Guarantees and perils of handbook
The modern pocket scheme’s veil of uncertainty has been suddenly lifted, despite its high anticipation and controversy.
A project of this size, however, may be expected to continue at a staggering half a trillion ringgit without some vicious criticism and a warning of legal repercussions for the entire cabinet.
Critics have been hounding the authorities with warnings of a severe legal reaction, exclusively targeting the ruling Pheu Thai Party, the architect of what many slammed as coffers- draining nationalist galore the country is ill purchase.
The state has struggled to find the funds for the great handout plan for months, which it claims will unleash an economic “tsunami” necessary to bring the country back to life.
The venture accomplishes its magic by encouraging public spending and generating growth beyond the imagination of critics.
Pheu Thai is fighting off streams of charges that it is not defense to splurging at the region’s price. The coup-toppled Pheu Thai-led Yingluck Shinawatra administration is struggling to recover from the legal repercussions and moral contempt it faces as a result of the failure of the rice-pledging program, which has caused hundreds of billions of baht in losses.
Farmers were supposed to have the option to vow and then give the government an unrestricted supply of their corn for a higher price than they would receive by selling it at market rates. The ultimate goal of the plan was to climb rice prices to defend farmers from selfish middlemen.
However, the rice-pledging program tragically came to an end in August 2017 when the Supreme Court’s Criminal Division for Holders of Political Positions found 15 people guilty of engaging in fake government-to-government ( G2G ) rice deals.
In the midst of the horde of fear and condemnation, coincidenceally or no, the very same lender that had instituted the rice pledging plan is now being roped in once more to help finance the implementation of the digital wallet scheme.
If the government does n’t change its mind, the state- owned Bank for Agriculture and Agricultural Cooperatives ( BAAC ) may find itself a borrower of a 172.3- billion- baht product to largely finance the modern wallet handout plan.
The remaining portion of the bag resources will be divided into two tranches: 175 billion ringgit from the budget redistribution for the current fiscal year and 152.7 billion baht from the budget for the 2025 fiscal year.
The Bank of Thailand’s message of caution regarding the legality of the scheme’s funding has been shared with the parliament and on social media platforms.
One caution was voiced via Facebook by someone who had macro- managed the country’s fiscal and financial affairs from the end of 2008 through to the latter half of 2011.
Korn Chatikavanij, a former finance minister, recently wrote on Facebook that he thought the government might be treading risky waters by allowing the BAAC to serve as a wallet scheme lender.
He introduced an opening that recapped the accusations made against the Pheu Thai and the Democratic Party in the wake of the wallet tussle. While the Democrats took a swipe at the ruling party for planning a repeat of the enslaving debt monstrosity similar to that created by the rice- pledging programme, Pheu Thai returned the salvo and asked if the enormous loan obtained from the BAAC to finance the rice price guarantee implemented by the Democrats- led government in the past has been paid off in totality.
Mr. Korn explained that the swipes were understandable because both the projects involving rice-pledging and rice-pricing had goals that complied with BAAC law.
He insisted that both policies met the fundamental requirements of the BAAC law, which forbids the bank from lending to farmers in order to support their agricultural careers financially.
” Nowhere in the law, however, is there a clause or stipulation that allows the BAAC to lend to the government so that it can spend the money as handouts ( even though wallet recipients include farmers )”, he said.
The digital wallet policy has been specifically stated as a means of increasing domestic consumption and encouraging economic growth. Which, according to Mr. Korn, is utterly unrelated to the promotion of farming.
The former finance minister added that the introduction in 2018 of the Fiscal Discipline Act has provided an iron- clad protection against a misspending of state enterprise fund by the government. Spending that falls short of the underlying goal of the respective state enterprise is considered a crime.
According to him,” I’ve read the BAAC law once more and come to the conclusion that the ( planned digital wallet loan ) needs a thorough vetting, which is in line with the Bank of Thailand’s caution.”
Mr Korn advises the government to drop the planned BAAC loan and focus instead on saving enough budget within the next fiscal year to finance the scheme. The government might want to break the handouts into two phases so that the latter phase is implemented in the fiscal year 2026 if the fund still falls short.
Backlash affects the new cabinet.
Political analysts have criticised the new cabinet line- up, believing that some of them are not a good fit for their roles or are complete misfits.
