Sunday, December 28, 2008

Thailand's stimulus package hope

 Abhisit’s $12.5-billion hope 

PM plans stimulus package as he prepares for more protests 

Weekend • December 27, 2008

BANGKOK — As he braced himself for his first major test on Sunday, new Prime Minister Abhisit Vejjajiva announced on Friday that he would soon unveil a 300-billion-baht ($12.5-billion) spending package to help Thailand recover from months of political turmoil and ride out the global economic downturn. 

The package — which must be passed by Parliament, where Mr Abhisit’s government holds a slim majority — will focus partly on rural areas, ousted Prime Minister Thaksin Shinawatra’s traditional base of support. 

“It is expected that the money could be injected (into the economy) from March or April,” Mr Abhisit, 44, told reporters. 

The Thai economy is expected to grow by only 1 per cent next year due to a drop in domestic consumption and damage to the export sector from the worsening global economy. 

On top of that, the all-important tourism sector is expected to suffer next year from the global slowdown and lingering effects from the shutdown of Bangkok’s two main airports last month by anti-government protesters. 

Mr Abhisit said about a third of the spending would be directed towards agriculture and efforts to tackle unemployment. 

Another third would be used to deal with “crop rice problem”, where tumbling commodity prices have started to hurt farmers. 

The remaining 100 billion baht would be used for other projects, such as “incentives in terms of tax exemption”, he added. 

Mr Sompob Manarungsan, an economics professor at Chulalongkorn University, said he felt the stimulus plan could help counter the slowdown in exports and inflow of foreign investment. But much will depend on how it is carried out, he added. 

Mr Abhisit said tackling the country’s current economic problems would be tougher than dealing with the 1997 Asian financial crisis because this time round “you have both the economic and the political dimensions”. 

But the Oxford-educated economist downplayed the likelihood of social problems from the economic troubles, saying that “we’ve had experience in dealing with that”. 

Mr Abhisit — who became Thailand’s third Premier in four months on Dec 15 — said his government is confident of handling the protests planned by pro-Thaksin supporters that were due to start on Sunday. 

At the same time, he also urged Mr Thaksin — now living in exile to avoid a jail term on corruption charges — not to incite unrest in the kingdom. 

The United Front of Democracy against Dictatorship, whose members distinguish themselves by wearing red shirts, planned to rally in the big Sanam Luang central parade ground on Sunday. 

The group — which argues that Mr Abhisit’s five-party coalition is illegal because it came into power by a combination of military machinations, judicial manoeuvring and illegal protests — has also threatened to descend on Parliament to prevent the Premier from unveiling his government’s policies. 

“I hope that we will be able to deliver a policy statement according to our plans on Monday and Tuesday,” said Mr Abhisit. “I am confident that we will handle the situation on those two days in ways that will not damage the country’s image,” he added. 

The police plans to deploy nearly 3,000 officers, equipped with only riot shields, outside Parliament. 

Mr Abhisit said he had ordered that there should be “no repeat” of the violence at a similar protest on Oct 7 by the yellow-clad, anti-Thaksin People’s Alliance for Democracy (PAD), which left two dead and 500 wounded. 

On his plan for national reconciliation, Mr Abhisit said the “key principle” is justice, with a number of “outstanding cases against various groups during the conflict of the last year”. 

He did not give details but specified that the PAD movement “must accept the legal consequences of their actions”. 

Mr Abhisit also said a pardon for Mr Thaksin is possible in future but that the tycoon must return home to face justice first. “Nothing is ruled out but you have to accept your punishment and your responsibilities first,” he said. AGENCIES

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