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Steps being taken to pep up economy THE government is drawing up three quick-fix action plans to rev up key industries and curtail luxury imports as a rapidly deteriorating global economic environment threatens to send the economy into a tailspin even before the government`s populist policies have a chance to spin their magic. "We are worried about the economic situation," Prime Minister Thaksin Shinawatra admitted yesterday, adding that the weakening state of the world economy presented another major stumbling block for Thailand`s hopes of recovery. "The government is administering the country from a restricted position. We are trying to delay imports as long as we can in order to make the baht stable and at the same time we are also speeding up exports," Thaksin said as he announced plans for a deficit budget of about Bt200 billion for 2002. Realising the need to take immediate measures to stimulate the economy, the government would take three steps in the next three to four months to support the export, tourism and real-estate industries, Finance Minister Somkid Jatusripitak said yesterday. He added that taxes on luxury goods would be increased to reduce discretionary imports. Somkid`s announcement marks the first time that the Thaksin administration has to come to grips with the potentially sharp downturn of the Thai economy. So far, the government has been repeatedly arguing that its populist policies - mostly social spending that does not add new money into the economy - are good enough to stimulate growth. Somkid did not specify the measures to boost exports and tourism, but said they could be implemented after Thaksin had a chance to discuss them. Economists are worried that growth might slow to 2.5 to 4 per cent, given the economic slowdowns in the United States and Japan which are already reflected in profit warnings, the sharp tumble in stock markets and sluggish exports. The export slowdown is leading the National Economic and Social Development Board (NESDB) to adjust downward its forecast of economic growth this year from the current 4 to 4.5 per cent. "We`re still working on the data to determine the basis for our forecast this year," NESDB secretary-general Sansern Wonchaum said. He added that he was worried over the trade balance following a deficit in January of US$282 million (Bt12.3 billion). Since exports account for 40 per cent of gross domestic product, measures would be needed to stimulate domestic consumption to offset the falling growth in export revenue. But instead of accelerating public spending on infrastructure projects to create a powerful multiplier effect on the domestic economy, the Thaksin administration has done the reverse by scaling back budget spending to divert funds for its populist policies. The 4M policies - moratorium on farmers` debt, million baht fund for each village, medical visits for Bt30 and management company for banks` bad assets - are sound social spending in the long term but they cannot be pushed out timely enough to spur domestic consumption. On Tuesday, the Cabinet decided to scale back infrastructure spending by Bt10.7 billion for the time being and the administration has in mind to reverse some Bt30 billion to Bt40 billion of public spending in total in the fiscal 2001 budget ending September. Meanwhile, Somkid said that instead of establishing a new bank aimed at promoting small and medium-scale enterprises (SMEs), the government would use expanded versions of the state-owned Small Industrial Financial Corp (SIFC) and Small Industrial Credit Guarantee Corp (SICGC). Funnelling funds to liquidity-strapped SMEs, which are seen as the backbone of the Thai economy in the long term, is one of the government`s key economic policies. The finance minister said following a meeting with bank executives and Bank of Thailand Governor Chatu Mongol Sonakul late yesterday evening that the permanent secretaries of the finance and industry ministries would further work on the plan today. The SIFC was expected to step up lending to SMEs, while the SICGC would issue more guarantees of loans to SMEs including those in the construction and gas station businesses, Somkid said. The government would also urge private as well as state-owned venture capital funds to invest more in SMEs. The administration`s proposal to relax central bank regulations so that banks could extend more loans, particularly to SMEs, was also taken up at the meeting. Chulakorn Singhakowin, chairman of the Thai Bankers Association, said bankers generally agreed that current regulations were not obstacles for private banks to extend loans to SMEs. Banthoon Lamsam, president of Thai Farmers Bank, added that the central bank`s rules conform to international standards, so changing them would not help boost lending. The Nation, Agencies - 15.3.01 - |
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| aus der Diskussion: | Waste or make money in Thailand |
| Autor (Datum des Eintrages): | BodyG (14.03.01 20:00:03) |
| Beitrag: | 532 von 611 (ID:3101739) |
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