Govt fails test on rising prices

According to The Nation's survey of people from different walks of life, most share the same view that the cost of living has been rising fast since the beginning of this year while their incomes have not increased in tandem.

Anek, 52, a noodle vendor, said that the economic situation is getting worse because his daily expenses have risen by 20 per cent. He complained that his income has remained unchanged and at times has dropped because of the slowing economy.

"I have not seen the government taking action to tackle the rising cost of living," he said. "I remember the ruling party said during the election campaign that it had a policy to raise income and reduce living costs. It is so disappointing that we have seen nothing from the government after it assumed power more than three months ago. The only progress that I can see is a rise in political conflict." 

A government official said that despite the government's move to raise the salary of civil servants by 5 per cent, this amount is barely enough to meet daily expenses.

"The prices of consumer goods are rising," she said. "Now, I have no savings for my children as my income goes to absorb all daily expenses." 

The Commerce Ministry has become a target of criticism because its main task is to look after inflation and the availability of goods. 

Fortunately, export growth has steadied the economy but other consumer goods are witnessing a sharp rise in price.

The price of jasmine rice has skyrocketed from Bt160-Bt180 to Bt250-Bt280 for a five-kilogram bag. Regular white rice has seen the price rise from Bt10-14 per kilo to Bt22-26; fertiliser from Bt13,000 to Bt22,000 per tonne, and cooking oil from Bt39 to Bt47.50 per kilo. Sugar is up by Bt5 per kilo and a one-dish meal has risen from Bt20-Bt25 to Bt30-Bt35.

Suppliers and manufacturers have descended on the ministry to urge retail price increases to cope with spiralling production costs. This has put tremendous pressure on the Commerce Ministry.

More than 60 manufacturers of 500 products have asked the ministry to allow an increase in their retail prices. Those are from various sectors, including milk, fertiliser, animal feed, and soft drinks. 

In the wake of domestic price rises, Commerce Minister Mingkwan Sangsuwan has drawn up only vague strategies on how to reduce the burden on Thais. These strategies have not been executed or followed through to the end.

The presence of two deputy commerce ministers, Viroon Tejapaiboon, and Banyin Tangpakorn, has not improved the situation because they are largely overshadowed by Mingkwan.

However, Mingkwan's job approval rating was one of the highest in a recent poll, thanks to his shrewd public relations management.

At first, Mingkwan announced that his ministry would control the price increase of consumer goods by freezing the prices of some 30 essential items to help low- and middle-income people. However, he could not accomplish this after three months. Most manufacturers of those goods - pork, rice, cooking oil, fertiliser, sugar, and even ready-to-eat food - have increased their retail prices. Board of Trade of Thailand secretary-general Pornsilp Patcharintanakul said Mingkwan has displayed good intentions to tackle the problem of higher prices yet he does not seem to have a long-term strategy to solve the problem.

"The government should rather focus on solving the problem with long-term measures such as increasing the yield of agricultural goods and focusing on alternative energy development," he said.

He added that he would like to give the minister another three months to ease the problem.

Federation of Thai Industries vice chairman Payungsak Chartsutipol said that Mingkwan has  passed the first test but he does not get a high score.

"The ministry cannot control inflation or the rising prices of goods. It is time for the government to listen more to private enterprise and allow market mechanisms to work, rather adopting a one-man-show stance," he said.

Rice Exporters Association president Chookiat Ophaswongse said that Mingkwan has shown high efficiency in marketing, but sometimes he messes things  up, in particular rice price management.

"Overall, Mingkwan has won over other ministers in the Cabinet. But he has not yet solved the biggest problem of escalating prices and inflation," he said.

However, exports have saved the ministry's face thanks to a global shortage of staples. This factor has encouraged the export of Thai commodities this year to hit the highest record not only in value but also in volume.

The ministry hopes to achieve its targeted growth of 12.5 per cent to US$171 billion (Bt5.4 trillion) this year with high export performance in all sectors, particularly agricultural goods.

Thailand's export value in the first four months of the year grew significantly by 22.24 per cent. However, mainly external factors have pushed the robust export growth. 

Mingkwan has spent three months solving the problems of consumer goods prices and inflation. The ministry's new focus is to promote the export of Thai fruits. Despite a big campaign in many provinces, growers still complain that prices have dropped.