He pointed out that since the third quarter of last year, a number of private companies had sent signals warning the government that the price of oil and other sources of energy would increase, which is happening right now.
Thailand is encountering steep price surges in consumer products.
The government should realise that a price increase of commodity raw materials such as oil or animal feed, coupled with rising transportation costs due to the pandemic, will affect the cost of living and impact livelihoods, Narongchai said in an interview with The Nation's LIVE morning news program "Voice of The Nation".
“The way to do it is we, as a market economy, should bolster market forces. We should also allow imports, based on market forces, of animal feed such as soybeans and maize. We must ease controls and manage the export of goods, taking into account domestic demand. Price increases will then be minimum and more manageable,” he explained.
There will be some price adjustments fluctuating according to oil prices. However, the economy will fare better if we do not control the price of essential goods and reinforce market forces, the ex-minister reiterated.
He pointed to two separate economic crises in the recent past.
The first crisis came when the Sanya government was advised to lift its policy controlling transparent bottled drinking water in 1973 when the government capped the price of such goods as a result of the oil shortage.
Narongchai said he was part of the economic advisory team at the time.
Narongchai believes that the government should utilise the existing oil fund to minimise the oil price increase and suitably manage the fund when costs are low by contributing to the fund to achieve balance in preparation for difficult times in the future.
He noted that Thailand’s policy in managing an oil price increase in the past has worked very well, much to the envy of fellow Asean members.
Narongchai feels that if there is a shortage of pork, we should allow more imports of the meat and not control the price. This is the benefit of utilising international market forces to help ease shortages and competition in pricing.
When asked to identify Thailand’s economic position in ASEAN, he spoke about the 1973 oil shortage. The government at that time allowed a slight price increase, he said, and again in 1979-1980 during the Chatchai government, “we managed the situation very well”.
“If we utilise the same principle, it should work well again,” Narongchai added.
Watch his interview clip with Voice of The https://www.facebook.com/TheNationThailand/videos/632500404483533
Watch the full episode of Voice of The Nation
Published : January 26, 2022