Thailand anxiously awaits decrees' ratification

Thailand anxiously awaits decrees' ratification

BANGKOK (Reuters): The Thai government is anxiously awaiting ratification of four controversial financial decrees in parliament today to arm itself with more powers to speedily resuscitate the comatose economy.

The lower House of Representatives is expected to meet today for a special sitting to ratify the urgent decrees following a constitutional court ruling on Saturday that the decrees approved by the cabinet of premier Chuan Leekpai last month were legal.

The ratification will empower the government to raise US$18 billion in foreign and domestic bonds, raise its foreign borrowing ceiling, enable it to undertake much-needed financial reforms and break a severe domestic liquidity squeeze.

They need to be ratified quickly so that the cabinet at its weekly meeting tomorrow will be in a position to incorporate them into a fourth letter of intent to be agreed with the International Monetary Fund.

The letter, which is to be presented to the IMF board on June 10, would enable the disbursement of another $800 million from the $17.2 billion bail-out package.

"We hope the decrees will be voted today, but whether there will be another political accident again tomorrow is yet to be seen," said premier Chuan.

The opposition, which has said it accepts the court's ruling on the decrees, said the decrees helped the business elite at the expense of taxpayers and the poor.

Analysts and businessmen said the government's problems in getting the decrees ratified signaled the start of an uphill battle in coming months as the economic crisis deepened, bringing higher unemployment and corporate bankruptcies.

The analysts said that the government would have to spend time and effort in explaining to the public that the measures, which involved hefty borrowing, were not engineered to save the rich at the expense of the poor.

"I think the government is taking the right steps in addressing the problem," said Somphob Manarangsan, an economic professor at Chulalongkorn University.

"But it has done a terribly poor job in informing the poor and the unprivileged about the cost and returns on these measures and on how these painful steps can help these people," he said.

Analysts also said a most valuable lesson learnt from the latest controversy over the decrees was that the government needed to be more in touch with the masses.

Prominent social critic Thirayuth Boonmee sparked an intense public debate this week when he criticized the government's plan to use some of the money raised to finance bailouts of failed financial institutions.

Thailand's worst financial turmoil in decades forced the closure of 56 debt-ridden finance firms last year. This week the central bank took over another seven ailing finance firms.

Earlier this year, the Bank of Thailand also nationalized four insolvent commercial banks, raising broad public suspicion that taxpayers' money would be used to shoulder private debt burdens.

Premier Chuan denied the allegations by critics.

"I would like to stress that we are not giving priority to the rich. We are not helping the rich but trying to make the business sector survive so that they can retain their employees," he said.