Infrastructure plan must bring benefits for all
As the govt unveils development projects, the public now has the chance to question whether they will be a valid use of taxpayers' moneyThe government’s long-awaited infrastructure investment scheme requires thorough planning and public scrutiny if it is really to enhance the country’s competitiveness and the quality of life for citizens as a whole.
The project’s shaping has taken a long course. Prime Minister Yingluck Shinawatra first unveiled the plan at the Foreign Correspondents’ Club of Thailand exactly a year ago. It drew significant attention, given that Thailand had not undertaken any big infrastructure project since Suvarhabhumi Airport.
In the past few decades, welfare policies, partially populist ones, have taken a toll on national expenditure, squeezing the amount available for investment to below 20 per cent of annual budgets. Back when Thailand began re-shaping from an agriculture-based economy to a developing industrialised nation, the amount available for long-term investment was over 30 per cent, and mostly went on infrastructure. It was then that the industrial areas of the Eastern Seaboard took shape and paved the way for the burgeoning growth of the manufacturing sector, which today contributes as much as half of gross domestic product.
The latest plan - which covers investments in rail, road and air transport, with supporting information technology - is designed to make Thailand the centre of Southeast Asia. The scheme extends to its involvement in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, the Greater mekong Subregion, the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy and the Indonesia-Malaysia-Thailand Growth Triangle.
The concept has drawn much interest from global investors and economists, but some are voicing concerns - not about Thailand’s ability to finance the projects but about possible postponements in light of the ongoing political conflict.
As to financing, Thailand is indeed capable of completing the project, which will require Bt2 trillion in borrowing over seven years without jeopardising the country’s public-debt status. The government has also promised that, despite the level of borrowing, the public debt-to-GDP ratio will not exceed 50 per cent, countering earlier fears that it could exceed 60 per cent.
Political conflicts and the deep divisions in society are assuredly more worrisome. Many projects are involved over those seven years, and the abandonment of some would leave the jigsaw incomplete, reducing the potential long-term benefit of every investment.
The political conflict could also have led to some non-viable ideas being inserted into the scheme that are simply meant to please voters in particular parts of the country. Some economists speculate that this factor has contributed to delays.
It has been months since Prime Minister Yingluck unveiled the plan. The rough plan was first presented to foreign investors during a "roadshow" in London last November. Weeks later, the government had discussions on "Country Strategies", whereby the infrastructure investment would be implemented to benefit both the agricultural and manufacturing sectors. It is fortunate that such complementary plans could be done on the sidelines. Otherwise the Bt2-trillion scheme could take many more months, or even years, to reach completion.
Under the theme "Thailand 2020: Connecting to the World", models of the projects to be carried out under the infrastructure investment project are being exhibited at the Government Centre on Chaeng Wattana Road. But, although the public can view the displays, there is still no guarantee that the plan will actually be implemented, especially since the government has yet to forward the loan legislation to Parliament for approval.
This weekend citizens have a chance to view the models and voice their opinions. All opinions will be reviewed and might be used in adjusting the plan. Then the Cabinet will review the draft plan before submitting it to Parliament.
It’s been a year since the plan was unveiled. But if benefits might accrue, further delay is warranted.