Speaking at a seminar hosted by the National Institute of Development Administration entitled "Thai Economic Trends Over the Next Decade", Pridiyathorn presented a broader vision than in any of his previous speeches. His speeches usually involve macroeconomics and monetary policy, but recently he has been touching on social issues.

He said a concept of "green gross domestic product", which has been developed by the National Economic and Social Development Board (NESDB) and a "well-being index" should be added as indicators measuring the country's development, rather than economic growth alone.

The green GDP includes social costs from economic development such as energy or national resource consumption, while the well-being index will measure seven categories, including working life and family happiness.

He suggested that before the green GDP is implemented over the next few years, the government's economic management progress should be measured to steer it in the right direction.

He said that although economic development had benefited the country, it had also caused many problems, including a widening income gap and other social costs. In addition, imitation of Western culture, globalisation and soaring oil prices have put additional pressure on the country.

The richest people representing 20 per cent of the total population receive 56.5 per cent of total income, 13 times higher than that of the poorest 20 per cent who gain only 4.2 per cent.

"If we still take current ways of economic management, realising only high economic growth and business expansion, rural areas will be left further behind. Social values will worsen and energy consumption will cause shortages. The government should find ways to maintain economic management without creating more problems," he said.

For mainstream economic development, the governor proposed that the business sector respond actively to global competition to keep market share and bolster export income. Cluster development, which would reduce operation costs, should be adopted in many sectors such as automobiles and parts, electronics, rubber and instant foods.

For rural development, the governor suggested that the NESDB's 10th plan should make sure that rural people could support and implement government policy efficiently. For example, some villages could not handle the Bt1 million they received from the Village Fund scheme due to a lack of experience.

Community development projects should encourage villagers to secure a second income source under well-prepared advisers, he added.

The government should also monitor the business sector on the quality of life and environmental protection, and protect retail businesses from the dominance of giant companies.

Meanwhile, the central bank announced yesterday that the current-account deficit hit an 11-month high of US$936 million (Bt3.5 billion) in May, putting additional pressure on economic stability alongside inflation.

However, BOT's senior director of the Monetary Policy Group, Suchada Kirakul, insisted that the deficit would not be higher than its forecast of $2 billion although export deceleration and import acceleration would be seen in the second half of the year.

There was a trade deficit of $760 million in the month.

This was caused by increased imports, which totalled $11.5 billion, a record monthly high - the previous highest level being $10.5 billion posted in March 2005. Despite a tourism turnaround, $1 billion in dividend payments abroad also built up a deficit in the service and transfer accounts.

Imports of consumer goods rose 25.9 per cent in May, due mainly to a 58-per-cent increase in electronic appliances and 15-per-cent growth in household equipment. As a result, the Bank of Thailand is closely monitoring imported consumer goods, Suchada said.

"We found that LCD screens have been imported for re-export, but we must take a closer look," she said.

Anoma Srisukkasem

The Nation