Govt put on the ropes as court delibertaes on decrees' legality

Korn Chatikavanij, the former finance minister and deputy leader of the opposition Democrat Party, is one of the 120-plus MPs who signed a petition for the Constitution Court to rule if the government's emergency decree on the transfer to the Bank of Thailand of Bt1.14-trillion in public debt is legal.

On his Facebook page, Korn opined that the decree is unconstitutional for several reasons.

First, the decree to transfer the huge debt, a legacy from the 1997 Asian financial crisis triggered by the baht devaluation, from the Finance Ministry to the central bank is against the Constitution because it is not an urgent issue.

Secondly, the emergency decree will hurt the country's economic and financial security.

On urgency, there are apparently other legal means to execute the debt transfer policy, such as proposing it as regular legislation for Parliament to consider and enact into law, so that the pros and cons can be debated by all members of the House of Representatives and Senate.

It is invalid for the government to argue that the debt transfer is urgent in connection with the country's need to invest in flood-prevention, mega-infrastructure projects following last year's massive inundation.

Earlier, Dr Virabongsa Ramangkura, chairman of the government's strategic committee on reconstruction and future development, told reporters that such a debt transfer would lower the country's public debt as a percentage of its GDP. However, this is wrong because the country's public debt is currently only 40 per cent of GDP - still far below the dangerous threshold of 60 per cent.

More importantly, the legacy debt is counted as part of the country's public debt, no matter if it's the Finance Ministry's responsibility or the central bank's.

In addition, the government said it needs to transfer the debt to the central bank so as to reduce the interest burden on the state budget. On an annual basis, the government has had to set aside Bt40-60 billion per year to service the legacy debt, thus it has less money for investment projects.

Deputy Premier Kittiratt Na Ranong also told the Cabinet that the government's debt service responsibility had risen to over 12 per cent of the total state budget - approaching the 15 per cent legal limit. But the figures were again wrong as Thirachai Phuvanart-Nalanuban, the ex-finance minister, disclosed that the official document in his hand one day before he lost his portfolio last month, shows that the government's debt service responsibility is currently only 9.33 per cent of the total state budget, not over 12 per cent as claimed.This shows that the government has misled the public in issuing the crucial debt transfer decree.

Former finance minister Korn also shared ex-finance minister Thirachai's opinion that the figures used by the government were wrong.

According to the Constitution, emergency decrees need to meet urgency and other criteria. Otherwise, they will have to be proposed as regular pieces of legislation for consideration by all government and opposition MPs.

Even Thirachai suggested that the government had doctored the figures to justify the decree's urgency.

Now, the debt transfer as well as the Bt350-billion bond issue emergency decree are being considered by the Constitution Court. If the court agrees to interpret their legality, Parliament will have to suspend its consideration of the two decrees and the government will have to take responsibility if any of the two, or both, turn out to be unconstitutional.