Leading the economy

Leading the economy

With a new coalition government being formed, attention is focused on who will be appointed to the crucial economic ministries

Pita Limjaroenrat, centre left front row, leader of the Move Forward Party and candidate for prime minister, and leaders of potential coalition parties wave to supporters at a gathering on Wednesday. Wichan Charoenkiatpakul
Pita Limjaroenrat, centre left front row, leader of the Move Forward Party and candidate for prime minister, and leaders of potential coalition parties wave to supporters at a gathering on Wednesday. Wichan Charoenkiatpakul

The business sector is calling for the new government to appoint appropriate leaders to take the helm at economic ministries, in particular the Finance Ministry, as they want to see the country progress without interruption amid several internal and external challenges.

The Move Forward Party (MFP) claimed victory in the country's election last week, then announced the formation of an eight-party alliance. The leaders of the eight parties -- MFP, Pheu Thai, Prachachart, Thai Sang Thai, Seri Ruam Thai, Fair, Palang Sangkhom Mai and Pheu Thai Ruam Palang -- were present on Thursday at the announcement.

The parties are drafting a memorandum of understanding (MoU) to map out guidelines for their collaboration and address national, political, economic and social crises. Details of the MoU are slated to be revealed on May 22, the ninth anniversary of the 2014 military coup.

MFP leader Pita Limjaroenrat said last week the eight parties will establish working groups to facilitate the transition from caretaker government to the new administration, adding that the allocation of cabinet seats was not up for discussion at this stage.

Amidst local and global economic uncertainties, the spotlight falls on those appointed to become economic ministers.

The seven economic team members of the MFP are a mixture of experienced and younger scholars, officials and entrepreneurs. The team is led by deputy party leader Sirikanya Tansakun, who is expected to be appointed finance minister. She graduated with a master's degree in economics from Thammasat University and received the same degree from Universite Toulouse 1 Capitole in France.

The party's economic policy focuses on promoting inclusive growth, creating a fair, competitive market and helping Thai businesses to compete overseas.

The Pheu Thai Party's economic team is led by Prommin Lertsuridej, who was regarded as one of the top assistants for former prime minister Thaksin Shinawatra when he established the Thai Rak Thai Party in the early 2000s.

The team members include property tycoon Srettha Thavisin, economist Supavud Saicheua, and Panpree Pahitanukorn, the party's former deputy leader and former chairman of PTT Group.

Pita Limjaroenrat, leader of the Move Forward Party and candidate for prime minister, centre left (front row), joins hands with leaders of coalition parties at a gathering of political parties held on Wednesday May 17, 2023. Wichan Charoenkiatpakul


The Federation of Thai Industries (FTI) wants a capable economic team and a coalition government that can forge cooperation with other state and private agencies.

Both MFP and Pheu Thai Party, which tallied the highest vote totals in the general election by a wide margin, have their own teams of advisors to implement economic policies, including pledges to raise the daily minimum wage -- to 450 baht as suggested by the MFP and 600 baht as promised by the Pheu Thai Party.

The coalition government should appoint people with expertise in economic issues to lead the Thai economy on the appropriate path, said Kriengkrai Thiennukul, chairman of the FTI.

Yet the government alone cannot solve all economic challenges, which range from high energy prices and a global slowdown to the economic impact of geopolitical conflicts, he said.

The new administration should know how to encourage teamwork and communication with key business groups and ministries to translate economic policies into action, said Mr Kriengkrai.

These groups include the Joint Standing Committee on Commerce, Industry and Banking, of which the FTI is a member, he said.

"The FTI is ready to work with any new government," said Mr Kriengkrai.

The tripartite wage committee is another group that must collaborate to set an appropriate minimum wage, he said. The committee is made up of employers, employees and government representatives.

Mr Kriengkrai said the FTI does not oppose a wage rise, given inflation trends, but it wants to see wages increase gradually and in accordance with workers' skills.

"Geopolitical conflicts, especially those involving China, the US and Europe, may change the world," he said.

These are trading partners of Thailand and disputes among them may pressure the nation to take sides, said Mr Kriengkrai, posing a major risk to Thai diplomacy and trade.

"The MFP, which leads the coalition government, should know how to position Thailand amidst conflicts," he said.

MFP leader and candidate for prime minister Pita Limjaroenrat, seated second from left, at a press conference with the leaders of seven potential coalition partners on Thursday May 18, as they announced their intention to form a new government and support Mr Pita as the next prime minister. Nutthawat Wicheanbut


Somchai Phakaphaswiwat, an independent academic in economics and politics, said the MFP's economic team is comprised of a new generation in academia and the private sector.

He said finance minister is a crucial position in the government, making it necessary to appoint a person with knowledge of banking and finance to the post.

Such a person can be younger if they have some management experience, particularly knowledge of foreign affairs, said Mr Somchai.

He said the MFP's public welfare policy pledges can be implemented if they do not affect the government's financial and fiscal discipline.

Government debt is almost 62% of GDP, with the debt ceiling set at 70% of GDP. The government should not keep on borrowing until it hits the debt ceiling, Mr Somchai said.

