By The Nation
Six candidates are competing for the post of Bank of Thailand governor, with the incumbent Veerathai Santiprabhob set to complete his five-year term in September.
Observers had previously tipped two experienced central bank deputies – Mathee Supapongse and Ronadol Numnonda – as the candidates most likely to be shortlisted by the recruiting committee.
The finance minister is tasked with picking one of two candidates proposed by the recruiting committee before the name goes to the Cabinet for final approval.
However, all eyes shifted to Setthaput Suthiwart-Narueput, 55, when his name appeared on the candidate list.
Setthaput has an advantage over the other five candidates since he is currently an economic adviser to Prime Minister Prayut Chan-o-cha, while his rich experience in economic affairs should also serve him well. Setthaput took a doctorate degree in economics from Yale University before working for the New York-based McKinsey & Company consultancy firm and the World Bank.
Setthaput is currently a member of the central bank’s monetary policy committee (MPC).
He also happens to be a friend of Veerathai.
Veerathai and Setthaput were recruited to work at the Finance Ministry after the 1997 financial crisis hit Thailand. The two were appointed co-directors of the Fiscal Policy Research Institute.
Setthaput was working as senior economist at the World Bank in Washington before joining the Finance Ministry. Then-Finance Minister Tarrin Nimmanahaeminda was managing the economy under the International Monetary Fund’s austerity programme, which was widely criticised in Thailand as the “wrong medicine”. The IMF argued that the Democrat-led Thai government had to restore policy credibility by cutting government spending and increasing taxes. The consequence was that the Democrat Party lost the next election, while the IMF later abandoned such austerity-based programmes for other crisis-hit countries.
After two years at the Finance Ministry, Setthaput resigned and continued to work at the World Bank.
He was then appointed as senior vice president of the Stock Exchange of Thailand between 2005 and 2007. Later, he became managing director and head of research at SCB Securities before going on to be named president of SCB Asset Management. He was appointed vice president and chief economist at Siam Commercial Bank between 2009 and 2011. He resigned to found his own financing consultancy company, The Advisor Co Ltd.
In 2014, he was invited to join the central bank’s MPC.
Setthaput has been called hawkish by some observers for his emphasis on financial stability over short-term high economic growth. That preference may reflect his work on the IMF’s Thai austerity programme during 1997-98 Asian financial crisis.
Setthaput was among the first economists to raise concerns about the recent rise in household debt levels. In 2016, he also warned of possible debt defaults among companies issuing corporate bonds.
Pipat Luengnaruemitchai, assistant managing director at Phatra Securities, views Setthaput as an economist with strong experience of both fiscal and monetary issues and the private sector.
“He is quite flexible. For example, when economic growth is fine he focuses on financial stability, but when the economy faces contraction, as with the current Covid-19 crisis, he agrees with policy rate cuts,” said Pipat.
Pipat predicted that Setthaput and one of the central bank deputies may be picked by the recruiting committee, before Finance Minister Uttama Savanayana puts the final name to Cabinet.
Setthaput was likely encouraged to apply for the post by Uttama, but then backed away when Uttama’s position was undermined by upheaval in the ruling Palang Pracharat Party, say observers.
When it became clear that Uttama would remain as Finance Minister despite quitting the party last Thursday, Setthaput applied for the post at the last minute after the deadline was extended from June 25 to July 10.
The other candidates are Anusorn Tamajai, former dean at Rangsit University’s Economics Faculty and former MPC member; Tongjai Thanachanan, former head of institutional business at Ayudhya JF Asset Management; and Suchart Techaposai, former head of fixed income at Ayudhya JF Asset Management.