New economic czar prepares stimulus for growth

Deputy Prime Minister Somkid Jatusripitak, Thailand’s new economic czar, is preparing a stimulus package with initial measures to help farmers and low-income earners who have borne the brunt of slow economic growth, as Prime Minister Prayut Chan-o-cha set a three-month deadline for his new economic team to produce positive results.

The fundamentals of Thailand’s economy were still strong, Somkid insisted, and weak growth and declining exports were mainly the result of external factors whose effects will be short term.

Low commodities prices were hurting farmers and other low-income groups, deterring them from spending and having negative ripple effects upon investment. The deputy prime minister shared his assessment with leading members of the local and foreign business communities during his first public speaking engagement since his appointment this month.

He said he would propose a pump-priming package next week to the Cabinet that would include re-injecting money into the Village Fund – a micro-credit program originally launched in 2001 – and other initiatives to speed up implementation of government projects that create jobs in the provinces. This approach will increase purchasing power and consumption, which will help raise business confidence within months, he said. It will also involve more support to small- and medium -size enterprises, and enhancing competitiveness and value in a range of Thai products.

Somkid’s ideas were well received by the business community. “This speech meant a lot to us. We need to be more confident about the domestic economy reviving as soon as possible,’’ said Supant Mongkolsuthree, chairman of the Federation of Thai Industries.

Somkid and his team are under pressure from Prime Minister Prayut Chan-o-cha to show results as quickly as possible. The Prime Minister told his new economic czar that he must show substantial results within the three months. “The prime minister told [the cabinet] that time is running out, and three months from now people must start to see positive changes,’’ said Government Spokesman Sansern Kaewkamnerd.

To give Somkid even more authority over the economy, Prime Minister Prayut last week placed foreign affairs under Somkid’s portfolio, reasoning that this will make it easier to coordinate policies that will strengthen the Kingdom’s export-led economy.

Somkid will now supervise the Finance Ministry, the Foreign Ministry, the Agriculture Ministry, the Transport Ministry, the Commerce Ministry, the Science Ministry and the Industry Ministry.

 

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Thailand Focus August 31st, 2015
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