Somkid calls for Thai version of "New Deal"

"Thailand needs this New Deal or else it will likely have a scary future," he said.

The situation now was perilous due to the more than three years of political instability and current global economic crisis, he told a seminar held by the Stock Exchange of Thailand and Nida Business School over the weekend.

His New Deal proposal is based on the grand scheme concocted by then US president Franklin D Roosevelt, who called for all Americans' commitment in reviving the economy and society during the Great Depression of the 1930s.

"As for Thailand, we should be able to survive the economic crisis over the next two years if the US economy recovers late this year and starts to grow again around 2011.

"That's our economic outlook, but the political outlook is worrisome since there could be more upheavals," said the man credited with lifting the economy out of the ashes of the financial crisis of 1997 as the country's economic tsar from 2001-2006.

More importantly, today's global economic crisis has three major implications, he said.

First, it is creating a new geopolitical landscape, marked by the rise of China as a counterweight to the US. Thailand should deepen its relations with China for mutual benefit.

Second, the crisis, with huge impacts on the US and other Western economies, has led to the rise of "state capitalism", under which governments play a much bigger role in the economy as they intervene to save major financial institutions to prevent the collapse of the economic system.

"Now, 13 global oil giants are state-owned, while sovereign wealth funds have become unprecedently influential in the world economy. Banks are recapitalised and nationalised by US and other Western governments, while political bureaucrats are more powerful in China and other countries," he said.

Third, a new economic model is emerging as a result of the global crisis, as Thailand and other export-dependent countries can no longer depend on foreign investment, tourism and exports as engines of growth.

A new model is necessary where local markets play a bigger role in driving economic growth, "but it seems that domestic purchasing power as in the case of Thailand might not be sufficient for that purpose", he said.

"So we need big reforms, starting from the agriculture sector. Japanese farmers, who are rich, are an example for Thai farmers, but we need to do a lot to turn the farm sector into our new engine of growth. We need integrated reform. Otop products are one example of the components for such a new economic model," he said.

The Abhisit government's Bt1.5 trillion economic stimulus package for 2009-2011 is huge and a clear-cut strategy needs to be formulated in implementing such a programme, he said.

Most of the projects mentioned were those drawn up four years ago. These are old and need to be reviewed completely, he said.

"In the end, I urge all young business and other leaders to volunteer for top political jobs to help chart a new course for this country. These jobs should be seen as national duties of competent persons.

"They may join any parties of their wish. I'm happy to stand behind them and serve as an adviser."

He also is vowing to stage his own political comeback.

"If it was not necessary, I wouldn't return to the political arena. I got enough. But if I could help make this country better, I would."