BOT study favours infrastructure project
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The Bank of Thailand has studied the details of the government's plan to spend Bt2 trillion on new infrastructure, to find out the economic value of the investment and benefits to the country's competitiveness in the long term.
Dr Roong Poshyananda Mallikamas, an economist at the central bank, said the investment would be a good thing if it bolstered long-term competitiveness. What the government should bear in mind, however, is whether taking on so much debt is worthwhile in the long view.
She added that if these projects are worth incurring debt for, they must be implemented on a transparent basis.
The government has continually sought to reassure MPs on the transparency of the infrastructure projects as the process is subject to PM’s Office procurement rules and other regulations.
In the two-day parliamentary debate starting on Thursday, the opposition agreed that the country needed massive infrastructure investment but found fault with the government’s plan to seek a Bt2-trillion project loan by issuing a special decree and bypassing the annual budget, which could lead to lax fiscal discipline and ballooning public debt.
The government argued that the borrowing would not upset the fiscal balance. While it will take time to pay off the debt completely, what the country will get in return is infrastructure assets that will provide long-term benefits.
