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Front runner for Thai finance minister set to tackle debt; country among highest household debt to GDP ratios in Asia

Tan KW
Publish date: Sun, 04 Jun 2023, 07:14 AM
Tan KW
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BANGKOK, June 3 : Thailand’s election-winning Move Forward party is committed to increasing welfare spending and the minimum wage while promoting growth by opening up the economy to competition and cutting corruption, its finance minister-designate said.

South-East Asia’s second-largest economy grew 2.6 per cent last year as it made an uneven recovery from the Covid-19 pandemic.

Thailand has lagged behind some regional peers like Vietnam and Indonesia for years, with its prospects at times undermined by political turmoil.

The progressive Move Forward is pushing to lead a coalition after winning the most seats in a May 14 general election when voters made clear their hope of ending 10 years of rule by the military and military-backed governments.

But the party, which has particularly strong support among young urban voters, has unsettled some businesses with its plan to increase the minimum wages by 27 per cent to 37 per cent.

Sirikanya Tansakul, 42, the head of Move Forward’s economic team and the party’s choice for finance minister, said the priority would be helping households saddled with debt.

“The No. 1 challenge is household debt,” Sirikanya told Reuters in an interview.

Thailand has one of the highest household debt to gross domestic product ratios in Asia with one in every three of its 66 million people trapped in debt.

The French-educated Sirikanya said a Move Forward government would help households with utility bills and provide incentives to small businesses.

“Household income should grow 5 per cent per year,” she said. “There is going to be a spill-over effect from a stronger grassroots economy.”

Sirikanya’s path to the top finance job is not guaranteed.

Her party’s military-linked rivals have a built-in constitutional advantage that could yet see them heading a government.

She said she is confident Move Forward would be able to build a viable coalition.


A Move Forward government would raise the minimum wage immediately, the former public policy researcher said, though it would take into account the concerns of the private sector and work out support for business.

Some economists have welcomed the prospect of reform under a government led by a party that is committed to freeing up markets and promoting efficiency.

Professor Pavida Pananond from the Thammasat Business School said Move Forward’s policies would be “constructive” for a sluggish economy but they should be introduced gradually.

“It is natural that business sectors have concerns because many are afraid of change,” said Prof Pavida.

“Without the institutional restructuring that Move Forward is proposing... sustainable growth might not take place easily.”

To offset higher welfare spending, Move Forward would look to streamline taxation, introduce some new taxes and cut down on corruption, Ms Sirikanya said.

“We have to reorganise the budget... There is a lot of fat that we have to leave out.”

Move Forward will also push through with plans to open up sectors to competition, such as the US$14 billion (S$19 billion) alcohol industry that is controlled by a duopoly of two of the country’s wealthiest families.

“We are pro-market,” Ms Sirikanya said, “If you look at each and every single piece of our policy platform that we trying to de-monopolise, it means that we want competition to be more fair and we want to be more efficient.”

 - Reuters

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