Thai targets longer-term economic reforms

NCPO's economic measures endorsed between May 22 and June 22.

Boosting domestic spending by paying off rice farmers to the tune of Bt92 billion (S$3.5 billion), expediting state spending, and extending the current rates of value-added and corporate income tax are among the economic measures carried out by the National Council for Peace and Order (NCPO) in the first month after the May 22 coup.

The next step is to reform the country's economic system by focusing on medium-to-long-term policy.

This includes finalising the 2014-15 state budget to the tune of Bt2.6 trillion, considering an investment budget of Bt2.4 trillion, tax structure, agricultural policy, promoting foreign direct investment, and energy-policy reform.

"We have more issues to deal with in the economic sector that relate to financial institutions, energy, agriculture, infrastructure, and others. Short-, medium- and long-term plans are to be finalised this month," Air Chief Marshal Prajin Juntong, the junta's chief of economic affairs, said after meeting with all government economic agencies.

After solving urgent problems such as paying farmers owed under the pledging programme, capping the prices of diesel fuel and liquefied petroleum gas, and expediting the disbursement of the 2013-14 state budget, Prajin also has to finalise 10 economic policies for the medium to long term.

These are:

1 State spending does not exceed the initial budget, maintain financial discipline and prevent increasing public debt;

2 Revive the confidence of foreign and domestic investors;

3 Proceed with delayed projects under the 2014 budget;

4 Projects that have legality issues will be re-prioritised based on their importance to the economy, such as the ousted democratic government's proposed Bt2.4-trillion mega-project for logistics systems and Bt350-billion water-management programme;

5 Consider special projects such as promotion of border trade for small and medium-sized enterprises;

6 The economic plans will adhere to rules and regulations of financial discipline, the capital market and registered companies;

7 Set up a private-sector fund to lower public investment;

8 Modernise state enterprises;

9 Achieve energy stability;

10 Economic plans will be based on transparency.

The main idea is to construct a road map towards sustainable economic growth that avoids populist policies, which the junta believes are harmful in the long run.

For example, the NCPO will assist farmers by lowering their production costs rather than guaranteeing the prices of their crops.

Farmers have to manage their costs and adhere to market prices, according to General Chatchai Sarikalya, assistant army chief and deputy chief of the NCPO supervising economic affairs.

The goals of the economic road map are to achieve financial discipline, promote renewable energy, develop basic infrastructure and make Thailand one of the leaders in the ASEAN Community.

The road map is to be followed by the new government the military plans to appoint in September.