Four ministers, two of whom are Pheu Thai heavyweights, were forced to step down as a result of the reshuffle, which took place about seven months after the Srettha government seized power and had a significant impact on the ruling Pheu Thai Party.
Following Puangpet Chunlaiad’s departure, Pheu Thai stalwart Somsak Thepsutin has taken the place of Dr. Cholnan Srikaew as minister of public health, and Jiraporn Sindhuprai has been appointed as PM’s Office Minister.
It saw the switching of roles between Sermsak Pongpanich and Sudawan Wangsuphakijkosol, both from the Pheu Thai Party. Ms. Sudawan replaces Mr. Sermsak as culture minister and Mr. Sermsak as tourism and sports minister.
Political pundits claim that these changes lack justification or clear justification, particularly in light of Mr. Somsak’s replacement and Mr. Sermsak’s appointment as head of one of the nation’s biggest foreign exchange earners, which the government has also cited as the country’s main economic engine.
While the rejig introduced fresh faces, with former energy executive Pichai Chunhavajira and Paopoom Rojanasakul warmly welcomed into the fold as finance minister and deputy finance minister, respectively, the inclusion of Pichit Chuenban as the PM’s Office Minister, sparked controversy.
According to Section 160 of the constitution, which specifies the moral and ethical standards of a cabinet minister, Mr. Pichit, an adviser to the prime minister and former lawyer of Thaksin Shinawatra, is deemed unfit to be appointed to the cabinet.
He was given a six-month prison sentence for contempt of court in 2008 for giving a senior administrative official from the Supreme Court’s Criminal Division a box containing about$ 2 million in cash.
This was not to mention that Parnpree Bahiddha- Nukara has quit, with immediate effect, in protest after he lost the deputy premier post, which he held concurrently with the foreign affairs minister portfolio, in the reshuffle.
Stithorn Thananithichot, an analyst from King Prajadhipok’s Institute, disagrees with the assessment despite the fact that several political pundits believe Thaksin Shinawatra, the alleged de facto leader of the Pheu Thai Party, is to blame for the cabinet reshuffle.
Srettha: Evidence of growing clout
He considers the reshuffle a sign of Prime Minister Srettha Thavisin’s growing clout, pointing out that the new finance minister and his deputy, Mr Paopoom, who is known as the architect behind the flagship 10, 000- baht digital wallet policy, are both close to Mr Srettha.
He claimed that Chakkraphong Saengmanee, the prime minister’s office minister, belongs to one of the country’s inner circles, having been promoted from the position of deputy minister of foreign affairs to minister of national economic and social development.
These three ministers are expected to assist Mr. Srettha in formulating and directing economic policies, as well as delivering tangible outcomes. However, giving Mr Somsak and Transport Minister Suriya Jungrungreangkit a concurrent post of deputy prime minister is viewed as a power- sharing gesture rather than serving the public interest.
The reshuffle, in the opinion of the analyst, reflects the increasing influence of the prime minister among Pheu Thai Party factions as a strategic bargaining chip.
When he first occupied the highest position in the cabinet, it was believed that the prime minister had no support among the ruling party. But as the’ formal’ head of the government, he has the bona fide negotiating power”, he said.
According to Mr. Stithorn, Mr. Srettha may lead the largest faction in the ruling party, which represents Yingluck Shinawatra, the fugitive ex-prime minister Yingluck Shinawatra.
In 2011, Yingluck, Thaksin’s younger sister, gained popularity and was elected prime minister. She fled overseas in 2017, shortly before a court sentenced her to five years in jail for negligence in the government rice subsidy scheme.
Mr. Stithorn attributed Mr. Srettha’s political success to the fact that the conservative party only approved of his candidacy as the only candidate from the Pheu Thai Party.
Paetongtarn Shinawatra and Chaikasem Nitisiri, two other prime ministerial candidates running for president of Pheu Thai, do not have a chance to win the election, according to the analyst, who has gained experience in negotiations with Thaksin and his ex-wife Khunying Potjaman na Pombejra, who are known to have a history of dominance in the ruling party.
However, although Mr Srettha has gained significant power in the ruling party, it does not follow that he will be able to harness it and implement policies and achieve goals quickly, Mr Stithorn said.
He claimed that because he has n’t shown anything in his seven months as prime minister, it will take a long time for him to demonstrate his worth.