The University of the Thai Chamber of Commerce (UTCC) has recommended the government reconfigure the contentious digital wallet initiative.
It suggests scaling down the scheme, concentrating exclusively on assisting low and middle-income individuals grappling with debt to redirect some funds towards investments in water management systems, addressing challenges posed by the El Niño weather phenomenon next year.
Anusorn Tamajai, director of the Digital Economy, Investment, and International Trade Research Center under the UTCC, said it is unnecessary for the government to hand out cash to everyone. The unused funds can be invested in water management systems, which are deemed essential to tackle the harsh impact of anticipated drought, he said.
"The government's primary goal may be to stimulate the economy, aiming for growth of 5-6% next year by spending 560 billion baht via the digital wallet scheme. Assuming monetary circulation of 1-3 times, an estimated 1.6 trillion baht would circulate from the scheme, which could increase GDP by another 1.14-3% from the existing economic base," said Mr Anusorn. "However, if the allocated funds are not effectively used, it may trigger an increase in the Bank of Thailand's policy rates, which could impact the efficiency of expenditure."
The effectiveness of a cash handout is considered lower than job creation measures or investing in water management systems, which have longer-lasting effects, he said.
"Policymakers should consider opportunity loss when allocating funds for various purposes," said Mr Anusorn.
Regarding the use of blockchain technology, the government may need to begin testing it by allowing private companies to use blockchain systems in preparation for future government services and direct democracy elections, he said.
Mr Anusorn said there are three ways to fund the digital wallet project: creating new debt via state banks to expedite the process in February, reducing the budget for unnecessary projects, and increasing borrowing by creating a budget deficit.
"The government should scale down spending on the scheme and focus on helping those who are truly in need, such as the middle class with debt problems. When this group receives money, it will have a significant impact on spending. However, distributing funds to everyone with the hope of paving the way for blockchain technology development in the future may not achieve the desired results in stimulating the economy," he said.
Thanavath Phonvichai, president of the UTCC, said the university's latest survey of 1,280 respondents nationwide found 76.4% were satisfied with the government's proposed digital wallet initiative and expected to use digital money, while 15.6% of individuals with a monthly income of 40,001 baht or more stated they would not use the funds. Among those who planned to use the digital money, 24.5% intended to buy household goods, while 21.0% expected to buy food.