Balanced growth eyed via Village Funds
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AFTER DRIVING headline growth this year through quick-acting stimulus packages, the government says it will spend a year and a half creating balanced growth through the community fund scheme.
“To strengthen the foundations of the country, we will use the Village Funds as a mechanism to develop the country.
“In drafting the next fiscal budgets, the central government will not initiate the budgets and allocate them to each province as it did in the past,” Deputy Prime Minister Somkid Jatusripitak said yesterday.
The stimulus packages will impart their full force on the economy from this quarter to early next year, he told a seminar held by Prachachart Turakij newspaper.
The government will not launch any more economic packages, except if the external situation continues flashing bad signs. Then the government will consider the external factor again.
However, the existing packages should be sufficient to shore up the domestic economy, Somkid said.
The recent packages cost the government Bt52 billion, regarded as a small figure. The cost would not badly crimp the fiscal budget, he said.
The recent packages were unleashed to help halt the economic slowdown.
Even though the Village Fund programme has been heavily criticised, the government needs it in order to create cash flows in the economic system, he said.
The Village Funds are a good mechanism for creating balanced growth, he said. Even though this might be a weak spot, the government will follow the execution of the Village Fund scheme to provide loans to villagers.
Governors will have to think about their provincial development plans, covering tambon and villages, via the joint committee for provincial economic development. The results from the meetings in each province will show the actual requirements of the community.
After that, the governors will submit the plans and the proposed budgets to the Interior Ministry.
To achieve balanced growth in the country, fiscal policies will have to be both vertical and horizontal, Somkid said. The people in each province must participate in provincial development.
The permanent secretaries of all ministries will gather at the Budget Bureau to brainstorm fiscal budget reform. Without reform, the country has a high chance of seeing a recession in five years, Somkid claimed.
Education must get a major revamp to help increase long-term competitiveness. Universities should have more freedom to produce innovative programmes, while vocational education must have a critical role in incubating new enterprises, he said.
Vocational education should be changed to “technician education”. There should be a one-year programme for vocational-education graduates who are interested in becoming entrepreneurs.
Commercial banks should take a bigger role in creating new small and medium-sized enterprises, not just wait for SMEs to be strong enough before considering giving them loans.
Somkid said on the sidelines of the seminar that the private sector had paid attention to public-private partnerships. The Finance Ministry is expected to invite investors who are interested in PPPs soon.
