending; connected with the government budget, i.e., public money เกี่ยวกับงบประมาณ

resources - things such as money, workers and equipment needed for a person or organisation to function properly ทรัพยากร ทรัพยากรที่มีอยู่
fiscal resources - money, materials and people that the government has available to use

significant - large enough to be important or have an effect ที่สำคัญยิ่ง
significant losses of fiscal resources

Leading economists expressed concern the government's paddy mortgage project is ineffective in addressing the wealth gap and is leading to significant losses of fiscal resources.

intervention - becoming involved in a situation and trying to change it การแทรกแซง
measures - actions taken to deal with a problem มาตราการ

market intervention measures

wage - an amount of money that you earn for working, usually according to how many hours or days you work each week or month ค่าจ้าง
daily minimum wage
minimum wage increase

waiver - when you are given permission to not do something or not pay some amount of money
tax waiver - when you are given permission to not pay some taxes
tax waivers for home and car buyers

debt - an amount of money that you owe หนี้
suspension - stopping for a period of time (temporarily)
debt suspension - when borrowers don't have to pay back their loans for a period of time 

They said the government should stop its market intervention measures as well as the minimum wage increase, tax waivers for home and car buyers and debt suspension.

above market value - more than the true value of something (the price people are willing to pay for it in a market)
warehouses - large buildings to store goods in

state - government รัฐ
finding hard to unload - difficult for them to sell these goods

Niphon Poapongsakorn, president of the Thailand Development Research Institute, said the government's 15,000-baht-per-tonne paddy mortgage project, which is well above market value, has resulted in 18 million tonnes stored in warehouses the state is finding hard to unload.

stocks - amounts stored for future use
stocks - large amounts stored for future use
sells the huge stocks domestically

dampen - decrease and make less, reduce   ทำให้หดหู่
dampen market prices

incur a loss
incur even deeper losses

all the money spent on pledging will become fiscal liabilities

rice miller - a company that prepares rice to be sold in bags
space for - a place to put and store something (example: the warehouse is full and has no more space to store rice)

millers will have little space for paddy

If the government sells the huge stocks domestically, it will dampen market prices and incur even deeper losses. If it fails to sell the rice, then all the money spent on pledging will become fiscal liabilities and millers will have little space for paddy in future seasons.

pledge - 1. promise as collateral (in the government rice price support system); 2. to make a serious promise to do something สัญญา seriously promised to do something สาบาน

rice pledging scheme - the government system of making sure that farmers get a good price for their rice
pledged price - the price that farmers get for their rice from the government

households - families or groups of people living together (economics treats this as a unit that makes decisions)
nationwide - throughout a whole country ทั่วทั้งประเทศ
3.8 million farming households nationwide

excess - greater than is usual; too much of something มากเกินปริมาณที่พอดี
in excess of - more than

consumption - 1. using, eating or drinking something;  2. when households buy goods and services (See Wikipedia) การบริโภค
in excess of their own consumption - more than than they use and eat themselves

capable - able to do something มีความสามารถ
capable of producing paddy in excess of their own consumption in order to pledge

The market price of milled rice is US$600 a tonne, making it impossible to sell Thai rice at its pledged price $800 per tonne of paddy. Meanwhile, only 1 million out of 3.8 million farming households nationwide are capable of producing paddy in excess of their own consumption in order to pledge, said Dr Niphon.

scale - size (relative size)
small-scale - smaller (than others)
small-scale farmers - small farmers (smaller than others)

realise - to know about; to understand ตระหนัก รู้
come to realise - to come to know about; to reach a point where you understand

misled - lied to, told something that was not true

come to realise they've been misled

eligible - meet the conditions and requirements needed for doing something ซึ่งมีคุณสมบัติเหมาะสม มีสิทธิ มีสิทธิชอบธรรมตามกฎหมาย เอื้อด้วยกฎหมาย ที่มีคุณสมบัติพร้อม
eligible for the programme

"Small-scale farmers have not benefited from the paddy pledging programme. Some of them have come to realise they've been misled, thinking they would be eligible for the programme," he said.

local exporters - exporters in this country

tap - use
stocks - goods that they have (that are being stored for future use or sale)
old stocks - goods they have had for a long time (that have been in storage for a long time)

tapping their old stocks - use the goods that have been in storage for a long time

deliver their orders from tapping their old stocks

stock - an amount of something that you keep so that you can use it when you need it ที่เก็บไว้ในสต๊อก
paddy stock - rice that is stored (for future use or sale)

disclosure - making facts known to the public
disclosure of paddy stock auctions for examination of corruption

Dr Niphon said local exporters may be able to deliver their orders from tapping their old stocks or those of neighbouring countries. He called for government disclosure of paddy stock auctions for examination of corruption.

dean - a senior official at a college or university อธิการบดี

faculty - a group of departments in a college which specialize in a particular subject or group of subjects คณะ
economics faculty - the department and all the teachers of economics at a university

boosting - increasing เพิ่ม
boosting the daily minimum wage

reduction of the wealth gap

wages - the amount of money earned per hour by a worker
inflation - the level of prices rising in the economy as a whole ภาวะเงินเฟ้อ

decades - periods of ten years เป็นสิบๆปี
wages excluding inflation have regressed over the past two decades

Assoc Prof Panupong Nitiprapa, dean of Thammasat University's economics faculty, said boosting the daily minimum wage to 300 baht spoke to the reduction of the wealth gap, as wages excluding inflation have regressed over the past two decades.

influence - affect what people do or think; to affect or change how someone or something develops, behaves or thinks อิทธิพล มีอิทธิพลต่อ, ชักจูง อำนาจบังคับ

going forward - in the future (from now)

