Somkid warns govt on high debt

Speaking at a Thai Chamber of Commerce forum on “Guide economy with self-sufficiency economy philosophy”, Somkid said the government should carefully prioritise its spending plans and pay attention not only to stimulating the economy by promoting consumption, but also to investment for future growth.
Mismanagement of the government’s huge borrowing could lead to a high public debt-to-GDP ratio of 47 per cent this year, rising to 58-59 per cent in the next five years, which is a bad sign for the economy, he said.
“The global economy is highly volatile, and unexpected natural catastrophes could occur at any time. The government should carefully spend the country’s budget – which it has borrowed for economic rehabilitation – to ensure sustainable growth,” said Somkid, who is also a former finance minister.
He added that the government should not too much concerned with the GDP growth figure, which he said was meaningless, but on how to promote long-term development.
To promote sustainable growth, Somkid advised the government to prioritise spending in three areas.
The first is promoting development of economic fundamentals by focusing on an agricultural sector “revolution” and providing education to farmers.
The second is to adjust economic fundamentals in accordance with higher wages. The government should support the private sector to invest and add value to products, Somkid said. The third is to prepare the economy and business sector for the upcoming Asean Economic Community, to ensure that all sectors will survive amid a seamless regional market. Other leading businessmen also suggested people and businesses adopt His Majesty the King’s sufficiency economy philosophy for sustainable growth.
Business leaders shared the views that the development of human resources, innovation and research and development (R&D), and having a safety-net for their operations, would ensure long-term growth.
Kan Trakulhoon, president and chief executive officer of SCG, said the firm once faced a huge debt of Bt247 billion, because overconfidence led to too-rapid an expansion. However, after adopting the sufficiency model, the firm was able to solve its debt problem.
Tevin Vongvanich, PTT’s chief financial officer, said Thailand should depend less on imported energy to ensure long-term growth. The company would focus more on alternative energy development and promote human resources development , the executive said.
Isara Vongkusolkit, chairman of Mitr Phol Sugar Group, said the firm does business based on fair practices and a clear policy to ensure farmers’ growth. The firm has adopted the sufficiency economy model by creating innovations for promoting sugarcane farming development and increase farmers’ incomes.