Recently, I listened to Prime Minister Abhisit Vejjajiva and Finance Minister, Korn Chatikavanij talking about the government’s Thai Khemkhaeng action plan. I am quite pleased with their explanation, the concrete implementation of details and what they plan to achieve.
I think it is definitely a good news for the Thai economy. But how good this news eventually is remains to be seen. It all depends on how effectively the government implements this action plan. Here is the summary and impression I got from listening to them.
Because of the global economic crisis, which has led to decline in production, export and private spending, the government is now set to boost consumption and investment through projects under the Thai Khemkhaeng (Invest for Strength) programme. It is expected to have a high economic and positive social impact. Most of these investments will be from 2010 to 2012 valuing at 5% of gross domestic product each year. These investments will create jobs and instill confidence in the private sector as well as encourage more private spending.
It is expected that the number of jobs generated will increase by 1.5 million in three years. During these years, the public debt to GDP ratio will slightly increase and peak at the acceptable level of 58 per cent in 2012. This grand scheme plans to make major achievements in seven areas:
- Increase the land area for agriculture from 24.5 to 25.6 million rai, and reduce the number of people that will face flooding problems from 400,000 to 40,000 people.
- Increase the paved roads in the rural area from 83 per cent to 100 per cent and reduce the transportation logistics cost from the current 19 per cent to 16 per cent.
- Develop the quality of education by totally eliminating the number of students, who can not write or read, from 160,330 to zero and reduce the ratio of students per computer from 38 to 20.
- Adequately increase the access to hospital service and the number of beds.
- Create a new revenue base from creative economy to 20 per cent of GDP.
- Increase the number of tourists in the areas that receive new budgets for upgrading infrastructure from 8.9 to 10.7 million.
- Create better quality of life, especially household income in the special areas of five southern provinces from Bt 64,000 to 120,000 per year.
The total investment under this scheme is Bt 1.44 trillion of which are the shovel-ready projects worth 1.06 trillion baht. The cabinet has approved project spending of Bt 200 billion, which will be disbursed in the fourth quarter of this year and 83.5 per cent of this will be disbursed by the end of next year. Several ministries will implement the projects; the major ones are the Ministry of Agriculture and Cooperatives, the Ministry of Education, the Communication Ministry which undertake 24%, 22.7% and 20% respectively.
Thai Khemkhaeng investment projects by geographical location see the Northeast, the Central, the North and the South receive Bt 48.3, Bt 38.4, Bt 30, Bt 27 billion respectively.
The projects I support the most because of their high economic value are: Upgrading of the double-track rail network from the Northeast to Lamchabang Seaport, develop community-led water resource management, improve water resource management for agriculture and industrial sectors, rehabilitate small to medium reservoirs to develop major river basins and expand irrigation areas and develop hydro power as an alternative energy to replace oil-based power plant.
By Chodechai Suwanaporn [email protected]
Source: Fiscal Policy Office / www.fpo.go.th