Published on May 17, 2008
Survey shows that despite its election bluster, the government has done little to boost the economy
The latest survey from the University of the Thai Chamber of Commerce (UTCC) should provide a wake-up call for the government on the urgent need for it to fix the economy. Economists and critics have over the past month been warning the government about its failure to focus on the most pressing issue of all - the economy. But this warning has apparently gone unheeded. Over the past month, we saw the government indulge in political bickering and power plays instead of tackling inflation and boosting consumers' confidence.
The People Power Party won the majority of the votes in the December 23 election, with the party's key members saying they would turn the economy around. The international press welcomed the People Power Party's announcement, and expected that the party would soon restore investor confidence and implement liberal economic policies to mark a departure from the era of military rule.
However, the latest survey from the UTCC, released on Thursday, showed that investors, especially international investors, were still reluctant to launch business projects here due to the protracted political and investment uncertainties.
Nandor Von der Luehe, chairman of the Joint Foreign Chambers of Commerce, said that foreign investors had regained confidence in the wake of last December's election. However, political stability appeared to be short-lived due to the increased uncertainties surrounding the Samak government.
Dusit Nonthanakorn, an executive member of the Thai Chamber of Commerce, said most of the survey's respondents said that political uncertainty poses the most serious threat to the economy. Such uncertainty dampens the positive fundamentals of the Thai economy, such as its desirability as a place to live. The survey showed that Thailand scored 7 in terms of its liveability, compared to Malaysia with 6.1, Singapore at 6.6 and Vietnam, which scored 5.9.
Thailand scored only 6.2 in terms of its labour competitiveness, falling behind Singapore, which scored a 6.6. Vietnam is catching up fast with Thailand; it scored 6.1. Still, human-resources development has disappeared from the Samak government's agenda.
The government promised to create a friendly investment atmosphere for foreign investors by, for instance, accelerating logistics projects, opening up the economy and amending the Foreign Business Act so that it is more welcoming to foreign investors. None of these measures has materialised despite the party's overwhelming majority in the House.
Moreover, consumer confidence has dropped in all categories for the first time in six months due to recent increases in the price of oil, a higher cost of living in general and downbeat expectations over future incomes and the stability of the government.
This is despite the fact that some were upbeat about the government's stimulus package, which had a positive psychological impact in the short term. However, most respondents said they preferred to wait to see how the situation evolves in the next two to three months.
Over the past month, the government hasn't sent a clear signal that it will go ahead with its promises. Instead, we have seen political bickering day in day out. Other than that, the Samak government has persistently pushed issues that have unnecessarily created controversy, such as its planned amendment of the Constitution and its plan to tighten media control.
PM Office Minister Jakrapob Penkair earlier dismissed the criticism, saying that the government has worked to fix the economy but its efforts have gone noticed.
This time round, the survey from the UTCC should serve as a warning for the government that it should do a lot more.
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Survey shows that despite its election bluster, the government has done little to boost the economy
The latest survey from the University of the Thai Chamber of Commerce (UTCC) should provide a wake-up call for the government on the urgent need for it to fix the economy. Economists and critics have over the past month been warning the government about its failure to focus on the most pressing issue of all - the economy. But this warning has apparently gone unheeded. Over the past month, we saw the government indulge in political bickering and power plays instead of tackling inflation and boosting consumers' confidence.
The People Power Party won the majority of the votes in the December 23 election, with the party's key members saying they would turn the economy around. The international press welcomed the People Power Party's announcement, and expected that the party would soon restore investor confidence and implement liberal economic policies to mark a departure from the era of military rule.
However, the latest survey from the UTCC, released on Thursday, showed that investors, especially international investors, were still reluctant to launch business projects here due to the protracted political and investment uncertainties.
Nandor Von der Luehe, chairman of the Joint Foreign Chambers of Commerce, said that foreign investors had regained confidence in the wake of last December's election. However, political stability appeared to be short-lived due to the increased uncertainties surrounding the Samak government.
Dusit Nonthanakorn, an executive member of the Thai Chamber of Commerce, said most of the survey's respondents said that political uncertainty poses the most serious threat to the economy. Such uncertainty dampens the positive fundamentals of the Thai economy, such as its desirability as a place to live. The survey showed that Thailand scored 7 in terms of its liveability, compared to Malaysia with 6.1, Singapore at 6.6 and Vietnam, which scored 5.9.
Thailand scored only 6.2 in terms of its labour competitiveness, falling behind Singapore, which scored a 6.6. Vietnam is catching up fast with Thailand; it scored 6.1. Still, human-resources development has disappeared from the Samak government's agenda.
The government promised to create a friendly investment atmosphere for foreign investors by, for instance, accelerating logistics projects, opening up the economy and amending the Foreign Business Act so that it is more welcoming to foreign investors. None of these measures has materialised despite the party's overwhelming majority in the House.
Moreover, consumer confidence has dropped in all categories for the first time in six months due to recent increases in the price of oil, a higher cost of living in general and downbeat expectations over future incomes and the stability of the government.
This is despite the fact that some were upbeat about the government's stimulus package, which had a positive psychological impact in the short term. However, most respondents said they preferred to wait to see how the situation evolves in the next two to three months.
Over the past month, the government hasn't sent a clear signal that it will go ahead with its promises. Instead, we have seen political bickering day in day out. Other than that, the Samak government has persistently pushed issues that have unnecessarily created controversy, such as its planned amendment of the Constitution and its plan to tighten media control.
PM Office Minister Jakrapob Penkair earlier dismissed the criticism, saying that the government has worked to fix the economy but its efforts have gone noticed.
This time round, the survey from the UTCC should serve as a warning for the government that it should do a lot more.
Discuss
Add this link to...
Tell a friend
Bury
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