Thailand: Thailand to spend RM23.8bil more to boost growth in provinces
BANGKOK: Thailand’s parliament on Friday approved an additional 190 billion baht (RM23.85bil) in public spending this fiscal year, aimed at improving growth outside its capital, as the military government tries to stimulate a sluggish economy.
The majority of the additional budget, 115 billion baht (RM14.44bil), will go into funding local initiative projects, according to an official document detailing the spending plan.
This will be the first major budget allocated by the government to specifically boost growth outside of Bangkok, which economically overshadows the rest of the country by a long way.
Thailand’s original budget for the 2017 fiscal year, which started in October and lasts until September this year, was 2.73 trillion baht (RM342.84bil). Of this amount, 548 billion baht (RM68.82bil) was allotted for government projects.
“We want the country to be able to compete in the global market, but we can’t only keep investing in Bangkok,” Finance Minister Apisak Tantivorawong told parliament.
“This will spread wealth to the provinces and in turn decrease disparity.”
Apisak also added that he expected the extra spending to boost economic growth by 0.4-0.5 percentage point this year.
Thailand’s junta often comes under criticism for struggling to kick-start the economy since it seized power in 2014, when political unrest brought South-East Asia’s second-largest economy to the verge of recession.
The country’s GDP growth was just 0.8% in 2014, 2.8% in 2015 and estimated at 3.2% in 2016.
The plan to disperse wealth into the rural economy, although economically driven, could be slightly politically motivated, said Kan Yuenyong, executive director of the Siam Intelligence Unit think-tank.
“This government hasn’t until now been able to show that they can do better than politicians in improving the economy,” Kan told Reuters.
“They know they have to convince people otherwise, and they know it has to start from the provinces.”
Reducing social and economic disparities is one of the goals listed in a 20-year national development plan set by the ruling military.
The poorest regions of Thailand, the north and northeast, are the strongholds of populist former Prime Minister Thaksin Shinawatra, ousted by the army in 2006, and his sister Yingluck, who was overthrown in the 2014 coup.
The size of the economy per capita in the northeast was a fifth of that in Bangkok, according to the most recent figures for Gross Regional Product from Thailand’s National Economic and Social Development Board in 2013.
The northeast was the only region of Thailand to vote against the new military-backed constitution in a referendum last year.
Worachai Hema, former member of parliament of Yingluck’s Pheu Thai party, said the plan would help people at a time of sluggish economy, but it could also have an implication ahead of a general election expected late this year or next year.
“This could be seen as a sort of campaign for the government or its networks who might want to go into politics in the future,” Worachai told Reuters. – Reuters