Former finance minister Somkid Jatusripitak has warned the public not to be fooled by the country's buoyant economic growth.
Somkid: Gloom below economy’s bloom
The overall picture of the economy may look rosy but it may well be an illusion, he said.
Mr Somkid said he is worried that the country's economic growth may not be sustained as less accountable politics is having a detrimental effect on national competitiveness.
Delivering a lecture at an event in Bangkok yesterday marking Reporters' Day and the 58th anniversary of the creation of the Thai Journalists Association, he said the country, now implementing its 11th national economic and social development plan, has come a long way.
Gross domestic product now amounts to 10 trillion baht and economic growth is forecast at 5% next year.
Thailand could even be the engine driving forward the growth of the Asean Economic Community, slated to be launched in 2015, he said.
However, he said messy realities lay beneath the sunny facade. Although GDP is now being maintained at 5-6%, such a rate will not be easy to sustain.
He pointed out that the agriculture sector _ the backbone of the country employing the majority of the workforce _ falls short in terms of production process, irrigation capacity and management of demand and supply.
Mr Somkid said the sector's problems have been compounding over the years. He said it was a major quandary that the 30-40 million people employed in farming are producing the equivalent of only around 10% of GDP or less.
He said the country relies on cheap labour for its growth and much of export revenue is in the hands of a small elite.
Mr Somkid said the country must reform its finances. The national budget is not conducive to ensuring equal economic opportunities, and prosperity is centralised in Bangkok, hindering nationwide economic growth.
Meanwhile, the 300-baht minimum wage policy is forcing private businesses to reduce expenses and this hurts workers in the process, Mr Somkid said.
Despite the wage hike, workers' skills have not developed.
Exports will be increasingly less competitive as the country's production technology is rather limited.
Mr Somkid said when public consumption is buoyed by borrowing, it does not contribute to economic strength. The poor who will eventually feel abandoned will turn to illegitimate sources for financial help, which is dangerous for society, he said.
On the political front, vote fraud remains rampant, he said. Elections should be about choosing people to run the government, but instead they are about electing people more interested in fighting for their pieces of the pie. Cabinet members are appointed without taking public opinion into consideration, he said. The appointments are based on a system of cronyism and intended to sideline opponents.
"The country's system is faulty on the whole. We don't have the right people for the right jobs," he said.
Mr Somkid predicted that it would be more difficult for the country to rely on exports for economic growth as its products are less competitive than cheap goods from China, while Thai products cannot compete in upscale markets because of shoddy quality.
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- Writer: Manop Thip-Osod