Can Thai Rak Thai reverse economic policies?<\/p>\n
By Thanong Khanthong<\/p>\n
BANGKOK: CAN the Thai Rak Thai Party reverse the key economic
\npolicies implemented by the Democrats if it wins the next
\nelection? Kitti Limsakul, an adviser to Thai Rak Thai, believes
\nso. He accuses the Democrats of mishandling the management of the
\neconomy, which has led to the sluggish recovery. If elected to
\nform the next government, \"we'll reverse all the key economic
\npolicies of the Democrats,\" says Kitti, who is also an economics
\nprofessor at Chulalongkorn University.<\/p>\n
It is easy to shadow box and punch the sandbag. But once in
\nthe ring, you're facing a moving opponent, who can hurt you. The
\nanalogy is that any new government coming into office will at
\nonce be confronted with myriad problems, so that it becomes a
\nsitting target, fully exposed to the public eye and susceptible
\nto political attacks. The government is not operating out of thin
\nair; it functions within political institutions and bureaucratic
\nprocedures. It has to observe international obligations and
\npractices.<\/p>\n
It is doubtful that Thai Rak Thai can undo the legacies of
\nfinancial and economic reforms put in place by the Democrats.
\nPrime Minister Chuan Leekpai appeared to ridicule the Thai Rak
\nThai Party in his speech to the Annual Economic Review Forum on
\nWednesday. \"What the present government has been doing in the
\npast two years is something unavoidable, whoever is in charge,\"
\nhe said. \"Any change in policy by the next government would be
\nconsidered a backward move.\"<\/p>\n
Only a man of Virabongsa Ramangkura's stature or a man of
\nEkamol Khiriwat's temperament has the intellectual might to
\nchallenge the economic orthodoxy of the International Monetary
\nFund. But it does not necessarily follow that their unorthodoxy
\ncan be prescribed and implemented under the present political and
\ncultural conditions. Then how can we be sure who gets the right
\nfix?<\/p>\n
The four institutions behind Thailand's economic policy
\nmanagement are the National Economic and Social Development
\nBoard, the Budget Bureau, the Fiscal Policy Office and the Bank
\nof Thailand. All of these institutions are conservative; they
\nmight err or be inefficient, but they have the data. More
\nimportantly, they are there, existing as part of the government
\napparatus to serve the Cabinet, the super-body of the executive
\nbranch.<\/p>\n
For this reason, it is rather convenient to criticize from the
\noutside that the government has mismanaged the Thai economy or
\nthat it has led Thailand on a wrong track. But once you're part
\nof the government apparatus, you're constrained by the
\nbureaucratic rules and the prevailing policy wisdom of the day.
\nFor better or for worse, the Democrats, aided by the four
\nfinancial institutions, have led the country through the
\ntumultuous course of stabilization, reform and recovery. It is
\nfar from perfect, but along the way the policies have been
\nadjusted to suit the market conditions.<\/p>\n
Last week, Ammar Siamwalla, the respected economist, raised
\nhis doubts yet again about the mountain of debt load in the
\ncountry. \"Before we heard that the debtors made a default. Now it
\nhas reached a point that the creditors are defaulting too,\" he
\nsaid.<\/p>\n
Thailand's foremost problem lies in the banking sector and the
\nindebtedness of its corporate sector. That is why the economic
\nrecovery remains in doubt because the banks have not yet been
\nfixed. Ammar sympathized with Finance Minister Tarrin
\nNimmanahaeminda over his cause to salvage the banking system,
\nthough he personally believed that the finance minister could
\nhave taken over the entire banking system and then set forth to
\nseparate the banks into the good and the bad.<\/p>\n
Still, it is difficult to say which would have been the most
\ncost-effective way to tackle the banking system in the middle of
\nthe crisis. For sure, Tarrin could have cleaned up the banking
\nsystem in one swoop. But did political conditions allow him to do
\nso with a free hand? When he told a banking analyst from Goldman
\nSachs that the Bangkok Bank was the biggest threat to the banking
\nsystem in 1999, he came under a hail of political attack.<\/p>\n
So instead of producing a sweeping banking reform, Tarrin has
\ncome up with a market-oriented approach and a mixture of bank
\nclosures, mergers and government-sponsored recapitalisation
\nschemes.<\/p>\n
The Thai Rak Thai Party would like to nationalize the bad
\ndebts in the banking system, but it might be too late. The only
\nchallenge for Thailand ahead is to accelerate corporate debt
\nrestructuring and banking recapitalisation and to improve the
\ncompetitiveness of the entire corporate sector. These measures
\nare micro, hamstrung by Thailand's weak institutions.<\/p>\n
Whoever comes into office will face exactly the same problems.<\/p>\n
-- The Nation \/ Asia News Network<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/can-thai-rak-thai-reverse-economic-policies-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }