Somkid seeks quick cure for economic 'polio'

Somkid seeks quick cure for economic 'polio'

Deputy PM Somkid Jatusripitak, the cabinet's chief economic strategist, explains his policy to officials at the Commerce Ministry on Sept 2. (Post Today photo)
Deputy PM Somkid Jatusripitak, the cabinet's chief economic strategist, explains his policy to officials at the Commerce Ministry on Sept 2. (Post Today photo)

PATTAYA — Deputy Prime Minister Somkid Jatusripitak has admitted that curing Thailand's economic "polio" will be an uphill task.

Mr Somkid likened the economy to a patient with two legs, one being exports and investment and the other consumption. The disease has eroded exports and investment and at the same time curbed spending in rural areas.

He said his duty was to concentrate on curing the disease so that the two legs could balance, but admitted that time was not on his side.

The country has to restructure the economy to maintain the proper balance between exports and domestic consumption, he said.

"I believe we can but it will still be difficult," he told a seminar of National Legislative Assembly members in Pattaya on Saturday.

Thailand's exports have fallen steadily since the start of this year, reflecting slumping demand from China, which accounts for about 13% of all Thai shipments abroad.

Because export performance is expressed in US dollar value, the slowdown also reflects the steady strengthening of the greenback against most global currencies this year. The baht has lost nearly 9% of its value since the start of 2015.

Export weakness, which is being experienced by developed and developing countries alike, has in turn led to a lacklustre investment climate as businesses are wary of committing to expansion or new ventures.

The Commerce Ministry last month finally conceded that exports would not grow this year as it had been insisting for months, but would contract by about 3%. "The leg for exports which once was strong now has gout," said Mr Somkid.

The deputy prime minister called for a renewed push to improve the competitiveness of Thai products in the world market by revamping the Board of Investment, improving education, overhauling the bureaucratic system including tax and budget reforms, and letting the public drive reforms that include a fight to end corruption.

Mr Somkid recently introduced more measures intended to bolster spending by people suffering from low farm prices. They include using the village funds and creating short-term construction jobs in local communities. As well, low-cost loans are being made available to small- and medium-sized enterprises.

The Bank of Thailand had projected Thai economic growth at 3% this year but indicated on Wednesday that the forecast might be lowered despite the new efforts to stimulate the economy.

Mr Somkid admitted that he had prepared some ideas for reviving the economy even before he was named to the cabinet of Prime Minister Prayut Chan-o-cha last month. A former deputy premier and finance minister under Thaksin Shinawatra, he was already serving as an adviser to the junta.

He took over the chief economic strategy position from MR Pridiyathorn Devakula in the cabinet reshuffle, which brought new people into most of the posts related to economic affairs.

Mr Somkid said he would do his best in the time the current government had left, but that it might not be long enough to push through all the plans he has.

The current military regime is expected to give way to an elected administration sometime in mid-2017 if a new constituition can be successfully drafted and approved in a public referendum.

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