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The first issue is the measure introduced by the Minister of Commerce on rice pledging for the second crop at a price much higher than the market price, which would definitely cause a financial loss of not less than Bt5000 million while not being able to push up the market price as intended. In addition, the measure will reduce the amount of rice available for export by the private sector. The customary buyers who cannot find sufficient supply from Thai exporters will, without doubt, turn to exporters in other countries such as Vietnam. The reduction of rice exports will aggravate the ongoing economic contraction. Details of this issue appeared in my article in Post Today last Monday. Further checking with experts in rice trade or with the adviser to the Prime Minister on the rice issue could confirm this fact and there is still time to prevent further damage.

The second issue is the proposals presented by the Raksa Muang Thai group when they met two weeks ago. It is about how to improve the planned budget deficit of Bt390,000 million for the year 2010 to become more effective in stimulating the economy and creating jobs for those laid-off from export-related industries. Two proposals were made. Firstly, the government should reduce the excessive increase in certain regular expenditure and convert that excess amount into investment expenditure that creates jobs. One particular expenditure increase that needs attention is the state personnel expenditure, which was set to increase by 7.1 per cent, mainly for an annual increase of salary. A 7-per-cent increase in salary would not be excessive at a time when the inflation rate is around 3-4 per cent, as the increase in real income is a little over 3 per cent. However, at a time when the rate of inflation is down to almost zero per cent and would definitely be under one per cent for the year, an increase of 7 per cent, which would generate an increase in real income by 6-7 per cent, is definitely excessive, especially when the revenue from tax collection is expected to be about Bt200,000 million less than the original target and also when a lot of people in export and tourism industries are being laid off. If the government has the courage to cut the salary increase for government officials down to 4 per cent, which in fact would still generate an increase in real income by over 3 per cent, there will be a budget of Bt21,420 million available for additional investment to create jobs. Besides, this action will also help reduce the total of regular expenditure down from 76.7 per cent, which has been set too high (as compared to 72.8 per cent last year) and somewhat increase the investment expenditure from a very low figure of 20 per cent.

The second proposal is for the government to persuade concerned authorities to divert certain budgets set for upcountry development to job-creating investments. There are two budget items that can be diverted for this purpose fully or partially. The first item is the budget for provincial development, which is under the authority of provincial governors and officials, totalling Bt18,000 million. The government, and especially the Minister of Interior, can easily persuade the governors and officials in every province to make use of this budget fully for useful investments to create jobs. The second budget item is the supporting budget for local administrative organisations (LAOs) all over the country, totalling Bt171,820 million. The government should seek cooperation from the LAOs, allowing them a role in improving the economic situation of the country by using the allocated budget for useful investments to stimulate the economy and create jobs as much as possible. I believe people running the LAOs would be proud to play a part of the role towards this end. This is not an easy job but worth an effort.

Until next Monday.