With the National Anti-Corruption Commission (NACC) study on the 500-billion-baht digital wallet scheme now made public, the ruling Pheu Thai Party stands at a crossroads, according to political observers.
Abandoning the flagship policy risks upsetting party supporters, but pushing it requires making adjustments ranging from funding to distribution to spending procedures, not to mention intense scrutiny from independent public agencies and civil society.
The study was prepared by a sub-committee headed by Supa Piyajitti, who played a key role in conducting probes into the rice-pledging scheme implemented by the Yingluck Shinawatra administration.
The panel invited representatives from the Bank of Thailand, the National Economic and Social Development Council and the Budget Bureau to provide information, with the point of interest being whether or not the country is in an economic crisis that justifies this kind of spending.
Many critics see the handout scheme as an unnecessary splurge. Section 53 of the State Fiscal and Financial Discipline Act stipulates that the government is allowed to obtain loans for reasons other than those provided in the law on public debt administration, but only when there is a need for urgent action to address critical problems and when annual appropriations cannot be fixed in due time.
According to the study, in which the NACC conveys its concerns and recommendations, the digital wallet programme is mired in potential legal jeopardy.
For starters, the handout scheme promised during the election campaign last year differs from what was announced in parliament.
During the campaign, Pheu Thai promised to give 10,000 baht to every Thai aged 16 and over, which made about 56 million people eligible for the money. It also gave an assurance that the scheme would be financed from the national budget.
However, Pheu Thai has since set additional conditions that effectively narrow the scheme's coverage to 50 million people and plans to borrow 500 billion baht to fund it.
Also, the legality of a bill to seek the 500-billion-baht loan was called into question. There are concerns that the government could violate the State Fiscal and Financial Discipline Act because the country shows no sign of being in a crisis that warrants such a scheme to urgently shore up the economy.
Then, there are the economic risks associated with the handout programme if it proceeds. An excessive financial burden incurred from the massive loan could strain state expenditure and subsequently hurt the country's investment prospects on account of financial instability.
The report also raised issues concerning the use of blockchain technology to support the digital wallet policy. The technology has not been adopted by the country's banking system, meaning the government will have to undertake a huge investment in developing an application backed by blockchain.
If the government goes ahead with launching the technology, it will have to set aside funds for the development of this special app. The Finance Ministry has yet to respond as to who will be hired to develop the system.
"Then there is the risk of fraud tied to fund distribution and spending procedures. What if eligible recipients who urgently need cash are offered an advance of 7,000 baht by brokers in exchange for access to the 10,000-baht digital wallet? There are many possible loopholes associated with the scheme.
"Giving away money for people to spend isn't as efficient as making an investment," Sirilaksana Khoman, a member of the Supa sub-committee, was quoted as saying.
However, observers believe that Pheu Thai can't simply back down and drop the digital wallet programme. But to push the policy, the ruling party needs all coalition partners to close ranks and support this initiative.
"The policy isn't clouded by corruption that calls for legal punishment. But Pheu Thai must be prepared to face intense scrutiny from the opposition, the Senate, anti-graft agencies and the civil sector," said Yuttaporn Issarachai, a political science lecturer at Sukhothai Thammathirat Open University.
Following the NACC study, the government admitted the launch of the scheme, originally scheduled for May, is likely to be pushed back and has ruled out scrapping the policy for the time being.
Deputy Finance Minister Julapun Amornviwat discussed the possibility of the handout project being delayed until June, while Prime Minister Srettha Thavisin expressed confidence that the government could address any reservations about the scheme.
The government insisted the programme will happen and rescue the country's economy which it believes is in crisis. It cited the economy expanding at a meagre rate of 1.9% per year over the past decade as grounds for pushing for stimulus.
What Senate comes next?
While political observers can't wait to see the back of the military-appointed Senate, whose term ends in May, several remain sceptical about whether the next Upper House will truly represent the interests of the public and the democratic process.
The current Senate, handpicked by the now-dissolved National Council for Peace and Order, was widely seen as the regime's political tool to prolong its stay in power. It helped keep former coup leader Gen Prayut Chan-o-cha as prime minister after the 2019 election and effectively blocked attempts by political parties to rewrite the military-sponsored charter.
When the five-year term of interim senators comes to an end on May 11, also going with them will be the power to join the House of Representatives in co-electing a prime minister.
Although the Election Commission has yet to announce a timeline for the Senate election process, the new Senate, to be selected from a pool of candidates from 20 professional groups through a complex process, is expected to assume office around mid-July at the earliest.
Under the charter, the next Senate will have 200 members selected from 20 professional groups such as law and justice, public health, education, agriculture and mass media and arts. Candidates must be at least 40 years old, have at least 10 years of experience in their respective fields and not be affiliated with a political party.
The elections will be held at the district, provincial and national levels in which cross-voting will also be applied to prevent cronyism and collusion among candidates. After the election at the national level, the new chamber will see each of the 20 professional groups contributing 10 members.
Despite not being empowered to co-elect a prime minister, the new senators will remain powerful and can shape the country's political landscape through endorsing appointments to public independent agencies which keep political parties and political office holders in check, according to political observers.
Thus, many believe that the race to fill the Senate promises to be as intense as the election of MPs, and there is a possibility that stakeholders, particularly political parties, will try to influence the process in order to get people sympathetic to them selected.
Considering their success in the May election last year, Pheu Thai and the main opposition Move Forward Party (MFP) are believed to have the better odds in the competition for Upper House dominance, according to observers.
It is believed the number of their affiliates to be selected for the Senate election will be proportionate to the number of House seats they captured; the MFP finished first in the polls with 151 House seats, while Pheu Thai grabbed 141.
However, other parties like Bhumjaithai, Palang Pracharath (PPRP) and the United Thai Nation Party (UTN) cannot be underestimated.
Anutin: Conservative camp champion
Bhumjaithai, which finished third in the polls, is known to have under its wing solid networks run by political dynasties and organised support across various professional groups. Deputy Prime Minister Anutin Charnvirakul leads Bhumjaithai, which has taken over from the PPRP as the defender of the conservative camp.
The PPRP and the UTN are also said to enjoy firm support among voters in the public sector and are expected to position themselves strategically in selecting senators, according to political observers.
Olarn Thinbangtieo, a political science lecturer at Burapha University, told the Bangkok Post that it should not come as a surprise if political parties manoeuvre to ensure that their affiliates scattered across the 20 professional groups are selected.
"They are likely to field [secretly] as many of their people as possible in the contest. And no matter how the senators are chosen, the winners will be believed to represent political parties," said the analyst.
But Mr Olarn doubts the MFP, despite its popularity, has an edge over other parties.
The MFP's popularity may have made it a formidable force in last year's election, but the selection of senators is a different game where established networks and connections of traditional political parties may prove decisive.
This could make it difficult for MFP-affiliated candidates to openly build and lobby for support, while candidates with affiliations to other parties may have an advantage thanks to their well-developed web of connections, which would allow them to strategise their support for each other in the selection process, according to the analyst.