However, he said people should understand the state should have less influence in setting wages going forward.

perception - the way people think about an issue or situation, the impression that people have of something การรับรู้

intervene - to become involved in a situation in order to try to stop or change it (in an activity you're not usually active in) แทรกแซง สอดแทรก
intervene in the market

boost - to increase; to strengthen เพิ่ม; ทำให้มีกำลังมากขึ้น
boost economic growth

allocate - divide and give something to many people; divide among many people 

re - again
reallocate - to allocate again, in a different way, changing who gets what

reallocate wealth - take the wealth or money in a society and change who has or owns it (example: reallocate wealth from rich to poor or from middle class to poor)

Supavud Saicheua, the managing director of Phatra Securities, said the government is wrong to create economic policies based on the perception that it should intervene in the market to boost economic growth and reallocate wealth.

take off - when an airplane leaves the ground at the start of a flight

approach - a way of doing something or thinking about something, of solving a problem or carrying out a task วิธีการทำให้ถึงจุดหมาย a way of doing or dealing with something การจัดการกับปัญหา

hands-on approach - when you get involved in solving a problem yourself (rather than giving it to someone else to solve, not "delegating" the responsibility)

"It seems the government would like the economy to take off as a plane by starting all engines with a hands-on approach," he said.

flood - a large amount or number of something จำนวนมาก
flood us with orders

global - throughout the world ทั่วโลก
global supply was squeezed - low supply around the world; little of the good available to be bought

traded - bought and sold ค้าขาย
traded in the world market - bought and sold in the world market

It hoped when it bought up the rice supply that foreign buyers would flood us with orders, as global supply was squeezed. But only 30 million tonnes of rice are now traded in the world market compared with total production of 400 million tonnes. No one wants to buy the rice.

income - money that people receive from work or some other source, used for household consumption and savings
income tax - a tax on income

corporate income tax
corporate income tax reduction

impractical - not practical; of something that cannot be done or used easily or effectively ซึ่งไม่มีประสิทธิภาพเมื่อนำมาใช้งานจริง,ที่ใช้งานไม่ได้ an idea that does not work in the real world, not practical ไม่เหมาะสมในทางปฏิบัติ

benefit - to get help or an advantage from something ผลประโยชน์
benefit from the tax cut

The government's hope that the corporate income tax reduction would help firms deal with the daily minimum wage hike was impractical, as small firms' profits usually do not reach the level where they would benefit from the tax cut, said Dr Supavud.

ensure - to make certain that something happens or is done รับรอง ให้ความมั่นใจ ให้การยืนยัน
investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
infrastructure - the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค

2.2-trillion-baht investment in improving infrastructure

prevention - the act of stopping bad things from happening or things that people do to stop them
flood prevention
flood prevention system

350-billion-baht flood prevention system

generate - create สร้าง กระตุ้นให้เิกิด to produce ก่อให้เกิด
sound - in good condition; healthy แข็งแรง

generate sound economic returns - make a good profit, make a lot of money

implementation - actually do or carry out a plan; making a plan into reality; execution of a plan, making sure that something that is planned actually gets done (See glossary) นำ (แผนการ) มาบังคับใช้

implementation moves forward as planned - actually do and achieve what you planned to do

He added that the government should ensure the 2.2-trillion-baht investment in improving infrastructure and 350-billion-baht flood prevention system will generate sound economic returns and that implementation moves forward as planned.

election - the process of choosing a person or a group of person for a position, especially by voting elect (v) electoral (adj) synonym: the polls การเลือกตั้ง
campaign - a planned series of activities designed to persuade voters to vote for a particular candidate or political party การรณรงค์หาสียง

election campaign promises - things that politicians promised voters to win their votes and get elected

delivering election campaign promises

charting - planning
clear - easy to understand
charting a clear course - making a clear and easy to understand plan

charting a clear course for the future of the economy

without charting any clear course for the future of the economy.

Veerathai Santiprabhob, the Stock Exchange of Thailand's chief strategist, said the government is delivering election campaign promises without charting any clear course for the future of the economy.

incur - do something so that you owe money to another person, or do something to lose money (examples: incur charges, incur costs, incur a debt, incur an expense, incur a loss, incur liabilities)

liabilities - debts; amounts of money that are owed by a company or a person หนี้สิน หนี้ขององค์กร money borrowed by a company (liabilities + owners' equity = assets)

incur fiscal liabilities
fiscal liabilities incurred from state projects

institutions - large and important organizations, such as universities or banks สถาบัน
financial institutions - banks and organizations like banks that loan money

specialised - working in a special narrow area of knowledge
specialised financial institutions - (Example: the BAAC is a bank that specializes in making loans to farmers)

public debt - money that the government owes (that the government has borrrowed to spend on projects)

stable - not changing suddenly or a lot, therefore predictable and easy to work with; not likely to suddenly become worse คงที่, มั่นคง ไม่เปลี่ยนแปลง
stable public debt

welfare - living in good conditions (with health, wealth, and happiness) - ความสะดวกสบาย, ความมีสุขภาพดี

compensation - 1. money or other benefits that an employee receives for the work that they do; 2. money paid to a person for damage they suffered การจ่า่ยเงินชดเชย

social welfare compensation  - help given, especially by the state or an organization, to people who need it สวัสดิภาพ

snowball - grow bigger and bigger in size over time (like a snowball rolling down a hill)
snowball into fiscal problem

Fiscal liabilities incurred from state projects have been hidden in specialised financial institutions, allowing stable public debt. The debt and growing needs for social welfare compensation could snowball into fiscal problem, he said.

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