Editorial 16 July 2013 : Takeoff Or Nosedive?

Weeks ago, Prime Minister
Yingluck Shinawatra called for various responsible for the county’s economic policies to discuss
about the economic downturn in the first half of 2013, after statistic showed that Thailand’s
economy grew less than expected.

What the statistic revealed was not very surprising, because
earlier this year, many factors have already shown signs of the economic stagnation. However, what
important is the government’s next step to improve the economic growth in the latter half of the
year.

The implication is that the government spending must be invested into long term and
sustainable developments, rather than on something less productive.  

According to
fundamental economic theory, factors controlling the expansion or the stagnation of the nation
economy are household spending, investment from private sector, government spending, export and
import.

In the first half of the year, Thailand faced much international influx, causing
over-valued currency and export shrinkage. Meanwhile, declining household spending, in comparison
with last quarter of 2012, along with insufficient investment from private sector, failed to sustain
the growth.  

Now the country’s economic recovery is relying excessively on government
spending.

The path to the recovery marks the importance of the 2-trillion Baht campaign on
public transport, and the 350-billion-Baht Water Management programme, as short term economic
stimulus packages to create confidence among private investors.

Moreover, these programmes
come with hefty political implication because the policies, if they succeed, could establish the
much-needed political stability for the current government.

And perhaps, the reason some
parties are arguing against the multi-millions decrees intensely was that the programmes were
against their political agenda, not their concern of the economy.