January 10, 2014 00:00
By Erich Parpart
Worried private sector estimates losses of more than Bt40 billion; business groups ready to help form panel
Twenty-five business organisations yesterday convened and came up with a rough idea on the national reform committee's structure.
In a closed-doors meeting yesterday, a core group of seven private organisations met with 18 other private groups, they also targeted seven sectors for reform, adding education to the six agreed upon on December 23.
It was also concluded that the committee would not seek formal powers to launch reform but rather be a forum for different sectors in society to discuss the process.
This new attempt by the private sector came amid forecasts that the planned “Bangkok shutdown” starting on Monday would bring business losses upward of Bt40 billion.
“We thought our meeting on December 23 would be the last, but the caretaker government asked us to set up another. Discussion [yesterday] centred on the design of the reform committee. The core group of seven organisations believes there should be more middlemen, so we have invited another 18 representatives from various sectors such as academia and the social sphere to join us,” said Vichai Assarasakorn, vice chairman of the Thai Chamber of Commerce.
Vichai said the reform committee would comprise 30 to 50 people from all sectors, selected according to their expertise in the issue targeted for reform.
He said details of the reform committee would be ironed out at another meeting to be held soon.
Vichai revealed that that if all committee members agreed on a topic for reform, they would push the caretaker government to announce an executive decree, to be acted upon after the election by the new government. Any conflict concerning reform should be solved by a national referendum. All reform processes would first be discussed with the Election Commission before being made public, he added.
Payungsak Chartsutipol, chairman of the Federation of Thai Industries, said there was no division between the seven private-sector organisations group, as all agreed on the necessity for reforms, though they had not discussed a timeframe for the process.
“We still agree on reforms and we still see the same picture, there is no disunity within the group. We have not discussed or argued over whether the reform should take place before or after the election,” said Payungsak.
Both Thai and foreign research houses have cut their forecast of Thailand’s GDP this year from 4-5 per cent to 3-4 per cent as result of the country’s politic turmoil.
The University of the Thai Chamber of Commerce (UTCC) has forecast a loss of Bt40 billion, or 0.2 percentage points out of the gross domestic product (GDP), if the so-called “Bangkok shutdown” campaign lasts for two weeks.
“The Thai economy might grow by only 3-4 per cent this year, lower than the previous forecast of 4-5 per cent,” said Thanavath Phonvichai, director to the UTCC’s Economic and Business Forecasting Centre.
The UTCC poll also found that Thai consumer confidence has plummeted to its lowest level in two years, mainly because of the political tension. Meanwhile, consumers’ expectations of purchasing new cars, houses, holidays and investments have dropped to a seven-and-a-half-year low.
UBS has cut its forecast for Thailand’s 2014 real GDP growth to 3.6 per cent from 4.5 per cent, citing weak growth momentum, prolonged anti-government protests, and a likely lack of investment in major infrastructure. The broker also predicted the baht would fall to Bt34 per US dollar this year.
Su Sian Lim, economist at HSBC cited research that showed the Thai economy significantly underperformed in 2013 compared with its neighbours in 2013.
Unfortunately, a recovery in sentiment may be elusive and sub-par growth in domestic demand is likely for the last quarter of 2013 and possibly beyond.
“Political outcomes will be key,” said in the HSBC’s report.