A sound bit of advice

A sound bit of advice

A message has been conveyed by a former finance minister to an aspiring one — don’t be too agreeable with the government when it comes to money matters.

Such was the warning from Korn Chatikavanij, who was the finance minister under Abhisit Vejjajiva from December 2008 to August 2011.

Mr Korn was making references in a recent Facebook post to a statement by Sirikanya Tansakun, a list MP and deputy leader of the People’s Party (PP), who said the main opposition party was shortlisting members to debate the national expenditure bill for the next fiscal year in October.

She also shared that she would stand behind the Finance Ministry if it were to issue a decree to widen the country’s borrowing capacity to offset far-reaching impacts expected by the US tariffs.

Ms Sirikanya, the favourite to become the finance minister if the PP leads a government, also warned the Paetongtarn Shinawatra administration not to splurge or be reckless in spending a future loan.

Ms Sirikanya’s words, however, were anything but reassuring for Mr Korn.

“Was Khun Sirikanya being rather premature in finding the loan initiative acceptable?” he said.

Mr Korn said he wished the government moral support in weathering the economic storm sweeping the country and the world. He insisted that now was not the time to be partisan as he was watching to see if government policies yielded any results.

However, his attention has been grabbed by the government mulling over sponsoring a loan bill, which it wants to make effective in time for the next fiscal year’s expenditure.

Mr Korn said he failed to grasp the rationale behind a push to burden the country with a loan at a time when the current fiscal year budget is barely halfway through its cycle and the next fiscal year budget expenditure bill is in its formative stage.

One bold fact which the government might find hard to swallow is that it had over-projected economic growth, which necessitated the current fiscal year budget to have a heavy deficit.

To offset the budgetary shortfall, the government has resorted to borrowing, nearly maxing out its public debt threshold.

The borrowing has hit the ceiling, which has put the country’s finances in a tight spot.

To compound the precarious situation, the ruling Pheu Thai Party’s flagship campaign policy — the digital handout scheme — implemented in phases in cash rather than digital money, has been ridiculed for being disbursed through a misguided concept. The policy is also being revised as it goes along, according to critics.

The initial plan to borrow 500 billion baht was also condemned for potentially violating the State Financial and Fiscal Discipline Act, as the country was not in a crisis as required by the law.

The rationale for the scheme, according to Finance Minister Pichai Chunhavajira, was that Thailand’s economy has been in a prolonged state of stagnation for more than 15 years.

Over the past decade, average GDP growth was only 1.9%, while household debt soared to more than 90% of GDP. A lack of competitiveness led to a decline in the production sector, which caused a dip in export volume.

The administration viewed it as necessary to inject money into the economy while simultaneously tackling structural economic issues to enhance the country’s competitiveness.

The digital wallet scheme requires citizens to register using the government’s Tang Rat app. The programme was initially supposed to help all Thais aged 16 and older, with an estimated budget of 500–600 billion baht.

However, following criticism about the appropriateness of distributing 10,000 baht to everyone, eligibility criteria based on income were introduced. Eligible individuals must have an annual income of no more than 840,000 baht and bank savings of no more than 500,000 baht. This adjustment reduced the number of eligible recipients to 50 million people, with the government estimating that about 90%, or 45 million, would register.

As a consequence, the programme’s budget was cut to 450 billion baht. Recipients were required to spend their handouts in the district where their registered residences were for the first round.

The digital wallet policy has so far undergone two phases. The first involved distributing 10,000 baht to 14.5 million people who hold state welfare cards and disability cards.

The second phase, which was distributed to about 4 million elderly individuals aged 60 and above, got underway in January.

For the third phase, the Finance Ministry will distribute money through a digital payment platform system. To qualify for this phase, recipients must be Thai citizens aged 16 or above.

Meanwhile, Mr Korn said the Trump tariff issue may serve as a front to hide the underlying reason for the government’s large appetite for additional funds. The country’s treasury needs replenishing, with tax revenue falling short of targets.

However, the priority was not to borrow to balance national coffers. Rather, it should look to cut back on non-essential expenses, which are burdening the current fiscal year budget.

“This trimming of expenses, as I recall, was a recommendation Khun Sirikanya made during scrutiny of the current fiscal year budget in parliament last year.”

Mr Korn said if the government remained adamant in passing the loan bill, the legislative process from start to finish would span at least three to four months. By this time, the budget expenditure bill would be close to being enacted.

“In that case, why bother having a separate law when the borrowing could be incorporated into the budget expenditure bill?” he said.

A possible explanation for a specific bill is that it could override the Public Debt Act and provide the government with an avenue to borrow beyond the legally permitted maximum.

