'Payment to rice farmers, restoring investor confidence top priorities'
May 24, 2014 00:00 By Sucheera Pinijparakarn,
The central bank and members of the private sector have urged the junta to help speed up payment of huge debts owed to farmers under the rice-pledging scheme and also to restore foreigners' confidence in the country after Thursday's power seizure.
They said these should be the top priorities of the National Peace and Order Maintaining Council before embarking on a road map for economic reform.
“The government must secure funding to pay farmers while explaining to the public the reasons for the military coup, so as to restore foreigners’ confidence and the image of Thailand,” said Bank of Thailand Governor Prasarn Trairatvorakul.
Prasarn, reportedly a candidate to become a post-coup prime minister, noted that providing a clear reason for the takeover would help protect the country’s credit being downgraded by rating agencies. A downgrade would lead to higher financial costs.
Standard & Poor’s on Thursday affirmed the country’s credit ratings while Fitch Ratings yesterday said the military takeover was not in itself a negative sovereign-ratings trigger.
Businesses have voiced concerns of a possible recession for the Thai economy after the contraction in the first quarter. Many research houses have lowered their forecasts for Thai economic growth for 2014 to a range of 1.5-2.5 per cent from the previous forecasts of between 3 and 4 per cent.
Bangkok Bank executive chairman Kosit Panpiemras agreed with Prasarn that the top priority for the junta was to help the farmers.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the new government should immediately launch strategies to boost the confidence of foreign traders and investors as first priority, as well as promote Thai shipments.
He called on the new government to have a clear road map for the rice sector by ensuring that politicians would not be able to intervene in rice trading and farming.
Meanwhile, Thai National Shippers Council chairman Nopporn Thepsithar said the private sector planned to propose to the new government to set up a national export strategy to promote Thailand as a trading nation.
The private sector would also like to encourage the new government to have a long-term development plan for integrating farming, manufacturing and the trading sector, as well as to enhance research and development in each industry. Tourism operators said a new government should be formed as soon as possible. The Tourism Council of Thailand has lowered the tourist arrival target from 29.92 million to 26.84 million.
Chatchai Tuangrattanapan, director of the Thai Retailers’ Association, said a fully authorised government must be formed as soon as possible with solid policies to solve the current conflicts as well as plans to promote the Thai economy in the short term.