New Thai PM promise urgent to fix ‘sick economy’

In an inaugural address to the Thai Parliament, the newly appointed Prime Minister, Srettha Thavisin, has pledged swift action to alleviate the economic turmoil that has befallen the nation in the wake of the COVID-19 pandemic. Prime Minister Srettha, a member of the populist Pheu Thai Party and a former real estate developer, has assumed office following four months of political turmoil, characterised by protracted disagreements among lawmakers over the formation of a government.

Srettha acknowledged the dire state of Thailand’s economy, describing it as “ailing.” The nation’s economic woes are primarily attributed to the devastating impact of the pandemic on its once-thriving tourism industry. In response, the Prime Minister outlined a series of stimulus measures aimed at rejuvenating the economy. These measures include the distribution of 10,000 baht (approximately $280) to all Thai citizens aged 16 and older. Srettha believes this injection of funds will not only generate jobs and stimulate economic activity but also generate government revenue.

While critics have raised concerns about the long-term sustainability of such a cash handout, Srettha remains committed to its implementation, estimating the cost to be around 560 billion baht ($15.8 billion) with plans for distribution in the first quarter of the upcoming year.

Addressing the mounting debt crisis, Srettha expressed his determination to act swiftly. He highlighted that public debt has surged to over 60 percent of Thailand’s Gross Domestic Product (GDP) in 2023, while household debt has reached levels exceeding 90 percent of GDP.

Additionally, the government has outlined strategies to mitigate rising energy costs and bolster the struggling tourism sector. Plans include waiving visa fees for visitors from specific countries and improving airport infrastructure to attract more international flights.

In the long term, Prime Minister Srettha unveiled ambitious goals, including boosting international trade, supporting start-up businesses, investing in transport infrastructure, enhancing agricultural production, empowering local governments, and facilitating land ownership. Furthermore, the government aims to amend the existing military-installed constitution, paving the way for public participation in the process.

Srettha also addressed campaign promises regarding military reform, acknowledging the need for collaboration with the armed forces to terminate mandatory conscription, reduce the excessive number of generals, and ensure transparency in procurement procedures within the Ministry of Defence.

This conciliatory tone comes in the aftermath of a political alliance formed between the Pheu Thai Party and several pro-military factions, securing support from the conservative Senate, the upper chamber of the National Assembly. This alliance represented a reversal of campaign commitments and disappointed many Thai citizens who had overwhelmingly voted for change after nearly a decade of military rule.

The skepticism surrounding Pheu Thai’s ability to deliver on its campaign pledges while accommodating coalition allies from diverse political backgrounds is palpable. Recent polling by the National Institute of Development Administration in September indicated that a significant portion of the Thai populace remains unconvinced about the party’s capacity to implement promised reforms, particularly regarding military conscription and constitutional revisions.

Prime Minister Srettha Thavisin’s leadership faces the daunting task of steering Thailand towards economic recovery while addressing political and social challenges within a complex coalition government. The nation watches with anticipation as his administration endeavours to chart a path forward in these trying times.