Publication date: 15-03-2013
Thai experts of the financial and economic criticized yesterday the populist politics of the Government Yingluck say it will be the level of bad debts surge to an unacceptable level.
They spoke at a seminar on the impact of the policy on the country economy, finance and tax budget. The seminar was organized by the Supervisory Board of the Finance of the Senate and banking and financial institutions yesterday.
MR Pridiyathorn Devakula, former Deputy Prime Minister and Minister of finance said that the level of public debt to increase to about 60 percent of the gross domestic product (GDP) was strongly expected and may even hit the 80-per-cent level in 2019 if the Government continued to pursue populist policies to its political goal.
' I have high concerns about some populist policies, that are not integral to the fundamental question of the country fit like a big burden on the Government they will in the long run, "said Pridiyathorn.
He called the pledging scheme rice, which had carried out in fiscal 2004-5 to 2011-12, and caused a net loss of 189.14 billion baht (US $ 6.3 billion).
The Government, however, has decided to continue this measure pledging rice for this financial year as one of its long-term policy.
"We estimate that if the Government pledge to fiscal 2018-19 rice its policy, the Government continues to 1.47 trillion baht will lose. This will surge the level of public debt in the future, "he said.
Meanwhile, Nipon Poapongsakorn, senior fellow at the Thailand Development Research Institute (TDRI), said the Government had avoided the use of the budget but contingent liability used instead.
"If the Government is more concerned with his populist policy to support investment projects, it would have to of the sources of the Fund and generate income to cover the expenditure.
It's a matter of fiscal discipline and managing the country for sustainable growth, "he said.
Korbsak Phutrakul, executive vice president at Bangkok Bank, said that the country's public debt level greatly improved by 36 percent of GDP in 2008 to 44 percent last year.
Although the relationship still at an acceptable level, there were negative signs of the increasing steep if the Government launches more populist projects that the public debt would accumulate. Driven by populist policy, the country government debt level are expected to be nearly 80 percent of GDP in the next five or six years from now.
Thirachai Phuvanatnaranubala, the former Finance Minister said that the country has a law of the country manage public debt by limiting the use of the Government budget for such populist policy.
Such a law would require the Government to explain to the public the source of funding for the populist campaigns. The Parliament would also have the power to check the Government income and expenditure of populist campaigns similar to the fiscal Cliff act of the us.
Au-Ari Unjanil, lecturer at the Law Faculty of Chulalongkorn University, agreed on the need to have a law for the management of the public debt.
The current constitutional law category 8 has already been made to the Government financial and budget control.
* US $ 1 = 26.9 baht
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