Opposition to censure Thai govt for ‘botched recovery’, ‘vaccine

The government’s handling of economic problems worsened by the COVID-19 pandemic is expected to be the core of the no-confidence debate starting on Tuesday (Feb 16).

Opposition MPs are poised to accuse Prime Minister Prayut Chan-o-cha and other nine Cabinet members of mismanagement that has led to economic disaster.

The opposition’s main focus will be on the government’s “slow response” to the economic crisis and its failure to obtain vaccines earlier, resulting in prolonged economic pain.

The opposition is sure to highlight criticism of “unfair and insufficient” government aid to people impacted by the pandemic.

As well as Prayut, the other ministers being targeted are Deputy PM Prawit Wongsuwan, Public Health Minister Anutin Charnvirakul, Commerce Minister Jurin Laksanawisit, Labour Minister Suchart Chomklin, Interior Minister Anupong Paochinda, Deputy Interior Minister Nipon Bunyamanee, Education Minister Nataphol Teepsuwan, Transport Minister Saksayam Chidchob and Deputy Agriculture Minister Thammanat Promprao.

Has this govt worsened the economy?

Prior to the COVID-induced crisis, Thailand’s economy was already suffering slow growth and huge income inequality.

The emergence of COVID-19 early last year has worsened economic conditions and partly fuelled youth-led protests against the government and the establishment.

Protesters have raised questions of national budget allocation and accuse the government of prioritising purchases of military hardware. Meanwhile, the government has provided little support to people and businesses suffering from the virus fallout, they said.

In response to the economic downturn, the government implemented relief and economic stimulus packages last year.

However, a new wave of virus infections that emerged late last year has disrupted economic recovery and adversely impacted a large number of people.

Against this backdrop, the government is now extending previous aid packages and launching new ones. These include soft loans to businesses and individuals, co-payment of necessities bought by consumers, a domestic travel subsidy, and monetary handouts to the self-employed and employees.

The total cost of economic rescue efforts since COVID-19 first emerged is estimated to be Bt2.3 trillion, or 14.5 per cent of GDP.

However, critics view this amount as inadequate given the severe impact of shutdown restrictions.

Lae Dilokvidhyarat, an economist at Chulalongkorn University, suggested that the Thai government should learn from Germany and Scandinavian countries such as Denmark, where governments pay 75 per cent of employees’ salaries while employers are responsible for just 25 per cent. This can save jobs and people incomes, he said.

Although public debt is rising, the Thai government’s fiscal position is manageable since public debt remains below 60 per cent of GDP, so there is plenty of room to provide more aid to people and workers, Lae argued.

“The financial aid is not government money but future taxpayer’s money that can be collected when the economy recovers,” he noted.

Somchai Jitsuchon, economic adviser to Prayut, acknowledged that a large number of people have been impacted but added that government spending to address the economic issues faces many constraints.

For example, the Bt400-billion effort to finance economic recovery projects is making slow progress due to strict conditions attached. The government has not yet implemented wage subsidies to help employers retain their workers, he lamented.

People suffering income loss

According to the National Statistical Office (NSO), the number of people employed was 38.7 million in December last year, up 1.1 per cent from the same month of 2019. Of these, 17.5 million worked in services and trade, 13.48 million in agriculture, and 7.78 million in manufacturing.

Unemployed people numbered 590,000, up from 370,000 in the same month in 2019. The unemployment rate was 1.5 per cent. Unemployment was high among new graduates, younger people and the highly educated.

Overall, employment had risen to pre-COVID levels, but working hours had fallen from 42.9 to 42.5 hours per week in December 2019, according to NSO data.

Meanwhile, the Bank of Thailand says that three groups – the self-employed, low-income workers and workers in tourism – have less of a cushion against income shocks than other groups as they were severely hit by the first wave of infections. These groups had not yet recovered from the first wave when the new wave struck.

Meanwhile, combined income of the self-employed outside the farm sector was more than 5 per cent down year on year in the fourth quarter last year, says the central bank.

Recovery dependent on vaccine availability

A large section of the public has expressed confusion and dissatisfaction with the government’s delay in sourcing vaccines.

Expectations of a faster economic recovery have disappeared as Thailand failed to obtain vaccines while other countries are already implementing mass inoculation. The vaccination delay means further delays for recovery of tourism, on which a large number of Thai businesses and people depend.

Many research houses have lowered their economic growth projections for this year over concerns of the lingering outbreak and vaccination delays. The Bank of Thailand has cut its projection of 2021 GDP growth from 3.6 per cent to 3.2 per cent, while CIMB Bank Thai has lowered its forecast from 4.1 per cent to 2.6 per cent.

Many people have also accused the government of politicising vaccine arrangements, leading to a delay in vaccine availability. This may be the weak point that the government will find hardest to defend during Tuesday’s censure debate.

Controversial infrastructure projects

A few days ahead of the censure debate, the Bangkok Metropolitan Administration under the Interior Ministry delayed its plan to hike the maximum Skytrain fare to Bt104. The delayed fare hike has been seen as a government effort to ease political pressure ahead of the no-confidence debate.

A dispute over extending the concession contract between the BMA and the Skytrain operator also stirred public suspicion that a “sweet deal” was being made between politicians and a well-connected private company.

Meanwhile, the recent abrupt cancellation of the bidding process for construction of the Bt120-billion Orange Line in Bangkok has also sparked suspicion of rival interested groups in the ruling coalition, with the Palang Pracharath and Bhumjaithai parties thought to be racing to win the bidding.

Critics also want the censure debate to shed light on the controversial Phase 2 expansion of Suvarnabhumi Airport.

“The public has questioned the transparency of these infrastructure projects,” said Mana Nimitmongkol, secretary-general of the Anti-Corruption Organisation of Thailand (ACT).

Public perception of corruption is not improving. Thailand fell three places in the annual Corruption Perceptions Index (CPI) for 2020, according to Transparency International. The country ranked 104th in 2020 among 180 countries surveyed, down from 101st a year earlier, with an overall score of 36 out of 100.

 

Source: Thai Public Broadcasting Service (Thai PBS)

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