Economics Analysis by Pukky: Nopdon Aces Government Policy-But!By Terence Chulavachana Sep 26, 2008 12:00AM UTC
p>8.38-The Somchai government policy at least is right on the money, but supporting details are needed badly.
Nopdol, the former Foreign Minister who resigned in disgrace over the Khmer Relics Problems, and now a think-tank of drawing up the government policy, says the government will put a priority on the peace process with the PAD, protect and promote democracy, living conditions of Thais, gaining back foreign confidence, and tourism-those are the short-term priority of the Somchai government.
That priority, says Nopdol, is followed by a stress on better education for increased skills, increased agricultural productivity, on reducing energy consumption with better logistics, get mega-projects development off the ground, and attracting foreign investment.
Yet Nopdol said something alarming, and that is that Thailand isn’t greatly impacted by the Wall Street crisis, and if looking at the priorities and supporting points of Nopdol’s policy statements, there is nothing on preparing Thailand for the fall-out of Wall Street.
Yet it is clear, that while direct impact may not be as severe as expected as the Thai stock, bond and money markets were able to absorbed much of the ripple, but in-directly, the impact might be great.
Already UNTAD, Supachai, says that the Wall Street crisis may reduce global trade by as much as 30%-Thailand’s GDP is greatly dependent on global trade.
Already, the world has overnight, changed from a tight monetary stance to combat inflation, to one of relaxed monetary stance to head off a liquidity crunch-Thailand’s monetary policy is torn apart between what politician wants and what the central bank wants.
Already, commodity prices such as oil and gold are gyrating wildly-and Thailand is an oil hungry nation and the jewelry export industry is a major one for Thais.
While Nopdol may be thinking of the macro picture with his policy-and some of it may solve the Wall Styreet crisis indirectly-those that have to work out the everyday running of Thailand-like civil servants, are waiting for detailed directions and measures. But after months and years of ineffectual government, some civil servants aren’t waiting for the government to come around any more, and are going ahead with getting Thailand off the ground.
For example, the Ministry of Commerce says it will proposed to the minister, that Thailand focus heavily on China, as a replacement for the evaporating US market. Then the ICT Ministry says it will push for 3G, to get Thailand’s communication infrastructure on par with more advanced countries. Then BOI is seeking to identify new industries used to attract foreign investors like up-stream steel plants and eco-car. Then the economics department of the Finance Ministry is cooking up a major revamp of Thailand’s tax codes. And the Tourism people, are planning major public relations campaign to get Thailand’s popular again with foreign travelers.
All of that will help reduce the impact from the Wall Street crisis, particularly the expected slow-down of the US, hurting capital flowing into Thailand-better tax, BOI policy, tourism focus and new markets to even a better telecom infrastruicture are all money pulling events.
So if all goes well, the Somchai government might have the time to actually do something about solving Thailand’s many problems. But from the looks of it, even if the policy falls a bit short, there are still others who are keen on following through with giving help to the government. Like we say, looks like Nopdol had ace the government’s policy-just a bit short that is all.