Central bank board looks suspicious

The newly-enacted Bank of Thailand Act has been authored to ensure the central bank - which has been traditionally assigned to guard against economic turmoil - will function more effectively with the assistance and fair judgement of qualified personnel from outside who should have no political connections. However, Finance Minister Surapong Suebwonglee surprisingly nominated Pornchai Nuchsuwan, former director of the Budget Bureau Office, as the chairman of the bank's board. Pornchai was not only a former adviser to deposed prime minister Thaksin Shinawatra but is also among the former PM's Cabinet members accused of being involved in launching the two- and three-digit lotteries.

Most of the new members of the central bank's board are reportedly close to the People Power Party. This is despite the spirit of the Bank of Thailand Act which aims for a diverse representation of qualified people to serve the best interests of the public. The board is powerful because it nominates members of the central bank's key committees including the Monetary Policy Committee, which decides whether to raise or lower the interest rate.

The Bank of Thailand Board members should be able to exercise independent judgement to ensure the monetary policy is executed effectively for sustainable economic prosperity. The danger here is that politicians will press the board to introduce monetary policies to score short-term popularity.

Some new members of the board are a disappointment. A number of academics reacted to the news by saying that the nominations were clearly politically driven. Some board members don't have sufficient monetary background while some are still engaged in legal hangovers from the days of the Thaksin government.

Now that the Samak Cabinet has approved the appointments, we can only hope that the central bank board members prove their critics wrong.