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Published on July 19, 2007

Before voting in the referendum, which in my view is a highly important channel to usher the country back into normalcy, the public should refrain from letting themselves be influenced by feelings or prevailing trends. Rather, they should have an opportunity to carefully consider the substance of the draft constitution by themselves.

As an economist, I have compared the 1997 constitution with the 2007 draft, particularly as they relate to policy thinking and economic issues. I hope my comparative analysis provides members of the public with better information for their decision.

The concept behind both the 1997 and 2007 constitutions has not changed; namely, the emphasis is on a liberal market economy, market mechanisms, and state responsibility in providing public welfare.

Such a line of thinking resonates with the concept of "social liberalism", the central tenet of which involves the provision of equal economic opportunities for all and allowing for the free function of market mechanisms - with the state exerting minimal control. Examples include the provision of laws against market monopolies, the setting up of oversight bodies, and the setting of a minimum wage, etc. The state also has the responsibility to provide education, public healthcare, and other public services on an equal basis using the national tax base.

If we consider the similarities between the two charters, we will find that all the provisions related to the economy in the 1997 version remain intact in the 2007 draft. These include the regulatory oversight to ensure a liberal economy with checks-and-balance mechanisms; the promotion of equitable income distribution; the provision of state subsidies for education and healthcare, and the decentralisation of fiscal authorities to local administrations.

The added substance in the new charter mostly concerns minor additions, such as the stipulation concerning methods of income distribution through the protection, promotion, and expansion of career opportunities, and a detailed provision enabling the poor and the disabled to have access to educational subsidies.

The new constitution has three new major additions:

The first one involves the provision that a treaty or an agreement that provides for a change in the jurisdiction of the state, or which has an impact on economic or social security, and result in trade, investment, or budgetary commitments must be approved by the National Assembly and open to public participation. The details of such agreements must be made publicly available. In addition, organic laws concerning compensation for those adversely affected by such agreements have been added.

Another addition involves clarifying the rules of budgetary procedures while making them more transparent and subject to better oversight with a view to improving economic stability. For these purposes, there is a proposal that the national budget bill must include detailed information on state revenues and fiscal status in the past year. There is also a provision requiring the promulgation of fiscal and monetary laws to serve as a framework for public expenditures, and demanding that an explanation be presented to the National Assembly on revenues from state enterprises that will not be returned to state coffers or off-budget spending.

The last addition concerns state enterprise reform. A clause stipulates that the state must provide basic essential infrastructure that is not monopolised by the private sector, and that the state cannot own more than 51 per cent of the basic networks of infrastructure essential to the people's lives or national security.

When considering only the economic provisions, I am of the view that the 2007 draft charter is an effort to correct the loopholes of the previous constitution that were responsible for several economic problems in the past administration, such as the negotiation of free-trade agreements, state enterprise reforms, the lack of transparency in public finance and budgetary procedures, income distribution, and educational subsidies.

I agree with the above additions, particularly the legislative clauses supervising the process of entering into international treaties and agreements and requiring better transparency and oversight for national budgetary procedures. The principle that bars private sector monopoly of basic infrastructure is also a positive addition.

Nevertheless, there remain some other economic issues that should also be incorporated into the new charter, such as the stipulation that contract-making between the pubic and private sectors be more transparent and subject to more scrutiny, and that consumer protection and compensation be more efficient, etc.

The inadequacy of the national budget for public welfare remains another issue that has not been tackled in the new draft charter. Although the provision of free compulsory education is based on a good principle, it may cause serious budgetary implications.

My view is that people who can afford to pay for education should be allowed to contribute to the national budget. This involves finding ways to expand the tax base to alleviate the budgetary burden of providing state welfare.

However, a more important issue is that emphasis should be given not only to the constitution's substantive provisions, but also to whether the government seriously implements and concretises the principles enshrined in the charter. It is crucial not to repeat past mistakes whereby the constitution is not much more than letters on a piece of paper.

 

Dr Kriengsak Chareonwongsak is a senior fellow at Harvard University's Centre for Business and Government.

Dr Kriengsak Chareonwongsak

Special to The Nation

Cambridge, Massachusetts