Like most issues in Thailand today, the truth probably lies somewhere in the middle.
Yes, further delays in new public infrastructure investment will certainly do no favours for Thailand’s competitive economic standing.
And yes, it’s quite possible that a rethink of the government’s defunct 2-trillion-baht investment plan may push policymakers to take a more reasoned, inclusive approach towards judging the country’s needs.
Regardless, the end result is the same, with businesses and consumers alike forced to bear the costs of inefficiency from roads, rail and transport systems that are inadequate for coping with present, let alone future needs. Why is this so?
In fact, money is perhaps the least of the problems.
The inability of governments to initiate long-term investment programmes reflects their myopia in organising budget priorities and their love affair with short-term fiscal handouts.
Public agencies are hamstrung with excess bureaucracy, a leadership gap and incentive structures that hardly ever reward initiative and vision. Perhaps most onerous is that the lack of political will results in policies which simply serve as bandages which tend to disguise deeper, more fundamental problems.
Take the question of logistics. Analysts and economists have long argued the country’s overwhelming reliance on road transport is inefficient and costly relative to rail.
But rather than tackle the problems of why the State Railway of Thailand (SRT) is the worst-performing state enterprise in the country, with debt in the tens of billions of baht, the Yingluck Shinawatra government was prepared to pass over hundreds of billions of baht more in new funds to finance rail improvements.
Should an agency so riddled with legacy problems and inefficiencies be entrusted with this task? Without reform, what is to prevent further waste and loss? Nothing. Among the project proposals is a plan to build five new dual-track lines nationwide, allowing cargo to be moved at higher speeds. The SRT argues that of the five planned routes, two are ready to begin implementation today.
It is a strange claim, considering the environmental impact assessments for both routes have yet to be complete. One would think consideration of the impact of such a large programme would be first and foremost in the minds of policymakers.
But no, it appears their first consideration is financial, especially now the Constitutional Court has rejected the government’s plan to borrow the funds outside the annual budget process.
In fact, the Finance Ministry argues avenues exist under current law to finance the projects through the normal budget process.
For instance, the law allows the government to borrow each year the equivalent of up to 20% of total planned spending to cover a budget deficit, or roughly 500 billion baht under recent budgets.
Another 20% of budget expenditure may be used to guarantee new debt incurred by state enterprises, and the government may also borrow an additional 10% of expenditure in the form of foreign loans.
All told, the 2-trillion-baht special financing bill is unnecessary if existing financing options are used.
Of course, it’s understandable why the government would seek to bypass parliament and the budget process in favour of a special financing bill.
If the infrastructure projects are financed under the budget, it would certainly squeeze funds from other programmes and projects, all of which boast their own defenders and champions within the lower house.
Indeed, the projects proposed under the 2-trillion-baht programme are nearly all long-standing projects which were initiated by past governments but have never been able to get off the ground due to a lack of funding and shifting priorities within the House chamber.
It seems that when it is time to judge where resources should be allocated, short-term local or regional initiatives invariably trump multi-year national programmes.
This political reality is why some initiatives may take up to half a century to be realised. Suvarnabhumi airport, for instance, was first proposed in 1960 under the government of Field Marshal Sarit Thanarat.
It wasn’t until 2002 and the Thaksin Shinawatra government that construction started, with service beginning in 2006.
Thaksin supporters proudly point to Suvarnabhumi airport as an example of his ability to push forward with change.
But one should not forget it was actually the Anand Panyarachun government which first pushed for the start of the project.
Another example lies in Bangkok’s mass transit systems.
Proposals for improving the capital’s mass transit system stretch back to 1971. But it wasn’t until 1999 that the BTS Skytrain opened with just under 31 kilometres of light rail coverage, followed five years later by the launch of the 20km underground subway system.
The historical record shows the time horizon for public infrastructure investments is measured in decades, if not generations. Pity.
Wichit Chantanusornsiri is a senior economics reporter, Bangkok Post.