Boonwara says state agencies should rethink how they can provide better services for the public without increasing their annual budget.
Boonwara says state agencies should rethink how they can provide better services for the public without increasing their annual budget.

Bonds urged to fund social projects

Economy September 12, 2017 01:00

By WICHIT CHAITRONG
THE NATION

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THE FINANCE Ministry has been urged to issue government bonds to finance social projects that support disadvantaged groups while helping small and medium-sized enterprises (SMEs) and improving the quality of education and public health services.



Researchers at the Thailand Development Research Institute (TDRI) yesterday suggested the Finance Ministry’s Public Debt Management Office (PDMO) and Budget Bureau consider mobilising funds for social projects and hire non-government organisations (NGOs) to work on the specialised issues.

“The PDMO may be able to issue government bonds designed to raise funds from investors who are interested in improving social issues, and are willing to receive a low bond yield,” said Boonwara Sumano, who led the team on a study of so-called social impact partnerships (SIP).

The SIP project could save government funds and at the same time prove more effective for the delivery of some public services than is the case with state agencies now.

Hundreds of representatives of state agencies, private firms and NGOs yesterday attended a seminar hosted by the TDRI and the National Economic and Social Development Board, a state-backed think tank. 

While many participants were drawn to the idea of an SIP project, some wondered how it could get off the ground amid all the red tape and bureaucracy in the government.

Boonwara said the PDMO may need to revise or reinterpret the public debt law before it could proceed with this type of bond issuance. 

The Budget Bureau may also need to amend the Budget Procedures Act in order to allow the government to set aside funds in the annual budget to pay dividends or investment returns to private investors.

The TDRI study team believes there may be many private investors or individuals who want to invest in social projects, given the corporate support shown for worthy causes. 

In 2014, donations from companies and individuals amounted to about Bt75 billion, and spending on corporate social responsibility programmes comes in at about Bt10 billion a year.

The Finance Ministry may also allow for tax deductions on corporate investments in social projects, Boonwara said.

State agencies have to rethink how they can provide better services for the public without increasing their annual budget or hiring more state officials. NGOs or specialised foundations may be able to deliver better services, so state agencies could hire them to do these jobs, Boonwara said. 

She said an independent agency should make an assessment on the outcome of such projects.

Given the current social conditions, Thai Health Promotion Foundation has the potential to kick off public health services, she noted. 

Thailand could initiate social impact partnership projects in four areas: improving the quality of education, health care services or disease prevention, the productivity of SMEs, and the standard of job training or job hiring. 

According to the TDRI, there are 89 SIP projects in 19 countries, with US$322 billion in capital raised.

Finance Minister Apisak Tantivorawong had earlier suggested that private companies be asked to help support the financing of state welfare aimed at low-income groups. This would take some of the strain off the annual budget.

 

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