800 billion loan debate begins in Parliament

BANGKOK, June 15 (TNA) – The live broadcast on a parliamentary debate on the Bt800 billion loan package sought by the coalition government of Prime Minister Abhisit Vejjajiva aimed at jump starting Thailand’s economy began Monday.
 
Finance Minister Korn Chatikavanij told members of the House of Representatives that the planned borrowing of Bt800 billion is necessary as it would enable the government to have sufficient funds to resolve economic problems confronting the country, prepare efficient state-sponsored public services and strengthen financial positions on a long-term basis.
 
Mr. Korn said he expected that with the funds, economic growth in the country would turn to positive from negative from 2010 and “the economy should return to normal from 2014.”
 
Thailand’s economy has now entered a recession,  according to the National Economic and Social Development Board (NESDB), after the gross domestic product (GDP) contracted by 7.1 per cent in the first quarter of 2009 — a far larger drop than the 4.3 per cent drop registered in the last quarter of 2008.
 
Thailand’s  7.1 per cent contraction is the biggest drop since the 1997 financial crisis, the NESDB said.
 
Reasoning that the national economy could contract 4-5 per cent per year due to severe global economic meltdown and several domestic negative factors, Mr. Korn said consumption and public investment in Thailand had already declined sharply.
 
More than 6,000 urgent  projects worth about Bt1.43 trillion or equivalent to about 17 per cent of GDP could be implemented within the next three years from now, he said. This will enable the government to achieve its goals as it forecasts that economy would grow at around 1.5 per cent per year and also generate employment of between 400,000-500,000 jobs per year.
 
Mr. Korn said the government has prepared deficit expenditure for “at least  another three years” but still it cannot invest much on projects so it is necessary for it to draft executive decree and a bill each seeking Bt400 billion to help the government to have enough funds for investment on projects.
 
Under an agreement made between the government and opposition chief whips, the live broadcasts on radio and television of the government’s executive decree and on the draft bill will be debated Monday.
 
However, the debate could continue until Tuesday.
 
Live broadcast on debate of the government budget for Fiscal 2010, starting October 1, will be held June 17-18.
 
Opposition  Puea Thai Party members charged in Parliament that the government’s borrowing plan is not transparent, could cause corruption and create debts for the people to shoulder at the end.
 
Puea Thai MP for Chiang Mai Surapong  Tovichakchaikul said he is against the government issuance of the executive decree as it is “not urgent to borrow money now.”
 
Some of the projects are still not transparent and it would be appropriate for the government  to  start borrowing in August, Mr. Surapong said.
 
He urged the government to “screen all the projects carefully as there might be corruption. The opposition isn’t against issuing an executive decree but it feels that several processes undertaken (by government officials) are not transparent and could damage the country.”
 
Another Puea Thai Party member Prakiat Nasima said he wondered where the government would keep Bt800 billion as it would not be deposited as financial reserves.
 
The decree empowers the cabinet ministers to spend this money but no details of spending are given and this could create a “new round of policy corruption,” said Mr. Prakiat. (TNA)