EDITORIAL
Media bribery claims must be urgently probed
By The Nation
Published on July 8, 2011
Allegations about 'rewarded' journalists undermine key pillars of democracy
The investigation into an allegation that some journalists received money from the Pheu Thai Party in exchange for favourable coverage of the party during the general election must be pursued in earnest and to its conclusion. Simply put, this scandal threatens the foundation of Thailand's fragile democratic system.
Last week, the Manager website publicised an e-mail which the paper claimed was leaked by a Pheu Thai Party source. The e-mail suggested that a Pheu Thai deputy spokesperson paid journalists Bt20,000 to ensure that positive coverage and images of Yingluck would receive more space in the media. In the e-mail, the party's spokesman claimed he had spent money wining and dining certain members of the press last month. The reporters were also named in the e-mail.
If this allegation is true, the reporters in question must be punished. The published e-mail explicitly suggested that the reporters were bribed, a suggestion that, if true, severely violates the ethical code of journalism. The allegation does not merely affect the reporters said to have been involved in the bribery, it also taints the credibility of the reporters' news outlets. And most importantly, the incident damages the credibility and integrity of journalism as an institution.
In fact, this alleged bribe has caused more damage to these news outlets than to the reporters involved, because the general readership will remember the names of the news outlets rather than the names of individual reporters, whom the e-mail mentioned by their first name or nickname.
On the other hand, if this e-mail turns out to be a fraud, the culprits must be brought out into the light. And the result of the investigations must be widely publicised so as to clear the names of reporters whose careers have already been affected because of the rush to judgement by many groups in society. All the time it remains unclear whether the bribery actually took place, the reputation of the reporters alleged to have received the bribe is tarnished. Thus, it is imperative for all parties involved to get to the bottom of what happened and find out if bribery has taken place.
In this regard, the National Press Council of Thailand's decision to investigate the allegation within 15 days was welcome. The council, the News Broadcasting Council of Thailand, the Thai Journalists Association and the Thai Broadcast Journalists Association last week issued a joint statement declaring that the allegation had impacted negatively on the media profession. It also set up a panel of respected members to probe the matter.
The press associations cannot let this allegation go unanswered, and neither can the news outlets that these reporters are attached to. Already, the issue has attracted strong public attention. For instance, social activist Dr Tul Sittisomwong called upon the media organisations to find the truth behind the allegation. "I don't know whether such an action [media bribery] is against any laws but it is improper," he said.
The Pheu Thai Party must also do more to reveal to the public what exactly occurred. An internal investigation should be conducted and anyone who is found to have been involved must be held accountable. The party earlier issued a short statement that did nothing to answer the questions regarding the incident. After all, it is illegal for a political party to offer bribes, and if there is truth in these allegations, a serious crime has been committed.
With the country so politically polarised, the media has found it difficult to perform its duty, especially during the election campaign. The media, both local and international, has sometimes been accused of being biased. Some media outlets have been charged with partisan coverage, of going easy on one political party while taking frequent shots at the other. In other cases, media outlets have been accused of featuring certain political parties more prominently than others.
Against this background, it is imperative for every party involved to uncover the truth and reveal it for all to see. This is a brewing scandal that affects the credibility of two main pillars of democracy - political parties and the media.
Friday, July 29, 2011
Yingluck's first challenge: prove you are not a puppet
EDITORIAL
Yingluck's first challenge: prove you are not a puppet
By The Nation
Published on July 5, 2011
Thailand's first female prime minister must reassure the country she is no 'clone' of her brother if any real national reconciliation is to take place
Yingluck Shinawatra now has to bear both the privilege and the burden of being Thailand's first female prime minister. Yingluck will have to silence her critics by showing that a woman can also be a good premier.
Yingluck has everything she needs to become a good leader. She has been praised by some observant academics for displaying a willingness to compromise, which could be an asset for national reconciliation efforts. Another plus is her experience in the corporate world.
But first of all, Yingluck will have to prove that she is serving the public interest, and not her family business as some critics have claimed.
She will receive the torch passed on by her brother, fugitive former prime minister Thaksin Shinawatra, the champion of populist policies. But Yingluck will not have easy days ahead.
First of all, her government faces the immediate challenge of helping people suffering from price rises, an issue that hurt the Democrat Party.
While the rising prices are an inevitable part of a regional inflation trend, the new government will have to help those people who are most vulnerable to the higher cost of living.
During last week's campaign, Yingluck mentioned several potential measures to cope with price rises, including scrapping the oil fund to lower the cost of fuel. But she will have to consider these crucial policies wisely. Although scrapping the oil fund might be successful in lowering fuel prices in the short run, it would leave government without an important tool to lessen the fluctuation of petrol prices in the future. After all, the oil fund was established as an alternative to using tax money for petrol price intervention.
The minimum wage proposal should also be re-considered. In fact the government alone cannot promise workers a certain wage level, because the decision will have to be agreed upon by a tripartite committee of workers, employers and the government. An unrealistically high minimum wage might make for a sexy election campaign promise, but it could create more job losses in the future as factories shift to outsourcing their labour needs or automation instead of paying more for low-skilled workers.
Economic problems aside, the new government will have to proceed with the process of reconciliation to seek the truth behind the deadly political unrest and provide justice to all parties. The reconciliation process must be aimed at providing justice to all rather than providing amnesty for certain politicians.
The two components of truth and justice are of central importance to reconciliation. While investigation into the facts must continue, the process should also offer justice to all parties involved, with investigations taking into consideration the motives and actions that led to the loss of so many lives.
If these two central components are not addressed properly and fairly, the process of national reconciliation will not be possible.
In the longer term, the Yingluck administration will have to improve the country's competitiveness in preparation for Thailand's entry to the Asean Economic Community, where we will face direct competition from other countries in the region.
Unfortunately, none of the political parties has offered any platform to address Thailand's competitiveness. Instead, they have preferred to focus on populist measures. Such policies should in fact be short-lived, with the government instead turning its focus on how to improve the productivity of the country and its people in the long run. However, the Pheu Thai Party has not yet made any serious plan to improve education or improve the capacity of people in a sustainable manner.
These are some of the prominent issues that the Yingluck government will have to address. Although she managed to lead Pheu Thai to a massive victory, she still has to prove that her government and her political career are not designed to produce an amnesty for Thaksin or to return those of his assets now frozen by the courts.
Of course, Yingluck was handpicked by her brother to become the party's prime ministerial candidate. And he described her as his "clone".
But she has the opportunity to make her own history. It would be a crying shame if our first female prime minister were taking office simply to serve the interests of her family.
Yingluck's first challenge: prove you are not a puppet
By The Nation
Published on July 5, 2011
Thailand's first female prime minister must reassure the country she is no 'clone' of her brother if any real national reconciliation is to take place
Yingluck Shinawatra now has to bear both the privilege and the burden of being Thailand's first female prime minister. Yingluck will have to silence her critics by showing that a woman can also be a good premier.
Yingluck has everything she needs to become a good leader. She has been praised by some observant academics for displaying a willingness to compromise, which could be an asset for national reconciliation efforts. Another plus is her experience in the corporate world.
But first of all, Yingluck will have to prove that she is serving the public interest, and not her family business as some critics have claimed.
She will receive the torch passed on by her brother, fugitive former prime minister Thaksin Shinawatra, the champion of populist policies. But Yingluck will not have easy days ahead.
First of all, her government faces the immediate challenge of helping people suffering from price rises, an issue that hurt the Democrat Party.
While the rising prices are an inevitable part of a regional inflation trend, the new government will have to help those people who are most vulnerable to the higher cost of living.
During last week's campaign, Yingluck mentioned several potential measures to cope with price rises, including scrapping the oil fund to lower the cost of fuel. But she will have to consider these crucial policies wisely. Although scrapping the oil fund might be successful in lowering fuel prices in the short run, it would leave government without an important tool to lessen the fluctuation of petrol prices in the future. After all, the oil fund was established as an alternative to using tax money for petrol price intervention.
The minimum wage proposal should also be re-considered. In fact the government alone cannot promise workers a certain wage level, because the decision will have to be agreed upon by a tripartite committee of workers, employers and the government. An unrealistically high minimum wage might make for a sexy election campaign promise, but it could create more job losses in the future as factories shift to outsourcing their labour needs or automation instead of paying more for low-skilled workers.
Economic problems aside, the new government will have to proceed with the process of reconciliation to seek the truth behind the deadly political unrest and provide justice to all parties. The reconciliation process must be aimed at providing justice to all rather than providing amnesty for certain politicians.
The two components of truth and justice are of central importance to reconciliation. While investigation into the facts must continue, the process should also offer justice to all parties involved, with investigations taking into consideration the motives and actions that led to the loss of so many lives.
If these two central components are not addressed properly and fairly, the process of national reconciliation will not be possible.
In the longer term, the Yingluck administration will have to improve the country's competitiveness in preparation for Thailand's entry to the Asean Economic Community, where we will face direct competition from other countries in the region.
Unfortunately, none of the political parties has offered any platform to address Thailand's competitiveness. Instead, they have preferred to focus on populist measures. Such policies should in fact be short-lived, with the government instead turning its focus on how to improve the productivity of the country and its people in the long run. However, the Pheu Thai Party has not yet made any serious plan to improve education or improve the capacity of people in a sustainable manner.
These are some of the prominent issues that the Yingluck government will have to address. Although she managed to lead Pheu Thai to a massive victory, she still has to prove that her government and her political career are not designed to produce an amnesty for Thaksin or to return those of his assets now frozen by the courts.
Of course, Yingluck was handpicked by her brother to become the party's prime ministerial candidate. And he described her as his "clone".
But she has the opportunity to make her own history. It would be a crying shame if our first female prime minister were taking office simply to serve the interests of her family.
Formulate a long-term strategy for energy security
EDITORIAL
Formulate a long-term strategy for energy security
By The Nation
Published on June 30, 2011
The country needs an effective, well- considered management plan to prevent accidents and ensure a safe, reliable, sustainable power supply
Thai-MarriageThailand should further explore alternative energy, especially environmentally friendly sources, with the recent leak from a natural gas pipeline off Thailand's coast serving as a warning that an energy crisis could strike if the country does not adopt a proper strategy.
The leak in PTT's gas pipeline has affected the country's natural gas supplies. PTT, Thailand's largest energy company, said earlier this week that the leak had reduced natural gas supply by 660 million cubic feet per day, from a total of 4.4 billion cubic feet per day. The leak has affected gas delivery to the Electricity Generating Authority of Thailand (Egat) and its main gas separation plant, PTT said.
In response to the leak, the Energy Ministry has implemented an emergency plan to prevent power shortages. But a more sustainable long-term energy plan should be devised urgently.
At present, Thailand is heavily dependent on natural gas. As much as 70 per cent of the country's total electricity generation is derived from natural gas. The concern over a possible energy crisis is thus legitimate after the leak in the pipe that connects one of PTT's main pipelines in the Gulf with its Platong field. In the aftermath of the incident, Egat now plans to increase power production using fuel oil and hydro-electric sources to offset the reduced natural gas supplies.
While Thailand may still have to depend heavily on natural gas sources, the relevant agencies involved should further explore alternative sources of energy to prevent disruption and blackouts should another leak in the pipeline occur in the future.
Agencies involved should begin a serious effort to explore the advantages and disadvantages of each type of alternative energy source, such as wind or solar power, to find out what source generation will best be able to help meet Thailand's ever-increasing needs. The evaluations should obviously determine which sources of energy are the most economical and environmentally desirable.
Although politicians have long talked about the exploration of alternative energy sources, they need to do much more to bring these ideas to fruition.
His Majesty the King has for a long time pointed out the importance of renewable energy sources. But so far the relevant agencies involved, even the general public, have not fully heeded his advice. It's time to do so, to explore the potential.
An important issue is the impact of energy generation on our environment and whether we have in place appropriate prevention plans to prevent damage. As recent incidents have shown, energy generation and environmental protection must co-exist together. Power plants and transmission facilities need proper maintenance and their safety measures cannot be compromised. The radiation leaks at the Fukushima nuclear plant in Japan serve as a glaring example of the importance of precautionary measures. Japan is known to be a world leader in clean technology but the devastation caused by the March 11 earthquake and tsunami at the Fukushima plant shows that accidents can be beyond our control. However, the damage can be minimised with the proper precautionary measures in place.
We hope that the PTT leak will serve as a lesson for the government and all of us on the importance of energy security and the options that we have in mitigating damage and supply risk. It's time for the government and its agencies to craft an effective energy and resource management plan. Thailand's geography and its background as an agricultural nation must be taken into account to prevent possible damage from unsuitable power generation on our landscape and way of life.
The alternative is to continue with our intransigent attitude and continue to implement inadequate defensive reactions whenever accidents happen.
Formulate a long-term strategy for energy security
By The Nation
Published on June 30, 2011
The country needs an effective, well- considered management plan to prevent accidents and ensure a safe, reliable, sustainable power supply
Thai-MarriageThailand should further explore alternative energy, especially environmentally friendly sources, with the recent leak from a natural gas pipeline off Thailand's coast serving as a warning that an energy crisis could strike if the country does not adopt a proper strategy.
The leak in PTT's gas pipeline has affected the country's natural gas supplies. PTT, Thailand's largest energy company, said earlier this week that the leak had reduced natural gas supply by 660 million cubic feet per day, from a total of 4.4 billion cubic feet per day. The leak has affected gas delivery to the Electricity Generating Authority of Thailand (Egat) and its main gas separation plant, PTT said.
In response to the leak, the Energy Ministry has implemented an emergency plan to prevent power shortages. But a more sustainable long-term energy plan should be devised urgently.
At present, Thailand is heavily dependent on natural gas. As much as 70 per cent of the country's total electricity generation is derived from natural gas. The concern over a possible energy crisis is thus legitimate after the leak in the pipe that connects one of PTT's main pipelines in the Gulf with its Platong field. In the aftermath of the incident, Egat now plans to increase power production using fuel oil and hydro-electric sources to offset the reduced natural gas supplies.
While Thailand may still have to depend heavily on natural gas sources, the relevant agencies involved should further explore alternative sources of energy to prevent disruption and blackouts should another leak in the pipeline occur in the future.
Agencies involved should begin a serious effort to explore the advantages and disadvantages of each type of alternative energy source, such as wind or solar power, to find out what source generation will best be able to help meet Thailand's ever-increasing needs. The evaluations should obviously determine which sources of energy are the most economical and environmentally desirable.
Although politicians have long talked about the exploration of alternative energy sources, they need to do much more to bring these ideas to fruition.
His Majesty the King has for a long time pointed out the importance of renewable energy sources. But so far the relevant agencies involved, even the general public, have not fully heeded his advice. It's time to do so, to explore the potential.
An important issue is the impact of energy generation on our environment and whether we have in place appropriate prevention plans to prevent damage. As recent incidents have shown, energy generation and environmental protection must co-exist together. Power plants and transmission facilities need proper maintenance and their safety measures cannot be compromised. The radiation leaks at the Fukushima nuclear plant in Japan serve as a glaring example of the importance of precautionary measures. Japan is known to be a world leader in clean technology but the devastation caused by the March 11 earthquake and tsunami at the Fukushima plant shows that accidents can be beyond our control. However, the damage can be minimised with the proper precautionary measures in place.
We hope that the PTT leak will serve as a lesson for the government and all of us on the importance of energy security and the options that we have in mitigating damage and supply risk. It's time for the government and its agencies to craft an effective energy and resource management plan. Thailand's geography and its background as an agricultural nation must be taken into account to prevent possible damage from unsuitable power generation on our landscape and way of life.
The alternative is to continue with our intransigent attitude and continue to implement inadequate defensive reactions whenever accidents happen.
Putting populist pledges into action may bankrupt us all
EDITORIAL
Putting populist pledges into action may bankrupt us all
By The Nation
Published on July 7, 2011
The Pheu Thai Party needs to reconsider its promised billion-baht give-aways
The prospective Pheu Thai-led coalition government will now have to reconsider carefully how to implement the pledges it gave to voters during the election campaign.
The Pheu Thai Party lured voters with a raft of policies it promised to implement should it gain power. However, some of those policies may squander taxpayers' money, failing to boost the capacity of the country's human capital and create sustainable wealth for its people.
Pheu Thai is a champion of populist policies, and many voted for the party because they wanted to benefit from such policies. However, when populism is put into action, the country's fiscal health can suffer through the massive budget spending needed to finance give-away programmes.
Pheu Thai ran a campaign full of policies aimed at catching the voter's eye. Included were pledges to raise the national minimum wage to Bt300 per day, offer higher prices to farmers for their rice crops, provide tablet computers to all primary schools, cap mass-transit train fares at Bt20, and ensure college graduates receive support of Bt15,000 per month.
While the party has yet to spell out how it will implement these projects, there are already concerns that some of these policies could be a waste of taxpayers' money, leading to more damage than benefits.
Credit ratings agency Standard and Poor's recently warned of the dangers. "Implementing many of these policies without having proper appropriation of the revenues would adversely affect the country's fiscal position," said Takahira Ogawa, a credit analyst for the agency.
Measures undertaken by the last government over several years to counter the global recession and implement populist policies have already eroded Thailand's fiscal strength, he was quoted as saying.
"Further significant erosion could be detrimental to the current ratings," Ogawa cautioned.
For instance, Pheu Thai may have to reconsider its pledge to distribute computers to each primary school student. The "one tablet per child" programme would amount to 800,000 computers at a cost of about Bt4 billion. But it remains to be seen how this project would contribute to the children's development - especially those living in rural areas with no broadband coverage.
The pledge to raise the minimum wage to Bt300 in 90 days might also lead to uncontrollable inflation. It is crucial that the minimum wage level be acceptable to both employers and workers so as to ensure it is practical and conducive to the business environment. A rate set too high would discourage factories from hiring workers, causing high inflation and creating potential job losses as factories turned to outsourcing.
The rice-pledging programme is also likely to cost more than Bt100 billion. And yet, the programme would not benefit poorer farmers, as they lack the facilities to store and dehydrate rice as required by the pledging programme. The major beneficiary would in fact likely be the rice millers.
Populist policies are not necessarily bad, but they must be implemented only according to necessity, as short-lived programmes to ease the suffering of people and complement other sustainable policies.
It would be unfortunate if political parties used full-blown populist policies so as to inflate the economy's growth figures in the short run, without considering the consequences to the country in the longer term.
Instead, the government has a duty to focus on policies to boost Thailand's capacity and competitiveness in the long term. Populist policies also instil a perception that the government will provide people with economic security, which discourages self-reliance in favour of reliance on hand-outs.
In addition, such policies naturally attract corruption because of the huge sums of taxpayers' money involved.
A country will fail to develop if its government places a higher priority on populist policies than on a sustainable economic platform to boost the country's long-term competitiveness. Although these give-aways may seem like an essential element of economic strategy because voters have become addicted to them, the Pheu Thai Party-led government must reconsider how to implement them in the best interests of the people. Otherwise, we could all be bankrupted altogether.
Putting populist pledges into action may bankrupt us all
By The Nation
Published on July 7, 2011
The Pheu Thai Party needs to reconsider its promised billion-baht give-aways
The prospective Pheu Thai-led coalition government will now have to reconsider carefully how to implement the pledges it gave to voters during the election campaign.
The Pheu Thai Party lured voters with a raft of policies it promised to implement should it gain power. However, some of those policies may squander taxpayers' money, failing to boost the capacity of the country's human capital and create sustainable wealth for its people.
Pheu Thai is a champion of populist policies, and many voted for the party because they wanted to benefit from such policies. However, when populism is put into action, the country's fiscal health can suffer through the massive budget spending needed to finance give-away programmes.
Pheu Thai ran a campaign full of policies aimed at catching the voter's eye. Included were pledges to raise the national minimum wage to Bt300 per day, offer higher prices to farmers for their rice crops, provide tablet computers to all primary schools, cap mass-transit train fares at Bt20, and ensure college graduates receive support of Bt15,000 per month.
While the party has yet to spell out how it will implement these projects, there are already concerns that some of these policies could be a waste of taxpayers' money, leading to more damage than benefits.
Credit ratings agency Standard and Poor's recently warned of the dangers. "Implementing many of these policies without having proper appropriation of the revenues would adversely affect the country's fiscal position," said Takahira Ogawa, a credit analyst for the agency.
Measures undertaken by the last government over several years to counter the global recession and implement populist policies have already eroded Thailand's fiscal strength, he was quoted as saying.
"Further significant erosion could be detrimental to the current ratings," Ogawa cautioned.
For instance, Pheu Thai may have to reconsider its pledge to distribute computers to each primary school student. The "one tablet per child" programme would amount to 800,000 computers at a cost of about Bt4 billion. But it remains to be seen how this project would contribute to the children's development - especially those living in rural areas with no broadband coverage.
The pledge to raise the minimum wage to Bt300 in 90 days might also lead to uncontrollable inflation. It is crucial that the minimum wage level be acceptable to both employers and workers so as to ensure it is practical and conducive to the business environment. A rate set too high would discourage factories from hiring workers, causing high inflation and creating potential job losses as factories turned to outsourcing.
The rice-pledging programme is also likely to cost more than Bt100 billion. And yet, the programme would not benefit poorer farmers, as they lack the facilities to store and dehydrate rice as required by the pledging programme. The major beneficiary would in fact likely be the rice millers.
Populist policies are not necessarily bad, but they must be implemented only according to necessity, as short-lived programmes to ease the suffering of people and complement other sustainable policies.
It would be unfortunate if political parties used full-blown populist policies so as to inflate the economy's growth figures in the short run, without considering the consequences to the country in the longer term.
Instead, the government has a duty to focus on policies to boost Thailand's capacity and competitiveness in the long term. Populist policies also instil a perception that the government will provide people with economic security, which discourages self-reliance in favour of reliance on hand-outs.
In addition, such policies naturally attract corruption because of the huge sums of taxpayers' money involved.
A country will fail to develop if its government places a higher priority on populist policies than on a sustainable economic platform to boost the country's long-term competitiveness. Although these give-aways may seem like an essential element of economic strategy because voters have become addicted to them, the Pheu Thai Party-led government must reconsider how to implement them in the best interests of the people. Otherwise, we could all be bankrupted altogether.
New Govt Should Push PPP Scheme for Investment
EDITORIAL
New govt should push PPP scheme for investment
By The Nation
Published on July 3, 2011
Public Private Partnership is under-utilised, has potential
The new government should strengthen the joint investment scheme with the private sector under the Public Private Partnership (PPP) to cope with possible fiscal challenges. Whoever wins, the government will face a big challenge to manage the expectations of the public, as every political party has promised the voters populist policies that require massive spending.
The promises have led to concern that if the new government has to use the fiscal budget to finance the programmes they have promised to voters, the new government may face a fiscal deficit.
One of the options that the government can explore is the Public Private Partnership (PPP), which the government has under-utilised.
The PPP format will help ease the government's investment budget especially when the new government is likely to face a budget deficit. Bank of Thailand Governor Prasarn Trairatvorakul recently urged the new government to limit the 2012 budget deficit to Bt350 billion to avoid pressure on fiscal policy and inflation.
The government had targeted that the investment budget would account for 5.5 per cent of GDP. However, it has so far managed to invest only 3.5 per cent of GDP due to limiting constraints. Besides, a certain amount of budget has been used to finance populist measures.
Examples of PPP projects are the Bangkok Mass Rapid Transport. Currently, four MRT projects - the Purple Line, Dark Green, Green and Blue Lines - come under the PPP format. The value of these projects combined is Bt22.7 billion. The value was small compared to the government's target to boost the value of PPP investment to Bt1.29 trillion.
If the government better utilises the PPP platform, it can draw the money from the private sector to finance the investment, easing the government's fiscal burden.
However, the government has under-utilised the PPP platform. First of all, the private sector was concerned about political instability and uncertainties in the aftermath of a change in government. They were afraid that every time the government changes, its policy also changes.
Another hurdle discouraging the private sector from participating in the PPP project is the legal hurdle or the uncertainty regarding legal interpretations. As things turned out, companies participating in public projects have sometimes encountered legal problems or unpredictable interpretations of the law.
The PPP format can be done in two formats: Build-Transfer, where the government maintains ownership of the project and Built-Operate-Transfer, where the private sector finds the source of investment.
In fact, if the government can manage to provide clear and transparent procedures for PPP investment projects as well as clearing political and legal hurdles, the private sector would want to take part in the PPP investment. This is because the private sector could manage to lessen the risk due to the government's support.
Apart from helping ease the government's fiscal burden, the PPP would also help boost the capacity of the private sector. PPP would provide an option on fund raising, which is one of the challenges facing Thai operators, especially after the Asean market is integrated under the so-called Asean Economic Community, which will be fully formed in 2015. Thai private sector will face direct competition with all the other companies in Asean countries.
The traditional form of investment, where the government has to shoulder most of the investment budget, would not help enhance the competitiveness of the private sector. And the Thai private sector will not be able to maintain its competitiveness unless companies find solutions to the following issues: how to find comprehensive fund raising, value-chain solutions, effective partnership programs and hedging instruments.
Thus, the new government should look for options that promote investment without adding pressure on the budget as well as promote local competitiveness instead of focusing on spending the fiscal budget to finance the majority of its investment in the future.
New govt should push PPP scheme for investment
By The Nation
Published on July 3, 2011
Public Private Partnership is under-utilised, has potential
The new government should strengthen the joint investment scheme with the private sector under the Public Private Partnership (PPP) to cope with possible fiscal challenges. Whoever wins, the government will face a big challenge to manage the expectations of the public, as every political party has promised the voters populist policies that require massive spending.
The promises have led to concern that if the new government has to use the fiscal budget to finance the programmes they have promised to voters, the new government may face a fiscal deficit.
One of the options that the government can explore is the Public Private Partnership (PPP), which the government has under-utilised.
The PPP format will help ease the government's investment budget especially when the new government is likely to face a budget deficit. Bank of Thailand Governor Prasarn Trairatvorakul recently urged the new government to limit the 2012 budget deficit to Bt350 billion to avoid pressure on fiscal policy and inflation.
The government had targeted that the investment budget would account for 5.5 per cent of GDP. However, it has so far managed to invest only 3.5 per cent of GDP due to limiting constraints. Besides, a certain amount of budget has been used to finance populist measures.
Examples of PPP projects are the Bangkok Mass Rapid Transport. Currently, four MRT projects - the Purple Line, Dark Green, Green and Blue Lines - come under the PPP format. The value of these projects combined is Bt22.7 billion. The value was small compared to the government's target to boost the value of PPP investment to Bt1.29 trillion.
If the government better utilises the PPP platform, it can draw the money from the private sector to finance the investment, easing the government's fiscal burden.
However, the government has under-utilised the PPP platform. First of all, the private sector was concerned about political instability and uncertainties in the aftermath of a change in government. They were afraid that every time the government changes, its policy also changes.
Another hurdle discouraging the private sector from participating in the PPP project is the legal hurdle or the uncertainty regarding legal interpretations. As things turned out, companies participating in public projects have sometimes encountered legal problems or unpredictable interpretations of the law.
The PPP format can be done in two formats: Build-Transfer, where the government maintains ownership of the project and Built-Operate-Transfer, where the private sector finds the source of investment.
In fact, if the government can manage to provide clear and transparent procedures for PPP investment projects as well as clearing political and legal hurdles, the private sector would want to take part in the PPP investment. This is because the private sector could manage to lessen the risk due to the government's support.
Apart from helping ease the government's fiscal burden, the PPP would also help boost the capacity of the private sector. PPP would provide an option on fund raising, which is one of the challenges facing Thai operators, especially after the Asean market is integrated under the so-called Asean Economic Community, which will be fully formed in 2015. Thai private sector will face direct competition with all the other companies in Asean countries.
The traditional form of investment, where the government has to shoulder most of the investment budget, would not help enhance the competitiveness of the private sector. And the Thai private sector will not be able to maintain its competitiveness unless companies find solutions to the following issues: how to find comprehensive fund raising, value-chain solutions, effective partnership programs and hedging instruments.
Thus, the new government should look for options that promote investment without adding pressure on the budget as well as promote local competitiveness instead of focusing on spending the fiscal budget to finance the majority of its investment in the future.
Rich heroes show wealth can have a kindly face
EDITORIAL
Rich heroes show wealth can have a kindly face
By The Nation
Published on June 27, 2011
Thai philanthropists reveal, by example, good causes bring generous returns to business and community
The four wealthy Thais listed as Heroes of Philanthropy by Forbes Asia should set an example for local businesses to return something to society. Boonchai Benjarongkul of Total Access Communication, Tan Passakornnatee of Mai Tan Brand, Bilaibhan Sampatisiri of Nai Lert Park Hotel Co and Thongma Vijitpongpun of Pruksa Real Estate made the list of 48 philanthropists in Asia who are doing good, from helping earthquake victims to sending poor kids to college.
According to Forbes' release, Forbes Asia has tried to include mostly people who gave away their own money and not their companies'. Sometimes philanthropists do both, and sometimes they own such a large share of their company that corporate giving is personal giving.
It's welcoming that these business people have supported the cause that they are passionate about. And we hope to see more of them.
Boonchai has been devoting himself to supporting education and culture since selling control of his company in 2005. He plans to open the Thai Contemporary Art Museum in Bangkok this year to showcase his collection of Thai art.
Bilaibhan's interest is obviously in art and conservation. The president of the Siam Society is helping to lead efforts to conserve the nation's fast-disappearing architectural heritage. She also serves as president of a Thai fund involved in protecting wild elephants, and runs the Lert Sin Foundation, which supports healthcare and education.
Tan pledges half of his net profits to his Tan Pan Foundation, which works to improve education, the environment and tourism. He gave US$67,000 (Bt2.1 million) from his TV appearances for new buildings at Bor Thong KinderEdugarten in Chon Buri. He has also contributed to Japanese earthquake relief and raised more money for a total of $143,000.
And Thongma donated some $660,000 to hospitals, Buddhist organisations and schools in 2010 and 2011. A civil engineer by training, he has also channelled most of his education-related giving to the engineering field.
Growing at the expense of consumers
What these business people have done was part of a pledge to give back. After all, many businesses flourish by successfully coexisting with the community. They can enjoy real business by spending their money for a good cause by providing people with access to opportunities to elevate the wellbeing of the community all together.
Unfortunately, many businesses have expanded at the expense of consumers. For instance, their growth has harmed the surrounding environment by polluting the air, water and soil. Some companies expanded by weakening farmers through their massive bargaining power. Some businesses grew by suppressing fair competition at the expense of consumers.
This trend must be stopped. And these exploiting businesses should review their strategy to see what they should have done.
Local businesses can also take a cue from the US where top billionaires are campaigning to encourage their affluent friends to do good for the community.
Bill Gates and Warren Buffett recently joined forces to prod other billionaires to publicly pledge to give away at least 50 per cent of their wealth during their lifetime or upon their death for good causes as part of a campaign called "The Giving Pledge".
This is because business people have to fulfil their obligation as good citizens in the community.
But it does not take a billionaire to make a social contribution. In fact, everyone, big or small, can get involved in philanthropy work by simply doing whatever they can in their capacity. Everyone can be a social changer.
In fact, the value of the donated amount may not be as powerful as each individual's will to be more selfless and mindful of what they can do or the negative consequences that they can leave to society.
For instance, every citizen should be mindful of the environmental impact that their business may impart, or whether they have looked after their customers by providing them with safe and non-hazardous products, or whether they have taken the best care of people living in their factories' neighbourhoods.
It will be useless for a corporation to donate zillions after its business has damaged the environment or caused casualties to the people from its operation. No charity money will be able to offset the bad consequences that a company has caused because of its carelessness and selfishness.
Rich heroes show wealth can have a kindly face
By The Nation
Published on June 27, 2011
Thai philanthropists reveal, by example, good causes bring generous returns to business and community
The four wealthy Thais listed as Heroes of Philanthropy by Forbes Asia should set an example for local businesses to return something to society. Boonchai Benjarongkul of Total Access Communication, Tan Passakornnatee of Mai Tan Brand, Bilaibhan Sampatisiri of Nai Lert Park Hotel Co and Thongma Vijitpongpun of Pruksa Real Estate made the list of 48 philanthropists in Asia who are doing good, from helping earthquake victims to sending poor kids to college.
According to Forbes' release, Forbes Asia has tried to include mostly people who gave away their own money and not their companies'. Sometimes philanthropists do both, and sometimes they own such a large share of their company that corporate giving is personal giving.
It's welcoming that these business people have supported the cause that they are passionate about. And we hope to see more of them.
Boonchai has been devoting himself to supporting education and culture since selling control of his company in 2005. He plans to open the Thai Contemporary Art Museum in Bangkok this year to showcase his collection of Thai art.
Bilaibhan's interest is obviously in art and conservation. The president of the Siam Society is helping to lead efforts to conserve the nation's fast-disappearing architectural heritage. She also serves as president of a Thai fund involved in protecting wild elephants, and runs the Lert Sin Foundation, which supports healthcare and education.
Tan pledges half of his net profits to his Tan Pan Foundation, which works to improve education, the environment and tourism. He gave US$67,000 (Bt2.1 million) from his TV appearances for new buildings at Bor Thong KinderEdugarten in Chon Buri. He has also contributed to Japanese earthquake relief and raised more money for a total of $143,000.
And Thongma donated some $660,000 to hospitals, Buddhist organisations and schools in 2010 and 2011. A civil engineer by training, he has also channelled most of his education-related giving to the engineering field.
Growing at the expense of consumers
What these business people have done was part of a pledge to give back. After all, many businesses flourish by successfully coexisting with the community. They can enjoy real business by spending their money for a good cause by providing people with access to opportunities to elevate the wellbeing of the community all together.
Unfortunately, many businesses have expanded at the expense of consumers. For instance, their growth has harmed the surrounding environment by polluting the air, water and soil. Some companies expanded by weakening farmers through their massive bargaining power. Some businesses grew by suppressing fair competition at the expense of consumers.
This trend must be stopped. And these exploiting businesses should review their strategy to see what they should have done.
Local businesses can also take a cue from the US where top billionaires are campaigning to encourage their affluent friends to do good for the community.
Bill Gates and Warren Buffett recently joined forces to prod other billionaires to publicly pledge to give away at least 50 per cent of their wealth during their lifetime or upon their death for good causes as part of a campaign called "The Giving Pledge".
This is because business people have to fulfil their obligation as good citizens in the community.
But it does not take a billionaire to make a social contribution. In fact, everyone, big or small, can get involved in philanthropy work by simply doing whatever they can in their capacity. Everyone can be a social changer.
In fact, the value of the donated amount may not be as powerful as each individual's will to be more selfless and mindful of what they can do or the negative consequences that they can leave to society.
For instance, every citizen should be mindful of the environmental impact that their business may impart, or whether they have looked after their customers by providing them with safe and non-hazardous products, or whether they have taken the best care of people living in their factories' neighbourhoods.
It will be useless for a corporation to donate zillions after its business has damaged the environment or caused casualties to the people from its operation. No charity money will be able to offset the bad consequences that a company has caused because of its carelessness and selfishness.
Handout Policies could lead to a bigger crash
EDITORIAL
Handout policies could lead to a bigger crash
By The Nation
Published on June 23, 2011
If voters become so reliant on populist promises, they will be unable to deal with the effects of any future crisis without the help of the government
Local industrialists recently indicated they were not enthusiastic about the economic policies being offered by the major political parties because there is nothing innovative about them. But a lack of innovation on the part of political parties is not a surprise to local businesses.
While the business community is not happy with the economic platforms on offer, some business people and economists are also concerned that if the future government implements these promised economic policies, they could drag the nation downhill in the near future.
Undisciplined populist spending programmes could lead to fiscal disaster, while the promises of low tax rates and wage hikes could add pressure on inflation. In addition, an unreasonable wage hike would affect the country's price competitiveness.
During this election campaign, the political parties have aggressively marketed their policy offers and tried to trump rival parties with amounts of giveaway money and handouts. The Democrats have proposed increasing the minimum wage by 25 per cent over two years. Pheu Thai has offered Bt300 per day. Fierce competition between the two largest parties has encouraged a smaller party, Chart Pattana Puea Pandin, to offer a Bt350 minimum wage.
While the Democrat Party offers to guarantee the rice price for farmers at around Bt11,000 per tonne, Pheu Thai upped this offer by proposing to pledge rice at Bt15,000 per tonne.
These are only a few examples of what the parties are now offering, including a credit card debt amnesty, low-interest loans for cars and houses, and an iPad for every student.
These populist offers have unfortunately framed the political debate into what each party can gain instead of tangible and effective economic platforms to promote capacity and competitiveness in the long run.
The business sector has never been enthusiastic about these promises because they know that most of it is simply rhetoric to attract voters.
While political parties in the past tended to outline their policies in broad terms, such as "the party will promote rural empowerment" or "strengthen business competitiveness", they now treat voters as consumers and customers. They offer aggressive marketing gimmicks and extravagant promises which could be a recipe for disaster if actually implemented.
The problem with these gimmicks is that they specify the exact amount of money each party will give, so voters can calculate the gain. Politicians now treat voters not as dignified citizens who cast ballots to take control of their future, but as customers who base their decision on how much they will receive.
It does not take a rocket scientist to realise that the business community and ordinary voters now do not set high hopes for creative or innovative policies. But if the political parties continue to lure voters with cash and handouts, they will simply lead the country to disaster. If this happens, a future crisis could be worse than the financial crisis of 1997 because people will no longer be equipped to overcome difficulty on their own, but will desperately wait for the government to rescue them.
Handout policies could lead to a bigger crash
By The Nation
Published on June 23, 2011
If voters become so reliant on populist promises, they will be unable to deal with the effects of any future crisis without the help of the government
Local industrialists recently indicated they were not enthusiastic about the economic policies being offered by the major political parties because there is nothing innovative about them. But a lack of innovation on the part of political parties is not a surprise to local businesses.
While the business community is not happy with the economic platforms on offer, some business people and economists are also concerned that if the future government implements these promised economic policies, they could drag the nation downhill in the near future.
Undisciplined populist spending programmes could lead to fiscal disaster, while the promises of low tax rates and wage hikes could add pressure on inflation. In addition, an unreasonable wage hike would affect the country's price competitiveness.
During this election campaign, the political parties have aggressively marketed their policy offers and tried to trump rival parties with amounts of giveaway money and handouts. The Democrats have proposed increasing the minimum wage by 25 per cent over two years. Pheu Thai has offered Bt300 per day. Fierce competition between the two largest parties has encouraged a smaller party, Chart Pattana Puea Pandin, to offer a Bt350 minimum wage.
While the Democrat Party offers to guarantee the rice price for farmers at around Bt11,000 per tonne, Pheu Thai upped this offer by proposing to pledge rice at Bt15,000 per tonne.
These are only a few examples of what the parties are now offering, including a credit card debt amnesty, low-interest loans for cars and houses, and an iPad for every student.
These populist offers have unfortunately framed the political debate into what each party can gain instead of tangible and effective economic platforms to promote capacity and competitiveness in the long run.
The business sector has never been enthusiastic about these promises because they know that most of it is simply rhetoric to attract voters.
While political parties in the past tended to outline their policies in broad terms, such as "the party will promote rural empowerment" or "strengthen business competitiveness", they now treat voters as consumers and customers. They offer aggressive marketing gimmicks and extravagant promises which could be a recipe for disaster if actually implemented.
The problem with these gimmicks is that they specify the exact amount of money each party will give, so voters can calculate the gain. Politicians now treat voters not as dignified citizens who cast ballots to take control of their future, but as customers who base their decision on how much they will receive.
It does not take a rocket scientist to realise that the business community and ordinary voters now do not set high hopes for creative or innovative policies. But if the political parties continue to lure voters with cash and handouts, they will simply lead the country to disaster. If this happens, a future crisis could be worse than the financial crisis of 1997 because people will no longer be equipped to overcome difficulty on their own, but will desperately wait for the government to rescue them.
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