“We must think it through extremely carefully. Don’t give in and be agreeable too easily,” the former finance minister said, referring to Ms Sirikanya.

Taking a turn for the worse

For the first time, former prime minister Thaksin Shinawatra’s controversial hospital “imprisonment” faces intense scrutiny now the courts have stepped in, according to observers.

The Supreme Court’s Criminal Division for Holders of Political Positions has launched an inquiry into whether Thaksin’s transfer from Bangkok Remand Prison to the Police General Hospital (PGH) two years ago was justified or part of a scheme for him to avoid actual jail time.

The inquiry comes despite the dismissal of a petition filed by former Democrat MP Charnchai Issarasenarak, who argued that Thaksin’s transfer from prison to a VIP ward at the hospital violated protocol and was therefore unlawful.

While the court rejected the petition because Mr Charnchai was not a direct party to the case, it found the claim serious enough to warrant an investigation.

“When it appears to the court that a final ruling may not have been properly enforced, it has the authority to hold an inquiry and issue an order,” the court said in a statement.

It has ordered all parties, including the National Anti-Corruption Commission (NACC), the Attorney-General’s Office, the Department of Corrections, the PGH, and Thaksin himself, to submit documents and evidence within 30 days.

The court has scheduled a hearing for June 13, with many legal experts anticipating a relatively swift process as they believe there is no need for witness examination.

Thanaporn Sriyakul, director of the Political and Public Policy Analysis Institute, pointed out that the court had rejected Mr Charnchai’s petition twice before finally deciding to act.

This suggests the court now believes there may have been procedural violations in Thaksin’s detention and witnesses may be summoned if the documents are found to be insufficient for deliberating the case, said Mr Thanaporn.

“Thaksin must not let his guard down. He can’t afford a misstep. This is the closest call he’s had [to serving jail time in an actual prison],” he said.

Stithorn Thananithichot, director of the Office of Innovation for Democracy at King Prajadhipok’s Institute, told the Bangkok Post that scepticism persists because Thaksin has shown no sign of frailty despite serious health issues. If his illnesses are a pretense, someone may have to take the fall to keep him out of jail. Unless Thaksin foresaw this and prepared documentation, he might not get out of this legal predicament, he said.

According to a press briefing by Pheu Thai Party spokesman Danuporn Punnakan early last year in response to growing questions as to how seriously ill Thaksin was, Thaksin was found to be suffering from cervical spondylosis, a degenerative disease that affected the neck, which explained why the ex-premier was seen wearing a neck collar.

The former premier also had shoulder tendon degeneration for which he underwent surgery while at the PGH, and Thaksin still needed physical rehabilitation for a full year following that operation, according to the spokesman.

Mr Stithorn said if treatment records had been non-existent or no medication had been prescribed to Thaksin, any documents produced pertaining to a “treatment” may be assumed to have been fabricated, he said. However, the analyst questioned whether anyone would make up documents and lie in court, as doing so would result in severe penalties.

“Giving false testimony carries harsh punishment, and this raises the possibility of Thaksin fleeing the country again,” the analyst said.

Still, some political analysts believe Thaksin may get out of trouble due to political circumstances. If he manages to strike a deal with those in power, a behind-the-scenes actor could emerge to help him out of this.

“Taking Thaksin from the political scene does not bode well for conservatives. Pheu Thai will fall apart and the votes will go to the People’s Party (PP), not conservative parties,” said Mr Stithorn.

Thaksin returned to Thailand on Aug 22, 2023, after 15 years in self-imposed exile. He had been sentenced to a total of eight years in prison in three corruption cases.

In the first case, Thaksin was sentenced in absentia to three years in prison for conflict of interest. The court said Thaksin, while serving as PM, had ordered the state-run Export-Import Bank to lend 4 billion baht at a below-cost interest rate to Myanmar so it could buy products from Shin Satellite Plc, a company owned by his family.

In the second case, Thaksin was convicted of illegally launching a two- and three-digit lottery between 2003 and 2006. This amounted to abuse of power as the scheme was not supported by any legislation, the court said.

In the third case, the court sentenced Thaksin, who made his fortune in the telecoms industry, to five years for malfeasance in connection with the handling of telephone concessions and conflicts of interest from 2001 to 2006 during his two terms as prime minister.

Within hours of his arrival at the Bangkok Remand Prison, he was hospitalised due to unspecified health issues. He later received royal clemency that reduced his sentence from eight years to one.

Thaksin did not spend a single night in a standard prison cell, remaining in a special suite on the 14th floor of the PGH until he received parole. He has gradually resumed a political role and is believed to be leading neo-conservatives to counter the rising popularity of the progressive “orange camp”, a reference to the PP.