The government must ensure its ambitious 2-trillion-baht infrastructure scheme delivers value for the public and does not undermine the country's financial stability, two former finance ministers warned yesterday.
Thanong Bidaya and Somkid Jatusripitak, both former finance ministers under the Thaksin Shinawatra government, sounded notes of caution over the investment programme at a seminar yesterday.
Dr Thanong, who was finance minister from 2005-06, said corruption and economic value are valid issues of concern with the programme.
Nearly half the funds would be allocated to four new high-speed rail links. Dr Thanong said this made less economic sense compared with plans to upgrade existing rail tracks to support greater passenger and cargo transport.
"High-speed trains, I'm afraid, will only further highlight the income gap within society, as only the wealthy will be able to use the service while the poor will have to use slower means of transportation," he said.
Dr Somkid, finance minister from 2001-05, said prioritising public investment was critical for any policymaker.
Thailand's biggest problem today is not transportation or connectivity, but rather income distribution, poverty and competitiveness.
"I think we have to be realistic. We are a poor country. Of course, everyone wants to sit in a Mercedes-Benz. But we need to think about what is feasible," said Dr Somkid, currently the chairman of the Thailand Future Foundation.
The Yingluck Shinawatra government has highlighted the 2-trillion-baht, seven-year investment programme as critical for improving Thailand's competitiveness and supporting future economic growth.
The government views the plan as critical to adapting to increased integration of regional economies under the Asean Community starting in 2015.
But Dr Somkid warned the programme should not crowd out or act as a substitute for normal public investment under the annual government budget.
He quoted a slogan used by the Thai Rak Thai Party, the political entity founded by Thaksin that was the original incarnation of the ruling Pheu Thai Party, to make his point.
"In economic development, you have to water the roots, not the leaves. When you water the leaves, it's akin to just bribing the public," Dr Somkid said.
The Finance Ministry has insisted the infrastructure programme, to be financed under a special bill now under review by parliament, will not undermine the country's finances.
Public debt will remain under its target of 50% of gross domestic product for the rest of the decade, the ministry says.
But economist and executive chairman of the Thailand Future Foundation Sethaput Suthiwart-narueput said the capacity to service the debt was more important than debt-to-GDP figures.
He warned that debt expenses could rise dangerously by 2020 if losses from the rice pledging programme increase, economic growth slows or interest rates rise beyond projections.