The government should rethink its plan for legislation allowing it to acquire 2.2 trillion baht in loans for infrastructure projects, and instead finance the work through its annual expenditure budget, opposition leader Abhisit Vejjajiva said on Tuesday.
The Democrat Party leader said the annual budget requires projects to be implemented according to the order of priority set, with strict enforcement of the law against corruption for effective management.
"If these projects are implemented through loans, there will be problems with transparency and examination," said Mr Abhisit.
Abhisit Vejjajiva (Photo by Patipat Janthong)
He pointed to the use of 350 billion baht in loans for flood prevention and water management projects, saying it was very difficult to scrutinise these projects an expenditures because it involved exemptions from various laws and regulations.
Moreover, a loan bill could conceal the country's real debt status, and set a precedent of improper budgeting.
The former prime minister said his party's legal team was considering asking the Constitution Court for a ruling on whether the government's bill to acquire 2.2 trillion baht in loans was even legal.
Fiscal Policy Office deputy director general Ekniti Nitithanprapas disagreed, Now is the right time for Thailand to acquire 2.2 trillion baht loans for investment, he said.
"Thailand already has excess liquidity of 2.4 trillion baht, which is enough for investment," Mr Ekniti said. "The investment won't affect the country's public debt to GDP ratio."
He said the debt to GDP ratio is expected to rise to 50% by 2016, which was not above the global average of 60%.
The public debt to GDP ratio stood at 44% in January. The planned loans would be raised domestically. In Japan, the debt to GDP ratio was about 200%, and there was no financial crisis, he said.
"The loans will generate more income for the economy, from 11.8 trillion to 20 trillion baht within seven years, and push GDP growth by at least 5% each year," the FPO deputy director general said.
One of the benefits from the 2.2 trillion baht investment would be increased exports to Laos, Cambodia and Myanmar, whose economies were expanding rapidly.
If Thailand develops a proper logistisc system for the Indo-China market, the export sector would grow exponentially and compete with the markets in the United States and the European Union, which are facing economic problems at this time, Mr Ekniti said.
The planned 2.2 trillion baht in loans would also raise the value of land and real estate, and help distribute more wealth to other regions in the country, he added.