PM launches 'people's  state' policy

PM launches 'people's  state' policy

Prayut denies move is economic populism

Prime Minister Prayut Chan-o-cha says his
Prime Minister Prayut Chan-o-cha says his "Pracha Rat" strategy will strengthen the grassroots and empower communities - but denies it is populism. (Post Today photo)

Prime Minister Prayut Chan-o-cha has unveiled a new strategy to build "a people's state" to bring together the state, the people and businesses for the long-term sustainable development of the country. 

The prime minister said the Pracha Rat (people's state) strategy aims to strengthen the country's economy at the grassroots level and empower local communities and local enterprises. The strategy is in line with the government's recently-approved 136-billion-baht stimulus package to boost the economy.

The government has also introduced a second stimulus measure to help small and medium-sized enterprises (SMEs) gain access to loans. The measure includes 100 billion baht in soft loans, a 100-billion-baht credit guarantee to encourage banks to lend to SMEs, a 10% tax rate for two years, a five-year corporate income tax exemption for SME start-ups and 6 billion in venture capital to be contributed by state-backed banks.

Gen Prayut insisted the people's state is different from political populism which seeks to give away money to win the support of voters.

The premier was presiding over the opening of a forum entitled "Uniting the state and the people for the grassroots economy" at Impact Arena, Muang Thong Thani on Sunday.

The Pracha Rat model means the people, the government and businesses must work closely together to pursue sustainable development and help farmers, workers and communities secure their livelihoods.

Under the model, the relationship between the people, the state, and businesses should be "horizontal", which means they should be equal, and support and encourage each other to achieve their aims.

"We make a pact together to solve problems and fix past mistakes. This is not populism. It is cooperation between the government and the people," he said.

"If we give away money all the time, the problem is we will have to continue to give more and more and this will become a debt of gratitude. But this government does not want you to owe us a debt of gratitude. Thailand is a people's state and populism has no place here."

The government will act as a facilitator to clear the way for the private sector and the people to work together, the prime minister said. The government will promote marketing for farm produce with plans to open central markets in the provinces so farmers can be in direct contact with consumers and traders, he said.

Vichai Assarasakorn, vice-chairman of the Thai Chamber of Commerce, said the 136-billion-baht stimulus package, particularly lending through the village funds, will help boost the economies of local communities, with about 200-300 billion baht expected to be generated.

The Thai Chamber of Commerce will also propose the government sets up provincial economic teams to ensure the stimulus measures are followed through, Mr Vichai said.

However, Surapong Tovichakchaikul, who sits on Pheu Thai Party's economic team, said the Pracha Rat policy has been lifted from old populist programmes. "It's alright if the people benefit from them," Mr Surapong said.

Mr Surapong also defended populist programmes initiated by the previous Pheu Thai-led government, saying several of them have been widely praised such as the 30-baht universal healthcare programme.

The Pracha Rat model has three measures to help Thai small- and medium-sized enterprises, farmers and low-income earners.

For the first measure, the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) and the Government Savings Bank (GSB) will be the lenders of a seven-year term loan to 59,000 Village Funds at 1 million baht each. They will offer interest-free loans for the first two years, with the government subsidising the interest to the tune of 2.2 billion baht.

Low-income earners in rural areas are prohibited from borrowing from the nearly 60 billion baht in funds to repay debts.

The second measure involves the Interior Ministry acting as the core agency responsible for allocating the 36.275 billion baht available from the reserve budget in the 2015 and 2016 fiscal years to 7,255 tambons.

Each tambon will receive 5 million baht to implement any project related to building or repairs in the area, and development projects in line with the sufficiency economy. Projects must be completed in three months.

The third measure will call for state agencies and state-owned enterprises to accelerate budget disbursement for small projects worth less than one million baht nationwide.

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