Former Thai DPM and chief economic architect Somkid: “The country is like a Monet painting – nice to look at from a distance but just a blur at closer inspection”; Thailand may become a country without a future if its leaders continue to overlook visionary and sustainable development

Somkid scathing on ‘lip service’ of populist govt

JEERAPONG PRASERTPOLKRUNG
THE NATION March 7, 2013 1:00 am

Thailand may become a country without a future if its leaders continue to overlook visionary and sustainable development, Somkid Jatusripitak, a former deputy prime minister, said on Tuesday.

“The country is like a Monet painting – nice to look at from a distance but just a blur at closer inspection,” he said, referring to French impressionist Claude Monet, who died in 1926.

Somkid was a guest speaker at an event to mark the 58th anniversary of the Thai Journalists Association. On the surface, the Thai economy is at the forefront of Asean countries, he said. But underneath the apparent success story lurk worrisome trends that could lead to decay.Despite the economic expansion of the past three to four decades, some 30 million to 40 million people remain in the agriculture sector, which is still backward, Somkid said. About half of the population is dependent on farming but they contribute just 10 per cent of gross domestic product.

The leaders pay lip service to boosting farming productivity but have failed to take action, he said. The stark reality is that farmers continue to become poorer while workers in manufacturing can only make low-margin products.

Manufacturing productivity has not helped improve the living standards of workers, he claimed, and has failed to absorb the migration of new workers from farms.

And the government has just decided to raise the minimum wage to Bt300 per day. But without a corresponding boost in productivity, the higher pay will only backfire to hurt workers in the long run, he argued.

All sides should keep in mind that Thailand has the highest income disparity in Asia and ranks 12th in the world. This proves that economic prosperity is restricted to the privileged few at the top and not spread to the vast majority of the people.

“Financial reform should have already started by now,” he said.

The key to reform is to decentralise authority to jump-start rural development, Somkid said. China used to have fewer developed rural areas than Thailand, but in less than three decades, its villagers can now enjoy unprecedented affluence.

“If Thais fail to reform the economy, then their future is bleak.”

Debt financing to boost consumption in order to spur the economy is not sustainable. Only increased productivity can ensure a bright future for the country, he noted.

STOPGAP MEASURES

Populist policies are stopgap measures for politicians to sway voter sentiment to cling to power. But populism would not bring about sustainability, he said. The decisive factor for successful economic development is the building of future foundations to propel the economy forward.

A failed economy will result if politicians just rely on populist schemes, he said.

For very long, elections have been a ritual to install politicians in power. Once votes were cast, citizens would become bystanders in the plundering of the country.

“The fallout from the political struggle to stay in power is cronyism – the dispensing of jobs to trusted allies instead of qualified professionals.”

The country’s strength is being sapped not because of a lack of capable people but because of a lack of opportunities for them to serve, Somkid argued.