Leading economic analyst opposes govt’s relief measures

BANGKOK, 30 June 2010 (NNT) – Director of the Center of Economic and Business Forecasting (CEBF) Dr Thanawat Polvichai has voiced his opposition to the government’s relief measures, saying that they are not the solution to the high cost-of-living problem and that they are ruining the mechanism of the market.

Speaking of the government’s decision to extend the four relief measures, Dr Thanawat stated that authorities should have injected the money specifically into poverty-stricken areas rather than providing free bus and train services. Although the majority of bus passengers were low-income earners, many others with even lower income were not living in Bangkok, he explained. The strategy could only help a small group of people living in the city.

Mr Thanawat criticized that the relief measures, whose primary objective was to keep the cost of living down, were not the solution to the problem. He said the government should not peg the gas price and should have let it shift according to the market mechanism. He advised the state to withdraw the relief package once the economy improved and put more emphasis on the agricultural sector.

The cabinet yesterday approved another six-month extension to the relief measures which include free services on public buses and economy-class train, free electricity, and price retention for liquefied petroleum gas and compressed natural gas.