Resignations seen as minor setback
Moves unlikely to impact rehabilitation
published : 10 Jul 2020 at 04:02
newspaper section: Business
writer: Post Reporters
Thursday's resignations of the former leader of the ruling party and three other senior officials could signal an imminent cabinet reshuffle.
And while most business leaders say big changes are unlikely to happen, they want economic experts to join the cabinet to help the nation steer its way through the coronavirus crisis.
Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said the resignations are unlikely to have an immediate impact on state efforts to rehabilitate a staggering economy, since the real concern is what the government will do next with each official's ministership.
"The ministers have resigned from their party, but their positions in the cabinet remain the same," Mr Supant said. "We believe the implementation of economic stimulus measures will carry on."
He said he could not tell how long the government would maintain the momentum of its work, given the likely cabinet reshuffle and impact on the economic team.
If a big change comes, the FTI wants to see only an expert who excels in economic affairs leading the team, Mr Supant said.
The capability and experience of the newcomer are crucial as Thailand struggles to overcome the severe economic impact of the pandemic, he said.
FTI vice-chairman Kriangkrai Tiannukul said he was not surprised by the four key PPRP members stepping down.
The FTI has braced for political uncertainty since 18 of 34 members of the executive board of the Palang Pracharath Party decided to leave their posts on Jun 1.
Mr Kriangkrai said he shared some of Mr Supant's same concerns with regard to a cabinet reshuffle.
It's difficult to say at the moment what effect the change will have on investors' confidence, he said.
Santisuk Klongchaiya, chief executive of Thai AirAsia, said anyone who is responsible for the economy should keep working on the same plans to ensure continuity.
If necessary, the airline is ready to have further discussions with the Finance Ministry on problems besetting the industry, he said.
Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, said that as long as the four ministers have yet to officially resign from their ministerial posts, any impact on the economy is unlikely.
Kalin Sarasin, chairman of the Thai Chamber of Commerce, said the private sector is most concerned about the government's policy continuity and the ongoing social and economic rehabilitation efforts after the virus crisis.
"This time is a vital transitional period, as the government is on the way to speed up injecting money to the needy people and businesses affected by the deadly virus," he said. "Many more key stimulus measures are also in the pipeline to help reboot businesses and the economy. Any cabinet reshuffle may cause a hiccup in policy continuity and the ongoing efforts."
Sompop Manarungsan, president of the Panyapiwat Institute of Management, said the extent of the impact from any cabinet shake-up will rest with Prime Minister Prayut Chan-o-cha.
"New people or representatives of any parties [who replace the four ministers] must be qualified and create confidence and trust among the people now that the country is in a crucial and critical period," he said. "Time is vital. The new candidates have to compete against time to create confidence among the general public.
"There is no longer a trial or probation period, now that the rehabilitation efforts will be much tougher than any remedial ones which have only one restriction about the budget limit. Rehabilitation needs teamwork among those who have to come up with unity both in fiscal and monetary policy."
According to Mr Sompop, the key post is the finance minister, who has to work closely with the Bank of Thailand. Anyone who assumes this position must be professional and versatile, he said.
Political risk looming
"Political noise could create fiscal policy uncertainty and weigh on consumer and business sentiment," said Tim Leelahaphan, an economist at Standard Chartered Bank Thai. "Politics could re-emerge as a potential risk to recovery."
Political stability is crucial, he said, especially with the fiscal packages being rolled out.
A cabinet reshuffle to reallocate cabinet seats to all parties in the coalition is expected to take place by August, according to media reports.
The PPRP restructuring and a possible cabinet reshuffle could lead to a realignment of factions within the party and, more importantly, its key coalition allies, namely the Bhumjaithai and Democrat parties, Mr Tim said.
Given that the PPRP has just 118 seats in the lower house, the unity of the multi-party coalition government has implications for the ability to pass legislation -- including the budget bill for fiscal 2021, which starts in October -- and implement policies, the economist said.
The budget bill is scheduled for its final readings in the House in September. Meanwhile, supporters of the now-defunct Future Forward Party have held small protests and gatherings since Feb 21, when the Constitutional Court ruled to dissolve the party for violating election laws, Mr Tim said.
"While Covid-19 containment measures have put a temporary stop to such activities, we see a risk that they will resume once the situation normalises," he said
Ariya Tiranaprakit, senior executive vice-president of the Thai Bond Market Association, said the resignation of three cabinet ministers from the PPRP is unlikely to affect the bond market because Deputy Prime Minister Somkid Jatusripitak is still overseeing economic policy and the amount of borrowing by the government is not expected to deviate from the previously announced plan.
- cabinet reshuffle
- budget bill