Thailand may be forced 'to seek IMF leniency'<\/p>\n
BANGKOK (AFP): Premier Chuan Leekpai warns that Thailand may
\nbe forced to ask the IMF to relax the terms of its rescue package
\nas the economic slump further erodes state revenues.<\/p>\n
Chuan, who has been in power less than two months, admitted
\nthat the economic crisis confronting his government was worse
\nthan he had anticipated when he took office.<\/p>\n
\"The government might ask the International Monetary Fund
\n(IMF) to ease its bailout package requirements, particularly that
\nthere be a surplus budget for fiscal 1997-98,\" Chuan said in an
\ninterview with the Bangkok Post.<\/p>\n
He said such a request could come after the IMF releases the
\nlast installment of its portion of the $17.2 billion rescue
\npackage in February.<\/p>\n
\"To make such demands before the money was handed over might
\nlead to the IMF refusing to release it, damaging Thailand,\" the
\npaper said. \"It might also send the wrong message to other Asian
\ncountries borrowing from the IMF.\"<\/p>\n
Bangkok must achieve a budget surplus of one percent of gross
\ndomestic product in fiscal 1997-98 under the IMF bailout, which
\nChuan and his economic \"dream team\" have vowed to respect.<\/p>\n
But while Chuan said Bangkok would do its best to meet the IMF
\ntargets, he admitted that the goal was becoming more difficult as
\nthe economic climate worsened.<\/p>\n
Adherence to the IMF targets has been seen as crucial to
\nattempts to restore waning confidence in Thailand's embattled
\neconomy.<\/p>\n
Chuan warned Thais they may be in for even harder times in the
\nform of tax increases to make up for dwindling state revenue.<\/p>\n
He said his \"biggest concern was that the government may not
\nbe able to collect enough revenue to meet expenditure,\" despite a
\nround of three budget cuts which shaved 182 billion baht ($3.9
\nbillion) off the budget for the current fiscal year starting
\nlast September.<\/p>\n
\"I would like to tell the people straight that, despite best
\nefforts to increase revenue and to cut spending, if there is
\nstill a revenue shortfall then it might be necessary to have a
\ntax increase,\" he said.<\/p>\n
Reining in public spending as tax revenues drop has been the
\nmainstay of government budgetary policy. But the budget is
\nalready pared to the bone to the extent that medium-term economic
\ngrowth could be jeopardized.<\/p>\n
The premier conceded that balancing the 800 billion baht ($17
\nbillion) budget was \"virtually impossible, let alone having a
\nsurplus of some 70 billion baht.\"<\/p>\n
While conceding that the economy was in worse shape than he
\nhad expected when he was appointed last month, Chuan said the
\n\"most shocking thing is about the revenue.\"<\/p>\n
The prime minister also expressed doubts over whether South
\nKorea would be able to make good its pledge to lend Thailand $500
\nmillion as part of the IMF deal. Seoul itself has since been
\nforced to accept a $60 billion bailout.<\/p>\n
He said Indonesia, which had earlier pledged to contribute to
\nthe Thai bailout, had problems which had forced it to seek its
\nown rescue package.<\/p>\n
But the prime minister was optimistic about the future of the
\nfloundering baht, saying the current level was \"unrealistically
\nlow.\"<\/p>\n
The baht, which has lost more than 46 percent of its value
\nagainst the dollar since its shock flotation on July 2, is now
\nhovering around the 47 to the dollar mark onshore.<\/p>\n
Lobby -- Page 11<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/thailand-may-be-forced-to-seek-imf-leniency-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }