Thaksinomics 'not a driver of growth'
Members of the country's foremost development research think-tank said yesterday Thaksin Shinawatra's economic policy had not contributed to the country's bullish economic performance over the past five years, as the prime minister has frequently claimed.
Economists at the Thailand Development Research Institute (TDRI) said the Thaksin government had instead left more questions hanging over economic performance, transparency of policy management, populist policies and universal healthcare schemes.
The four economists presented their assessment of "Thaksinomics" during a press conference at the Thai Journalists' Association.
"We are accused by the government of being its regular critics. However, we have left bias behind and conducted our analysis based on facts and numbers," said Ammar Siamwalla, a respected TDRI economist.
He insisted the assessment was the personal opinion of the economists rather than an official TDRI statement.
The economists came up with four conclusions.
First, Thaksin should not take all of the credit for the economic recovery from the 1997 crisis.
He said this government had benefited from the economic stability laid down by the previous government of Chuan Leekpai, which had striven for fiscal austerity, said Somchai Jitsuchon, TDRI's research director for macroeconomic development.
Thaksin has often said his government was the main factor in driving the country out of the clutches of the International Monetary Fund.
However, the economists said the process of recovery had already been "auto-piloted" from the previous government.
Besides this, the process for economic recovery bore fruit under the Thaksin government, as it took five and a half years for the country to recover.
Among Asian countries affected by the financial crisis, Thailand suffered most, with economic growth of minus 6.1 per cent from 1997-98.
The deeper economic problems led to a later recovery compared with that for Malaysia, the Philippines, South Korea and Singapore, whose recovery took only two and a half years, said Somchai.
Second, there is no evidence to show that the Thai economy under Thaksin has performed better than that of neighbouring countries.
Thailand's average economic growth was 5 per cent from 2001-05, better by 0.5 to 1 per cent than other Asean countries.
Somchai noted, however, that growth was higher only during the first three years of the Thaksin government, with the last two years being the same as for other countries.
Somchai said the government may blame the lower growth rate on the tsunami for having an adverse affect on the tourism industry, but any real impact was small, shaving only 0.35 per cent off of last year's GDP.
Moreover, the dual-track policy, a key part of Thaksinomics, has not done much to promote domestic consumption. A rise in domestic consumption was the result of a low-interest-rate environment.
Furthermore, the public did not fully use measures under the dual-track policy to promote their capabilities, which has led to debt-accumulation problems.
Nonetheless, returns on stock-market investment have increased remarkably under the Thaksin government.
But returns in the past two years have diminished.
Overall, returns from stock-market investment under Thaksin have yet to recoup the accumulated losses that investors incurred from the financial crisis.
"So, we cannot claim that Thaksin's economic management was obviously better than that for other countries. Export demand largely contributed to growth," he said.
The economists also noted that Thaksin's populist policies had not boosted capacity among borrowers.
The Thaksin government allocated Bt80 billion to a revolving fund aimed at increasing income, reducing expenditure and creating opportunity for villagers.
Among the various populist programmes, spending on the Village Fund scheme was the highest, with the fastest disbursement, said Somchai.
Somchai also charged that government debt restructuring for the poor missed its target.
He said the government register of the poor was not accurate and pointed out that 84.9 per cent those who registered as poor were in fact not poor.
He said 82 per cent of those who did not show up for registration were poor.
While the scheme was created with good intentions for helping the poor, it passed over the poor, he said.
Somkiat Tangkitvanich, a TDRI research director, also said the Thaksin government had implemented a number of policies that also, by coincidence, benefited Shin Corp subsidiaries.
For instance, the Board of Investment granted an eight-year tax exemption for Shin Satellite's iPSTAR project. The corporate tax exemption in this case totalled Bt16 billion.
Moreover, the Thai government transferred the risk from the Burmese government to Thai taxpayers by guaranteeing the Exim Bank's loan extension for the Burmese government for telecom infrastructure development, of which a certain amount was for purchasing the services from one Thai company.