The Move Forward Party stated the formation of an eight-party alliance on Thursday May 18, consisting of MFP, Pheu Thai, Prachachart, Thai Sang Thai, Seri Ruam Thai, Fair, Palang Sangkhom Mai and Pheu Thai Ruam Palang parties. Nutthawat Wicheanbut


The investment budget represents only 20% of the expenditure budget. If the welfare budget increases to 300 billion baht per year, that would affect the investment budget, he said.

If the new government wants to increase the welfare budget without affecting the investment budget, one option is to reduce current expenditure, which represents 76-77% of the expenditure budget, said Mr Somchai.

One portion of expenditure is the military budget, but that would not be easy to cut as it requires hefty political capital and geopolitical considerations have to be taken into account, he said.

Mr Somchai said handling economic challenges is the most daunting issue for the new government as Thailand has lost its competitiveness. Over the past two decades, the country's economic growth rate has fallen, shrinking by 1% every 10 years.

Another pressing issue for the new government is upgrading the country's agricultural sector, he said. The sector accounts for 32% of Thailand's working population, but contributes only 8% of GDP, said Mr Somchai.

Kuroda Jun, president of the Japan External Trade Organization Bangkok, welcomed the Thai election results.

"It is wonderful that a large number of people participated in the general election," he told the Bangkok Post.

Members of the Move Forward Party flank leader Pita Limjaroenrat as they wave from a truck near Democracy Monument on May 15. The party is trying to form a coalition government.  Wichan Charoenkiatpakul

"I look forward to the final results and contributing to the further development of economic ties between Japan and Thailand when the new government takes shape."

Krungsri Capital Securities (KCS) said based on recent reports, the Pheu Thai Party is expected to manage the new government's economic policies by taking the positions of deputy prime minister in charge of economic affairs, as well as posts in the Commerce, Transport, Energy and Industry ministries.

If this occurs, it would ease pressure on large-cap stocks likely to be affected by MFP policies, including Advanced Info Service, Gulf Energy Development and Global Power Synergy, said the brokerage.

"If the Pheu Thai Party takes the lead in managing the economic policies of the new government, it would add positive sentiment to the stock market," said Koraphat Vorachet, capital market fundamental investment analyst at KCS.

Chavinda Hanratanakool, chief executive of Krungthai Asset Management and chairwoman of the Association of Investment Management Companies, said a change in government and policy has the attention of investors.

The business sector is awaiting the formation of a new administration and hopes the economy can continue its momentum without faltering, she said.

"Economic ministers are important and they should have special knowledge and experience, with the ability to manage the economy without interruption amidst recession risks from outside Thailand," said Ms Chavinda.


Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association (THA), said the most important qualifications for the tourism and sports minister have nothing to do with experience or age, as many former ministers were not involved with the tourism industry beforehand.

She said even young politicians can take the post if they have core competencies such as coordinating skills, listening to stakeholders including the private sector, and working to bring those discussions into practice.

"Working with the tourism industry requires coordinating skills as the industry is involved with various stakeholders from many public and private organisations," said Mrs Marisa.

"Even without experience, a new minister can rely on experienced senior officers and civil servants to help guide the administration in each ministry."

She pointed to the model of current cooperation between the THA and the Bangkok Metropolitan Administration (BMA).

The deputy governor of BMA, Sanon Wangsrangboon, is a younger manager who helped set up hotels' housekeeping training project by bringing together the Thailand Professional Qualification Institute, THA, and people in local communities.

This project assists unemployed workers to obtain jobs in hotels and helps the sector deal with labour shortages.

Mrs Marisa said civil servants who work in the ministries or governmental sector have ideas to support the tourism industry, but often do not have the authority or know-how to approach related organisations to engage in new projects.

As a result, the Tourism and Sports Ministry plays a key role in connecting the dots and making efficient projects happen, she said.


Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce (UTCC), said the policies of both MFP and the Pheu Thai Party primarily aim to address the problems of people in all generations.

Both parties emphasise the use of IT and digital technology, such as promoting the digital economy, startups, soft power, artificial intelligence and blockchain, to support transparency that aligns with structural changes in the economy.

Mr Thanavath said these policies will enhance competitiveness and use technology to improve the quality of education and human resources, while also modernising the government.

He said the MFP's economic team presented suitable stimulus measures, while the Pheu Thai Party has experience in running the country and successfully completed several projects, such as repaying International Monetary Fund debts, stimulating the economy and generating income for small businesses.

"As the MFP's performance in government has yet to be seen and its economic team comprises young technocrats and entrepreneurs whom we are not familiar with, the party needs to prove itself to maintain credibility," said Mr Thanavath.

"Both parties may need to seek experienced individuals to help build confidence."

Aat Pisanwanich, director of the Center for International Trade Studies at the UTCC, said the policies presented by the two parties are expected to make the public happier if electricity costs decrease, the oil price structure improves and Thais gain more economic opportunities.

However, Mr Aat said certain business groups, such as the energy, electricity, oil and liquor industries, may be negatively affected by the MFP's commitments, while both leading parties seemed to have less focus on stimulating the international economy.

Nareerat Wiriyapong, Nuntawun Polkuamdee and Phusadee Arunmas

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