Pattaya Daily News

09 February 2008 :: 11:02:44 am 29192

No Honeymoon Period for The New Finance Minister

BANGKOK, Feb 8 Thailand's new coalition government will present its policy package to members of the House of Representatives or Lower House on February 18, Deputy Prime Minister Surapong Suebwonglee said Friday.
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Mr. Surapong, also finance minister, said the government which took office Thursday would use its budget expenditure, monetary and fiscal policies, and plans to boost confidence of local and foreign investors to jump start the Thai economy.

The 36-member Cabinet has appointed Somchai Wongsawat, deputy prime minister and also education minister, to chair a committee assigned to draft the government’s policy, said Mr. Surapong.

Mr. Somchai will work closely with key ministers and discuss with senior officials of the National Economic and Social Development Board, Budget Bureau and related government agencies in drafting the policy which concerns with social, economic, security, environment and ways to boost democratic system in the country, he said.

Mr. Surapong said the sufficiency economy philosophy initiated by His Majesty the King remains vital part of the new government’s policy.

Business leaders Thursday pressed Thailand’s new finance minister, Surapong Suebwonglee, for an economic stimulus package to boost the kingdom’s economy, which fell into the doldrums under military rule.

Surapong, one of the closest allies of deposed premier Thaksin Shinawatra, took the job on Wednesday after King Bhumibol Adulyadej approved newly elected Prime Minister Samak Sundaravej’s cabinet.

Bolstering the economy is one of the top priorities for the Samak government, which succeeded Thailand’s army-installed regime after winning December polls, the first since the 2006 coup ousting Thaksin.
Adisak Rohitasune, vice chairman of the Federation of Thai Industries, the kingdom’s largest business group, said Surapong should use stimulus measures including tax cuts to shore up sagging domestic consumption.

“His first duty is to stimulate local demand,” Adisak said, as Thai consumer confidence was hovering around five-year lows due to political woes under military rule and a series of policy miscues by the military.

The economy grew just 4.8 percent in 2007, ranking among the lowest in Southeast Asia, and business leaders were worried exports, the only silver lining for growth, could stagnate this year due to a slowing US economy. Promon Suthiwong, chairman of Board of Trade, a major business group, said Surapong, a 50-

year-old medical professor-turned-politician, should act fast to strengthen domestic demand to offset an expected slump in exports.

“There is no honeymoon period for him. He has to prove himself very quickly,” Promon said, adding the incoming finance minister must heavily rely on a team of experts due to his total lack of financial background.

“He should help small and mid-sized businesses and launch job-creation programmes. Last year the Thai economy grew mainly due to exports, but this year our exports could fall due to the state of the US economy,” Promon said.

Exports account for more than 60 percent of the Thai economy, and the United States, which is under the shadow of a recession, is the kingdom’s largest trading partner.

Adisak also urged Surapong to keep stringent capital controls, imposed by the previous military government, in a bid to rein in the Thai baht, which is at 10-year-highs against the dollar.

“The strong baht is a major issue for exporters. Surapong must maintain the currency rules because there are no alternatives yet to control the volatile baht,” he said.

Chai Chirasevenupraphand, a market strategist at Capital Nomura Securities, also said the new government should scrap proposed changes to the Foreign Business Act, a controversial bill to tighten foreign investment, which was among the most contentious economic policies of the military government.

And Vallop Tiasiri, president of the Thai Automotive Institute, a state-funded agency to promote the auto industry, said Surapong should kick start a multi-billion-dollar public works project, which was launched by Thaksin but put on hold after the coup, to increase investment and jobs.

“It will stimulate investment and help restore business confidence in Thailand,” Vallop said, referring to the public works scheme.

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FINANCE MINISTRY TEAMS PLAN TO CONTROL FOREIGN CAPITAL FLOWS

The Finance Ministry is preparing a contingency plan to rein in irregularities in foreign capital inflows and outflows within five months and propose it to the new finance minister for consideration.

Speaking after chairing a meeting of the committee tasked to formulate the policy and take control of foreign capital movements, Permanent Secretary for Finance Suparat Kawatkul said an approach to coping with the foreign capital inflow and outflow volatility in the medium- and long terms of three to five years was raised for discussion.

The meeting concluded that the contingency plan to oversee foreign capital inflows and outflows would be worked out within five months and proposed to the new finance minister for consideration in due course, he said.

Pannee Sathavarodom, director-general of the Fiscal Policy Office, said many parties concerned had discussed ways to supervise the foreign capital movement in various venues.

The committee was set up to liaise with all parties concerned to ensure the capital movement is supervised in the same direction.

She revealed the meeting agreed to set up two working committees to map out the contingency plan and the 5-year term scheme to rein in the possible rapid capital influx.

A ministry source said mounting fears of economic recession in the United States had fuelled the foreign capital inflow into Asian countries including Thailand.

Reactions to the fears bolstered the Thai baht quickly by 2.34 per cent, following the Japanese yen and Malaysian ringgit.

The latest figures shows that foreign capital had flowed into Thailand in an amount of some Bt 28.8 billion since December 28 last year.

Reporter : PDN staff   Photo : Internet   Category : Politics News

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