Thailand's economy has become sluggish and can't be salvaged by simply injecting money through programmes such as the government's 500-billion-baht digital money handout scheme, which will likely help stimulate the economy in only one or two quarters, according to former prime minister Abhisit Vejjajiva.
In a special interview with the Bangkok Post, Mr Abhisit also pointed to the need to speed up amending laws seen as obstacles to the development of both modern businesses using clean energy and that of the green economy, which he sees as an ideal cure for the country's economic stagnation.
These legal challenges are a key factor hindering Prime Minister Srettha Thavisin's effort to attract leading international companies to Thailand, said Mr Abhisit, who rated Mr Srettha's attempt to attract more investments into Thailand as not as successful as it should have been.
Mr Abhisit was referring to Mr Srettha's meetings with key business people during his trips overseas.
Investment concerns
Thailand's lack of laws, regulations and technology crucial for enabling the development of modern businesses is what international investors are largely concerned about, especially now the government has yet to demonstrate clearly what new business direction Thailand actually is moving towards, said Mr Abhisit.
Worse still, in wooing investments from overseas, the Srettha administration is focusing more on business sectors with minimal growth, said Mr Abhisit.
This wrong investment promotion targets, together with high purchasing power among only certain small groups of Thai consumers and a high rate of household debt, has become a major structural problem, which this government is trying to address by introducing the digital wallet handout scheme and raising the minimum daily wage to 400 baht, said Mr Abhisit.
"One clear example is Microsoft executives' omission of the exact investment figures the tech company planned for Thailand when they announced the company's investment plan in Thailand recently," he said.
"They have announced clear investment figures planned for ... Indonesia and Malaysia while leaving blank their investment plan in Thailand," he said.
"If Microsoft had really intended to set up a data centre in Thailand, the company would have clearly stated what percentage of clean energy use was required as a condition of the promised investment," he said.
"And we still don't have the answer to questions raised about clean energy policies which will ensure the continuity of business development [by prospective international investors]," Mr Abhisit said.
Every sector needs help
Thailand's economic growth is normally observed through the growth achieved by large public companies, while the reality now is only companies holding a concession granted by the government are growing, Mr Abhisit said.
This clearly shows Thailand's economic growth happens in only certain businesses, not across all business sectors as it should be, he said.
"The solution is we have to begin revamping laws and regulations which have been discussed for many years," he said.
"The structure of Thai laws is a headache even to Thai companies. These laws are outdated and incompatible with modern businesses, new technology and the financial system," Mr Abhisit said.
Even the government's digital wallet scheme and policy to raise the minimum daily wage to 400 baht still require a legal amendment, said Mr Abhisit, adding any further delays in amending the laws will likely cause the economy to stagnate further into next year.
"Up until now, we still haven't seen the government making any real move in implementing those policies it had promised voters [during the election campaign] while pressure is mounting for it to honour its promises," he said.
The ruling Pheu Thai Party as well as its precursor, the now defunct Thai Rak Thai Party, was well known for its tendency to opt for a quick fix, such as injecting money into the economic system through a stimulus programme, instead of tackling a problem at its root cause, said Mr Abhisit.
If these structural problems hindering economic growth are left unresolved, the economy will flop again in one or two quarters after the impact of the short-term economic stimulus has faded, he said.
The coalition government also lacks unity in its efforts to improve the economy, Mr Abhisit argued.
New economic packages
Deputy Finance Minister Paopoom Rojanasakul earlier told the Bangkok Post the ruling party has always maintained the country faces economic stagnation and the digital wallet handouts are intended to jolt the economy back from its slumber.
Mr Paopoom blamed the sluggish economy on three elements: the delay in implementing the 2024 fiscal budget; inefficient fiscal and monetary tools to stimulate the economy, with private sector confidence waning and consumers holding back on spending; and a contraction in loans, especially for small and medium-sized enterprises (SMEs).
"In short, the fiscal sector lacks ammunition, and while the monetary sector has it, it refuses to use it. This results in banks being cautious about extending loans. With all these elements, the country's economy is sluggish," he said.
On Friday, Mr Srettha said the government will roll out additional measures to stimulate the economy.
He said he discussed a range of issues, including economic stimuli and the stock market, with Finance Minister Pichai Chunhavajira on Thursday night.
"A big announcement on short-term, medium-term and long-term measures will be made on June 24 or 25," the prime minister said.
Asked if this would be good news, Mr Srettha said: "Let's wait and see".
He also said Mr Pichai will discuss the inflation target with Bank of Thailand (BoT) governor Sethaput Suthiwartnarueput.
Mr Srettha earlier said many foreign investors were interested in investing in Thailand's projects such as the "Land Bridge".
This 1-trillion-baht project aims to develop a logistics network from Ranong province along the Andaman Sea to Chumphon province along the Gulf of Thailand.
It also comprises deep-water ports in both provinces, a motorway cutting across the land to connect the two provinces and a railway system, with the goal of preloading containers onto waiting container ships.