Abhisit vows to be business friendly

[buksida]

In his first economic announcement, Abhisit Vejjajiva, leader of the Democrat Party, yesterday pledged to introduce a friendlier business environment to boost renewed confidence in Thailand. Published on October 19, 2007

He said the party would abolish the Bank of Thailand's 30-per-cent reserve requirement and halt the process to amend the controversial foreign business law if the Democrats are elected as the new government in the general election.

Before an audience of around 300, Abhisit was trying to make the point that his party would pursue investment-friendly policies and a different strategy from the current government. He said capital controls and the amendment of the foreign business law had sent the wrong signal to investors.

As to whether the Democrats would follow the current government's footsteps in temporarily halting drug patents to enforce compulsory licensing, Abhisit said: "Compulsory licensing should be the last choice. I think the threat to impose licensing should produce almost the same result as actually imposing licensing. In fact, we can provide the public with cheaper drugs by forming a group of buyers."

Against a background showing the theme "Thailand Back to Business", Abhisit said the reserve requirement was destroying the capital market. "The new government has to revoke it as soon as possible." His statement drew applause from the audience.

It is expected the Democrats will form the core of the next coalition government, with the People Power Party - still loyal to ex-prime minister Thaksin Shinawatra - in opposition.

The policy announcement was the party's attempt to address concerns from investors that the Democrats might not be well versed in economic policy, even though many like the party's clear-cut policy on education.

Abhisit said he decided to highlight economic issues because most people he talked to said they were worried about the economic situation rather than the political uncertainty.

Korbsak Sabhavasu, one of the economic policy authors, told The Nation: "We want to show that the Democrats understand the economy and is capable of running economic policy."

Abhisit spent 45 minutes outlining the country's problems with slide presentations, focusing on five areas that the party wants to improve - economic structure, tax and budget, government efficiency, law and regulations - as well as the structure of the capital and financial markets.

The presentation was worked out by the party's economic team including Korn Chatikavanij, Chuti Kririksh, Kiat Sitteeamorn, Korbsak and Abhisit.

Abhisit said the revocation of the capital control was part of the party's plan to turn the role of the government from controller to supervisor.

He also said the party would halt the process to amend the foreign business law. "There should be some sort of protection, but that should be based on the international standard. The law affects many foreign-owned companies already operating here. It creates confusion on the government's policy direction."

Citing the goals to reach within four years if the party is elected, Abhisit said it would reduce transportation costs by 25-30 per cent, double the country's income from tourism and service sectors, and increase farmers' income by 40-50 per cent.

A Democrat government would also create 400,000 job positions, increase real gross domestic product (GDP) per capita to over US$3,000 (Bt102,510) and provide free education until high school, he said.

Abhisit was using a wireless ear-microphone that enabled him to move around the stage to connect with the audience. Korn moderated the session from the side of the stage.

The event was also attended by prominent economists such as Supavud Saicheua, managing director of Phatra Securities, Montree Sonpaisarn, president of Kim Eng Securities (Thailand), and representatives from foreign communities who were given a simultaneous translation.

Kristian Bo, governor of the board of the Thai-Norwegian Chamber of Commerce, said he thought what Abhisit said was "useful and good policy".

After Abhisit finished his speech, Korn opened the floor with a light-hearted note: "Before Khun Abhisit took to the podium, the Stock Exchange of Thailand's index dropped by one point. But now, the SET has regained six points. I don't know if anyone here has sent out the message from what Khun Abhisit said to the market."

At the end of the day, however, the SET index fell 7.78 points to 876.75.

Most of the questions Abhisit received from the floor focused on the capital-control requirements as investors were curious if the government would have any alternative measures to curb the rise of the baht.

Abhisit said the Democrats would not have a policy to keep the baht weak and that the party would rather address the root cause of the problem, which is the imbalance of the economy. Thailand depends on export earnings but the domestic economy is weak.

Another issue of concern is whether Abhisit would be able to realise his policy objectives, as the new government would likely be a coalition. "We will join with the parties that share our policy objectives."

The other issue is the lifespan of the new government. One of the audience asked: "What you said will take four or five years to be realised [such as the investment in double rail tracks], but many expect the new government to last only one and a half year at best."

Abhisit replied: "I believe the lifetime of the new government will depend on its performance."

Some audience members expressed their disappointment that the Democrats didn't show their economic team, as the event was a one-man show. Abhisit said the economic team of the new government would also depend on the preferences of the coalition parties.

Korbsak said: "Why do people keep asking about the likes of the economic team or whether we will invite outsiders? Political issues need politicians to fix them."

Eric Wong, assistant executive vice president of Cho Heng Rice Vermicelli Factory, said: "If we have a leader who will do as promised, I am strongly confident in the policies."

Source : The Nation

Thought : Now before I get jumped on for being a rabid anti-TRT farang I do realise this is just political propaganda. However they do have the right idea, getting rid of that "sufficiency economy" attitude would also help if the country wants to compete with its neighbours for foreign investment.