Scheme must favour locals

Scheme must favour locals

The Srettha government's plan to distribute 10,000 baht via a digital wallet represents a significant step towards stimulating the economy.

Prime Minister Srettha Thavisin envisions the policy as a catalyst for economic growth, and has set an ambitious target of achieving 5% annual GDP over his four-year term.

Under this plan, a one-time payment of 10,000 baht will be allocated to all individuals aged 16 and above for expenditure on goods and services within six months. However, this spending is limited to shops situated within a 4-kilometre radius of their registered residences.

According to the PM, the 4km radius requirement is designed to disperse the stimulus money to local businesses nationwide, rather than concentrating it on large business operators in downtowns or big cities. He emphasised that businesses in all areas will have an equal opportunity to benefit from this stimulus.

Despite the high hope and the government's brouhaha over the scheme, doubts has grown about whether this helicopter money can breathe life into the sluggish economy. Experts warn the government might need to fine-tune this digital wallet plan to get the desired outcome.

The scheme allows people to spend digital funds at various types of shops, ranging from traditional small grocers to modern convenience stores and hypermarkets. While enabling convenience stores and hypermarkets to benefit from the scheme is essential for consumer convenience, its impact on the local economy remains uncertain.

This is why several groups have criticised the 4km radius rule as impractical. The condition limits where people can spend. The government has hinted at adjusting this condition by expanding the spending area to cover an entire district instead.

Revising the rule, however, will defeat the purpose of the plan as some in the local economy might be opted out of the scheme. That said, a substantial portion of money would likely flow to larger business operators, given the popularity of large stores and nationwide retail outlets.

With implementation of the programme still about 5–6 months away, now is a good time for the government to tweak its strategy to make sure that grassroots businesses -- not big corporations -- get the full benefit.

The government should consider setting spending quotas, possibly a 50-50 split, between modern trade channels and local businesses. This approach would ensure the money cascades to target the local economy as per the objective of the scheme.

Furthermore, state agencies and local authorities must support local production and promote community and local businesses. This approach will enable grassroot businesses to accommodate the expected influx of funds.

Instead of merely doling out cash, the government must ensure local communities produce goods and services to capitalise on the increased consumer spending from the digital wallet scheme. Without local manufacturers and businesses producing goods to soak up the digital cash, the stimulus plan would seem to miss the point.

If the strategy can be redefined in this way, the effectiveness and sustainability of this handout will be enhanced. It will show a genuine commitment to helping people, as Mr Srettha unequivocally said his government would prioritise the interests of the people over big business operators.


Bangkok Post editorial column

These editorials represent Bangkok Post thoughts about current issues and situations.

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