THURSDAY, March 28, 2024
nationthailand

Directors equally split over economy

Directors equally split over economy

THE first-ever "Thai Directors Survey", conducted by the Thai Institute of Directors (IOD) earlier this year, shows that opinion regarding Thai economic prospects is split down the middle, while corruption remains their top concern despite the ongoing e

Meanwhile, the IOD’s chief believes the government’s latest economic stimulus package, and especially the job-creation policy, is what the economy needs right now, and agrees that the introduction of land and construction taxation should be deferred. 
The survey – the “Thai Director Survey on Director Issues, Corporate Governance, Economic Outlook, and Regulations”, to give it its full title – that was released by the IOD yesterday is the first of its kind.
It was conducted between January 12 and February 25 with a sample size of 436 directors.
One of the key results is that 48 per cent of directors anticipate that the Thai economy will start to improve, while 52 per cent believe it will remain stable, or worsen.
“The government stimulus policy, which aims to increase consumer sentiment, does not really hit the nail on the head because it cannot create enough motives for people to spend … The [recently] lowered policy interest rate is not the answer as it was already low, so the government stimulus policy should be more targeted from sector to sector, such as via lower tax or a tax exemption for sectors with a long supply chain,” said Weerachai Ngamdeevilaisak, independent director at Pruksa Real Estate. 
Bandid Nijathaworn, president and CEO of IOD, said: “The latest efforts of the government in terms of the job-creation policy and policies to boost people’s purchasing power are straight to the point because this is the heart of the current economic problem, where the reason the economy is not doing so well at the moment is poor purchasing power.”
Thailand Development Research Institute (TDRI) adviser Veerathai Santiprabhob said the most likely reason that directors’ opinion regarding the prospects for the economy was almost equally divided was that the Kingdom’s economy was currently only “growing with one leg”, so people who rely heavily on exports would see gloomy prospects ahead, while domestic consumption is recovering. 
Bandit said he agreed with the decision to put the land and construction tax on hold, but argued that the tax should be collected as soon as was practicable in order to increase government income.
The timing of the tax delay might therefore need to be revised, especially during this period of economic uncertainty, he added. 
Weerachai said: “The land and construction tax will have a huge impact on the real-estate sector, where having attractive plots will be a key success factor this year and in the future, since the cost of doing business will rise after this tax comes into effect.” 
The IOD survey also revealed that Thai directors were still very worried about corruption.
Bandit said that while the situation had improved since the military government came to power, all concerned had to “step up and continue with their anti-corruption efforts”.
Veerathai said the issue of corruption would take time to resolve because the main “actors” behind the problem, such as politicians, government officials who make key decisions and lobbyists, were still in place despite the change of power.
“The actors are still there, so we have to look to the long run by trying to improve the level of transparency in terms of government regulations and processes, while the private sector’s efforts to cast out these corrupt individuals from society should be regularly and continuously pursued,” he said. 
Weerachai said he agreed with the TDRI adviser’s assessment that the corrupt players were still on the scene, and added that corruption “will continue to be with us for a long time” if these crucial players were not weeded out from society.
“The corruption problem has to be tackled structurally and socially from both sides of the table, or else it will stick with us for a long time to come,” said the Pruksa director. 
 
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