BANGKOK – Prime Minister Srettha Thavisin’s digital wallet project, due to be launched in May this year, is still a hotly debated political issue on the question, “Is the Thai economy facing a crisis?”
After the State Council sent a statement to the government on January 8, 2024 that it can issue a draft loan of 500 billion baht, but with some caveats and suggestions, including the need for the government to demonstrate the urgent need for the loan in accordance with financial regulations.
This statement by the Council of State prompted the opposition parties to attack the government and call on the government to stop pursuing the project.
The Move Forward Party argues that the country’s economy is not in such a crisis that the project is necessary, while the Democratic Party is against large loans. Some senators appointed by the military junta also believe that the borrowing will lead to indebtedness for the people.
What is a crisis economy?
Sirikanya Tansakul, the deputy leader of the Move Forward Party, has been giving daily interviews emphasizing that there is no sign of a crisis in the country’s economy as the constitution stipulates that the government can only implement a project during a severe economic crisis if it cannot be funded through normal budgets.
“I think we need to define what a crisis economy looks like. What are the indicators? To be accepted by all, we need to see what methods the government is using to come up with the idea that our country is in crisis,” Sirikanya said on Thursday, January 11.
She also said that the chances of passing the 500-million-baht bill will gradually dwindle if the different agencies fail to come to a common clarification. Even if the bill passes the House of Representatives, it still has to go through the Senate. Not to mention that there are many other authorities, including the usual petitioners, who want to appeal to the Constitutional Court. It is therefore doubtful whether the law will be finalized by May.
The boiling frog economy
Deputy Prime Minister Phumtham Wechayachai, who is also Commerce Minister, said the crisis is an issue that must be resolved together. Otherwise, it will become a debate between political parties. He mentioned that a party that wants to push the digital wallet project will say that the country is in crisis and vice versa.
“All parties need to tell the truth, adding that if you want to know if a country is in crisis, go to the market and ask people,” he said.
Dr. Phrommin Lertsuridej, the Prime Minister’s Secretary, stated the economy is in a constant crisis, like a boiling frog that will float there quite placidly until you can’t feel it. But when you are aware of it, there will already be a problem.
He divided the economic situation into three stages. 1. The country’s export figures have begun to decline since 2007, prior to the pandemic. 2. During the epidemic, Thailand’s economy has seen the worst decline and is growing at the slowest rate in the region. 3. Currently, inflation is declining but interest rates are rising. Thailand has expanded unevenly.
“The amount of household debt has increased steadily over the past 10 years, from 70% of GDP to 91.6% of GDP, showing that poor people are getting poorer and poorer,” he added. “When looking at the total data, it may be unclear. However, there are folks who are in danger. If you ask the majority of the country’s citizens, you’ll discover that they are in difficulties. It is thus considered a crisis.”
Low potential economic growth
At the House of Representatives meeting to consider the draft budget for 2024 in early January, opposition MPs criticized the government for the digital wallet project, which was not included in the draft budget. Instead, it was issued as a separate borrowing bill, even though the Pheu Thai Party had said during the election that it would not borrow money for the project.
Prime Minister Srettha clarified in Parliament that he had listened to the opinions of all parties and followed the advice of Sethaput Suthiwartnarueput, the Governor of the Bank of Thailand (BoT), to enact a law and listen to the opinions of all parties, including the Council of State, Danucha Pitchayanun, the Secretary-General of the National Economic and Social Development Council, experts and all members of the Digital Wallet Committee.
Earlier, the Prime Minister had commented on Thailand’s economy, which needed a strong boost as the World Bank predicted in its 2023 report that Thailand’s potential economic growth would be the lowest among ASEAN economies over the next 20 years due to an aging population, lower private investment and lower labor productivity.
Isan people expect a digital wallet
According to a survey of public opinion in 20 northeastern provinces (Isan Poll) conducted during January 5-8 by the Centre for Business and Economic Research of Isan, or ECBER, Faculty of Economics, Khon Kaen College, 52.3 percent of 1,102 respondents believed the project would be successful, 28.3 percent believed it would not be successful, and 19.4 percent were not sure.
When asked what they would do with 10,000 baht in digital currency, 53.3 percent said they would use it to buy personal items and food, followed by 19.7 percent who said they would use it to buy items and equipment to start a career and generate income, and 13 percent who said they would use it to buy appliances and furniture.
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