'Focus on economic priorities'

BUSINESS leaders called on the interim government last week to provide clarity and prioritise its economic policies to boost local and international confidence and jump-start domestic demand.
At a roundtable organised by The Nation, Now TV 26 and Krungthep Turakij, Pornwut Sarasin, chairman of ThaiNamthip Co, said mixed signals on tax changes and short- and long-term economic plans have helped dampen consumer sentiment.
“Setting clarity and priority will help businesses to see the future better,” he said.
Pradit Phataraprasit, chairman of Thai Agro Exchange Co, also a politician and member of many previous governments, said a clear timetable for the next election would spur economic activities, as political parties will have to come up with economic stimulus plans.
An election timeframe will also roll back international sanctions, which have undermined negotiations for free-trade agreements, and help boost export demand.
“We have to understand that this government’s priority concern is security and not economics,” he said.
The economy has not picked up as hoped.
Among the reasons are the slowdown in the global economy and exports, falls in commodity prices, uncertainty over economic policy management as to who actually is in charge, and slowness in government spending.
Most consumer goods companies have reported lower sales since the start of the year as grassroots spending fell.
Boonchai Chokwatana, chairman of Saha Patanapibul Plc, suggested a targeted government spending strategy at the grassroots level in order to spur immediate demand.
Government spending has been hampered by caution in funds disbursement especially among economic ministries headed by the military.
Thailand has faced political difficulties and unrest for a long time, so people became used to staying at home.
They have no fervour for any out-of-home activities, including shopping. This will bring deflation to the Thai economy.
Crackdowns on vice at the provincial and community levels are also said to have cut grassroots’ incomes, as well as the exercising of caution in combating corruption among state projects, said Somchai Pornrattanacharoen, president of the Association of Thai Wholesale and Retail Trades, and Chanata Sukumanon, adviser to Siam City Cement Plc.
These measures are necessary but they have weakened spending sentiment.
Thongma Vijitpongpun, executive chairman and chief executive officer of Pruksa Real Estate Plc, said consumers in the property sector still have good confidence.
The property market in the first two months of this year grew by 54 per cent in sales year-on-year to about Bt50.3 billion.
“In the first two months of last year, Thailand was facing a political crisis, which is an abnormal situation.
“After the power seizure by the National Council for Peace and Order, people have better confidence. They’ve started buying houses and other properties,” he said.
Penthip Pornchaded, president of the Association for the Promotion of Thai Small and Medium Entrepreneurs, said local small and medium businesses have seen their sales decline by 20-30 per cent as a result of the economic difficulty and plunge in exports.
“SMEs play a crucial role in the supply-chains of local big industries. They are a huge group of consumers and big spenders. Without confidence, those SMEs are reluctant to spend money and the overall economy will grind to a halt,” she said.
But the government’s budget disbursement remains slow. All the government’s investment projects should create jobs for grassroots people.
The government should lend support to SMEs, which have good capabilities to open new markets in Asean Economic Community countries.