Bank of Thailand governor Prasarn warns of national savings shortfall

That makes perfect sense to them, but that also means some crucial policies might be ignored because there are no votes to be gained anytime soon.
One example is the country’s need to build up a significant amount of national savings now in preparation for the ageing of its population over the next 10-15 years.
The cost of public healthcare will skyrocket as Thais live longer, overwhelming the current savings and healthcare systems, while fewer young people will enter the workforce to contribute to the public pool of funds.
The country has three related medical-care systems – social security, universal and civil service.
The social security system has about 9-10 million members and serves as a safety net not only for their health but also for retirement, unemployment and other personal eventualities.
The Bt30-per-visit universal healthcare system covers more than 40 million people. The government pays directly into this system on a per-head annual basis.
The civil service system covers a few million government employees and their families.
The country will face a formidable challenge in footing the public healthcare bill in the next decade or two unless it comes up with new initiatives on national savings now in order to cover the exploding cost in the future.
This issue has attracted little if any interest from the ruling politicians largely because any action taken now will require too many years to bear fruit.
In other words, the payback is too far off into the future and political parties will not get votes for doing it now. They prefer actions that produce immediate results regardless of the longer-term negative implications.
A case in point is the first-car buyer programme in which the government has offered voters a tax refund of up to Bt100,000 on a new car they buy within 14 months.
Another example is the FIDF issue. When Thailand faced the Tom Yam Kung crisis back in 1997, dozens of financial institutions were closed down and the government bailed out all depositors.
This resulted in more than Bt1.1 trillion damages at the expense of taxpayers.
Fourteen years later, this trillion-baht issue remains unsolved, even though the FIDF or Financial Institutions Development Fund, the bailout mechanism, is now heading towards termination.
Over the past years, every finance minister would only pay the interest on this massive debt. No servicing of the principal has ever been made.
This massive debt will be overhanging for years to come because it currently costs the government from Bt40 billion to Bt60 billion a year just to service the interest, not to mention the principal.
In the end, this debt burden looks likely to last forever as politicians will not get votes from solving past issues, even though every government complains that it has less money to run the country because of the financial obligation to service the Bt1.1 trillion debt.
Politicians also want the central bank to take over the principal, but this is highly unlikely to be accepted by Prasarn or any well-disciplined central banker.