Government triples investment budget; WEF ranking rises

The taps will finally open on the flow of funds to upgrade and stimulate the economy next year as the cabinet of Prime Minister Prayut Chan-o-cha approved a combined investment budget of $59.4 billion for 55 state enterprises in 2018, up from $17.4 billion this year, with nearly half of the money intended for infrastructure that will help transform the Thai economy.

The World Economic Forum cited improvements in infrastructure as a factor in raising Thailand’s ranking in its annual Global Competitiveness Index last week. The Kingdom is now the world’s 32nd most competitive country, up from 34th last year. Government efforts to invest in infrastructure projects had borne fruit and investments by the private sector had also contributed to the rise in rank, said Pasu Decharin, dean of Chulalongkorn Business School, which is an official partner of the Forum.

To ensure that the effects of the new investment budget are maximized, the cabinet also passed a requirement that state enterprises disburse 95 percent of the budgeted funds within the 2018 fiscal year that starts in October. Economists and business groups had expressed some frustration with state enterprises and government agencies in recent years over the slow place of disbursing funds for infrastructure and other projects designed to stimulate economic growth.

Among the projects that will receive priority are a $541 million expansion of Suvarnabhumi airport, the $861 million upgrade of a natural gas pipeline, the $571 million construction of the eastern section of the Orange Line commuter rail line connecting Thailand Cultural Centre with the suburb Min Buri, and the Red Line connecting Bang Sue and Rangsit worth $532 million.

Of the $59.4 billion, nearly $24 billion is officially slated for infrastructure and logistics. The cabinet also set a goal of allocating a total of $62 billion for state enterprises to invest in infrastructure during 2019-21.

In addition to the requirement to spend the money during fiscal 2018, the cabinet also empowered the National Social and Economic Development Board (NESDB), the state’s planning agency, to review and adjust each state enterprise’s investment budget, with each state enterprise reporting to the board on its progress every fifth month.

Kobsak Phootrakul, assistant minister to the Prime Minister’s Office, said that state enterprises should use their investment funds on projects and programs that align with the NESDB’s 12th National Social and Economic Development Plan. The 12th national plan calls for developing human resources, reducing income disparity, strengthening the economy and competitiveness, promoting eco-friendly industries, ensuring national security, supporting science and technology and developing infrastructure and logistics.