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Spending on public works scaled down THE Cabinet yesterday moved to scale back infrastructure spending approved by the previous Chuan administration by reallocating Bt10.7 billion from the Bt910-billion budget for the fiscal year ending in September. Further budget reallocations may bring the total to Bt30 billion or Bt40 billion, Finance Minister Somkid Jatusripitak said. The Cabinet`s decision, however, will have negative implications for the growth of the Thai economy since infrastructure spending is part of public-sector investment, which is crucial to stimulate the economy. Already big construction companies from Ch Karnchang to Italian-Thai Development Corp have been feeling the squeeze from the government budget cutbacks. Plew Trivisavavej, president of Ch Karnchang, said: "Our earnings are likely to be adjusted downward from the budget cutback. We are trying to bid for construction projects elsewhere than in the public sector." A spokesman for Italian-Thai Development said: "The government`s cutback on infrastructure spending has led the company to delay its debt-restructuring owing to falling cash flow from government projects." Chaturon Chaisang, PM`s Office Minister overseeing the Budget Bureau, said the freed-up funds would be used to finance projects planned by the new government. He did not say where the cuts would come from, but the Budget Bureau earlier indicated that some construction projects planned by the previous administration would be scrapped. During a debate on the government`s policy statement last month, Tarrin Nimmanahaeminda, a Democrat MP and ex-finance minister, warned of the economic risks associated with scaling back infrastructure spending. At a time of weakening demand at home and abroad, the government should either proceed with infrastructure spending to stimulate the domestic economy or come up with additional stimulus measures, Tarrin suggested. With the bumpy landing of the US economy and the recession in Japan, there are fears that economic growth in Thailand would be drastically curtailed in the absence of an effective stimulus package. However, the government of Thaksin Shinawatra apparently has a different angle on stimulating the economy by reallocating infrastructure spending to grass-roots spending, a direction that reflects Thai Rak Thai`s policy platform. Somkid said that during yesterday`s Cabinet meeting Prime Minister Thaksin had urged ministers to cut unnecessary spending to secure funds to boost economic growth. He added that the US and Japanese slowdowns would have slight impact on Thailand`s economic growth if the country prepared itself well enough. He did not elaborate. He said the next fiscal year`s budget would focus on the country`s economic development, with emphasis on revenue-generating sectors such as exports and tourism. Somkid said the government would also restructure spending in the 2002 budget to ensure that the budget deficit was not higher than this year`s. The government has said the public deficit is not expected to exceed 2.5 per cent of gross domestic product. Deputy Finance Minister Varathep Ratanakorn said the budget for the fiscal year starting in October would be discussed at next week`s Cabinet meeting and a draft document should be ready for Cabinet approval in May. The Nation, Agencies 14.3.01 |
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| aus der Diskussion: | Waste or make money in Thailand |
| Autor (Datum des Eintrages): | BodyG (13.03.01 20:38:48) |
| Beitrag: | 518 von 611 (ID:3092705) |
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