Restructuring taxes, fixing 'weak points', revamping investment, driving economy
Within the year or so that the Prayut Chan-o-cha government is in office, five main issues will be pushed for economic structural change, Deputy Prime Minister MR Pridiyathorn Devakula says.
These are maintaining economic momentum, laying the foundation of a digital economy, resolving "weak points", restructuring taxes and revamping investment promotion.
In an interview with The Nation last week, Pridiyathorn, who is responsible for economic affairs, insisted that he would be in power for just one year, saying that clinging on to power was dangerous.
Although building a digital economy will challenge him most, the huge losses from the rice-pledging scheme may give him the most headaches.
"We might face an accumulated loss of up to Bt800 billion from the rice pledging [scheme]," he said, explaining that there were Bt200 billion in losses for all types of agricultural crops, but mostly paddy, before 2010 and Bt500 billion in losses for crops from 2011-13.
"The rice-pledging scheme, which is one single policy, has incurred the biggest damage on the country… perhaps that might be considered the biggest damage in the world."
He said the government may resolve this burden by leaving it to be paid off via a long-term bond issue - similar to the Bt780-billion Financial Institutions Development Fund (FIDF) bonds, which was part of some Bt1.3-trillion in debt left from the financial crisis of 1997. The FIDF bonds were issued to the public with a 30-year maturity. However, the amount of bonds to be issued would depend on exact figures delivered by a subcommittee auditing the rice scheme.
"This will help ease the load upfront of the government's burden so it has capacity left for budget allocation for investments," Pridiyathorn said.
While awaiting the figure for the rice scheme losses, the government needs to tackle the slowing economy by injecting money directly to rice and para rubber farmers, as it believes cash handouts will help to reboot the economy most effectively.
Pridiyathorn said the two packages to rice and rubber farmers were expected to cost not more than Bt50 billion but no further measures needed. Investments would be the next "engine" to prod the slow economy to grow. The bidding process for the construction of rail links - part of the national infrastructure development plan - would be sped up. The private sector would be also encouraged to participate in the projects via public-private partnership in a bid to reduce state spending.
"When the investment budgets are put in place, the real estate business will move on and that will help spur the economy for next year - all year," he said.
In regard to the "digital economy" plan, Pridiyathorn said he wanted to see a draft of the digital economy act that will be put to the National Legislative Assembly this year. If the bill could be passed before year-end, the government would have a full year to push the direction it should aim for, or what features it should have.
"To serve this, empowering or reinventing will be needed to upgrade the ICT [information communications technology]," he said, adding that the year may only be enough time to lay the foundations and the next government would need to carry out action plans and implement the task.
Pridiyathorn also said the government needed to resolve several weak points - not only in regard to fuel prices, so they reflect real costs - but other things in other sectors. However, the Energy Ministry was restructuring fuel prices.
In regard to taxes, he said he expected Thailand would not only be a regional hub of operating headquarters for multinational firms, but should focus on becoming a hub of international operating headquarters instead. But that would be tied to no taxes.
Lastly, Pridiyathorn said the government would focus more on "out-bound" investment promotion to help Thai companies expand their businesses broad. Though lacking Board of Investment support, he said that many Thai companies have spread to most of the Asean markets.
Restructuring taxes, fixing 'weak points', revamping investment, driving economy
Within the year or so that the Prayut Chan-o-cha government is in office, five main issues will be pushed for economic structural change, Deputy Prime Minister MR Pridiyathorn Devakula says.
These are maintaining economic momentum, laying the foundation of a digital economy, resolving "weak points", restructuring taxes and revamping investment promotion.
In an interview with The Nation last week, Pridiyathorn, who is responsible for economic affairs, insisted that he would be in power for just one year, saying that clinging on to power was dangerous.
Although building a digital economy will challenge him most, the huge losses from the rice-pledging scheme may give him the most headaches.
"We might face an accumulated loss of up to Bt800 billion from the rice pledging [scheme]," he said, explaining that there were Bt200 billion in losses for all types of agricultural crops, but mostly paddy, before 2010 and Bt500 billion in losses for crops from 2011-13.
"The rice-pledging scheme, which is one single policy, has incurred the biggest damage on the country… perhaps that might be considered the biggest damage in the world."
He said the government may resolve this burden by leaving it to be paid off via a long-term bond issue - similar to the Bt780-billion Financial Institutions Development Fund (FIDF) bonds, which was part of some Bt1.3-trillion in debt left from the financial crisis of 1997. The FIDF bonds were issued to the public with a 30-year maturity. However, the amount of bonds to be issued would depend on exact figures delivered by a subcommittee auditing the rice scheme.
"This will help ease the load upfront of the government's burden so it has capacity left for budget allocation for investments," Pridiyathorn said.
While awaiting the figure for the rice scheme losses, the government needs to tackle the slowing economy by injecting money directly to rice and para rubber farmers, as it believes cash handouts will help to reboot the economy most effectively.
Pridiyathorn said the two packages to rice and rubber farmers were expected to cost not more than Bt50 billion but no further measures needed. Investments would be the next "engine" to prod the slow economy to grow. The bidding process for the construction of rail links - part of the national infrastructure development plan - would be sped up. The private sector would be also encouraged to participate in the projects via public-private partnership in a bid to reduce state spending.
"When the investment budgets are put in place, the real estate business will move on and that will help spur the economy for next year - all year," he said.
In regard to the "digital economy" plan, Pridiyathorn said he wanted to see a draft of the digital economy act that will be put to the National Legislative Assembly this year. If the bill could be passed before year-end, the government would have a full year to push the direction it should aim for, or what features it should have.
"To serve this, empowering or reinventing will be needed to upgrade the ICT [information communications technology]," he said, adding that the year may only be enough time to lay the foundations and the next government would need to carry out action plans and implement the task.
Pridiyathorn also said the government needed to resolve several weak points - not only in regard to fuel prices, so they reflect real costs - but other things in other sectors. However, the Energy Ministry was restructuring fuel prices.
In regard to taxes, he said he expected Thailand would not only be a regional hub of operating headquarters for multinational firms, but should focus on becoming a hub of international operating headquarters instead. But that would be tied to no taxes.
Lastly, Pridiyathorn said the government would focus more on "out-bound" investment promotion to help Thai companies expand their businesses broad. Though lacking Board of Investment support, he said that many Thai companies have spread to most of the Asean markets.
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