By ERICH PARPART
PRIME Minister General Prayut Chan-o-cha has set out his vision of how he wants to help the less fortunate for the remainder of his time in office by finding ways to lower the level of inequality in society.
He has instructed high-ranking officials along with government agencies to urgently introduce short- and mid-term measures that would reduce economic disparity and provide support for small and medium-sized enterprises (SMEs).
“Fixing inequality is an urgent matter, and reforms which are required to fix structural problems will begin in this government and carry on to the next,” the PM said yesterday at the “Third Ministry Chief Executive or Equivalent Level Meeting for 2015”, held at the Finance Ministry.
“If there is a need to use Article 44 [of the interim charter] to amend or upgrade any regulation that would facilitate the introduction of such measures, then so be it since this government has the duty to lower inequality,” he said.
Article 44 gives the junta chief sweeping powers.
Rungson Sriworasat, permanent secretary of the Finance Ministry, said the premier is worried about low-income earners and SMEs that have limited collateral and are currently experiencing a lack of liquidity. Government financial agencies such as SME Bank, the Government Savings Bank and the Bank for Agriculture and Agricultural Cooperatives have responded by planning a state banks’ roadshow throughout the country, which kicks off around the end of this month, he said.
“The Finance Ministry has already introduced a nano-finance scheme, but there has been only a small response from the public since not that many people know about it, and the financial institutions that offer such loans are only in large cities,” he said. “Nevertheless, the roadshow should create more awareness and this type of credit is expected to increase as seven firms have already been granted nano-finance licences since it was introduced, and some are already offering these loans. We will compete with ‘Money Expo’ on this one,” he added.
All seven of the approved nano-finance operators will join the roadshow, while there are around 20 further nano-finance applications that are currently waiting for approval from the ministry and the Bank of Thailand, said the official.
Meanwhile, Rungson said the ministry was currently following up on the stimulus measures that were introduced earlier, since some of the money was still left over.
He cited Bt19 billion in the Village Fund, which could be used to provide soft loans to villagers, thus stimulating the economy in the short run.
Small stimulus measures
“It will take time for the government mega-projects to help the economy, but these small stimulus measures would be able to boost |the economy right now,” he explained.
While the permanent secretary did not comment on whether there would be any new measures to help SMEs or reduce income inequality in the short term, he said that two measures – increasing the Thai Credit Guarantee Corporation’s maximum loan guarantee for SMEs from 18 per cent to 30 per cent, and introducing a land and construction tax – had been finalised and were currently being considered by Finance Minister Sommai Phasee.
As for the economy, Rungson said that if the baht stayed within a range of 33-34 per US dollar until the end of the year, the export sector should be able to help push gross-domestic-product growth to 3.7 per cent this year, following 3-per-cent year-on-year economic expansion in the first quarter.