Denuded hills have turned into mudslides after heavy downpours, Adis Israngkura, a researcher at the Thailand Development Research Institute, an independent think thank, said yesterday.

The assets-to-capital programme pushed by the Thaksin administration over the past five years might have played a role in the disaster but before this policy, villagers also cut down trees near their communities, Adis said.

Academics and knowledgeable locals upcountry have long criticised the government's capitalisation scheme for encouraging people to intrude on public land and forest reserves for short-term economic gain.

The scheme allows people to put up public land as collateral for bank loans, which encourages villagers to level forests in order to occupy the land.

The National Economic and Social Development Board (NESDB), which is laying out the country's 10th National Plan, has also realised that the past nine economic development plans have ignored the environment.

Economic development has promoted deforestation and degradation of other national resources nationwide, according to the NESDB's report.

NESDB secretary-general Ampon Kitti-ampon was not available for comment yesterday.

Finance Ministry spokesman Somchai Sujjapongse defended the asset capitalisation initiative, saying it was unlikely to have contributed to this calamity. Villagers have long practised clearing forests and selling logs for money, he said.

Another issue is zoning as villagers have been building their homes in high-risk areas.

Meanwhile, Varathep Rattanakorn, caretaker deputy finance minister, will today discuss an aid package for flood victims with the Fiscal Policy Office.

Varathep is expected to order the Government Savings Bank, Bank for Agriculture

and Agricultural Cooperatives and Small and Medium Enterprise Development Bank of Thailand to provide financial assistance.

The relief measures would include extending debt repayment periods, cutting loan interest rates, extending new loans and offering grace periods on principal and interest.

Wichit Chaitrong

The Nation