August 11, 2023
BANGKOK – Pheu Thai deputy secretary-general Dr Paophum Rojanasakul disagrees with the central bank governor on the impact of the delay in the formation of a new government and the implementation of Pheu Thai’s digital money handout poll, saying that the digital money handout is not populism but a way of stimulating the economy.
Paophum said on Thursday that he disagreed with several key points made by Bank of Thailand Governor Dr Sethaput Suthiwartnarueput, which were aired during a seminar on Wednesday.
On the impact of the delay in a new government taking office, the BOT governor said the central bank was not concerned about the delay and that it would not severely affect the overall economic situation.
Paophum strongly disagreed, pointing out that without a new government taking office, the country would lack hundreds of billions of baht of investment money for the first half of the 2024 budget year. He said the country would become like a vehicle stuck in neutral gear and thus unable to move ahead.
“Worse still, there will be damage because investors will delay investments. There will be more damage because there will be a loss of confidence among investors as well as damage from losses in the stock market and damage caused by the country’s lacking direction. These will be the inevitable losses caused by the political vacuum,” Paophum said.
Almost three months have passed since the May 14 election but a new coalition government has yet to be formed. The election-winner Move Forward was effectively blocked from forming a government by junta-appointed senators and the Pheu Thai is now mobilizing support from MPs and senators to try to set up its coalition.
During the seminar, the central bank governor also mentioned the pre-poll promise by Pheu Thai to hand out 10,000 baht in digital wallet form to all Thais who are at least 16 years old. The BOT governor said the digital money policy would be a kind of populism that would have a negative impact.
But Paophum said the digital money handout should not be regarded as a populism because it would serve to revive the economy very fast.
“It will create an economic cyclone that will sweep through all communities around the country,” Paophum said.
He said the digital money policy would be a necessary measure now that the country was in bad shape and could not depend on normal purchasing power.
He expressed confidence that the Blockchain technology of the digital money would ensure that the money would reach the target groups and create faster circulation than remitting conventional money to recipients.
Moreover, the digital wallets would create a basic infrastructure for the financial system to prepare the country for financial reforms.
Paophum also disagreed with the central bank governor’s statement that financial institutions should focus on stability, saying banks should not be trapped by “stability” but instead become mechanisms for driving economic power to the grassroots level and SMEs. He added that banks should not shun risky groups from the economic system.