Opposition leader describes three loan decrees as a blank cheque

  • Thailand’s opposition leader, Sompong Amornvivat, today criticized the Government’s three public borrowing decrees, likening them to a blank cheque to spend without a proper screening mechanism.

Taking the floor after Prime Minister Prayut Chan-o-cha, the Pheu Thai party leader said he welcomed Thailand’s success in containing the spread of COVID-19, but said that the blunders and mismanagement by the Government in the handling of the situation, which ranged from the shortage of face masks and PPE to the confusion over the handling of Thais returning from abroad and the refusal to lift the state of emergency, despite the improving situation.

Mr. Sompong said the decrees will empower the administration to borrow and spend the money at will, with insufficient checks and balances, epitomized by a loan disbursement screening committee made up of just a handful of people.

The one trillion baht proposed public sector borrowing will be divided into 45 billion for activities and work to contain coronavirus, 555 billion to help citizens in the form of cash subsidies and 400 billion for economic rehabilitation.

Mr. Sompong said he is most concerned with the money for economic rehabilitation, noting that the fund has already been distributed to various ministries, even before the decree is debated in Parliament.

As for the soft loans for SMEs by commercial banks, the opposition leader said there will be a tendency for the lending banks to provide loans to their trusted SMEs, while those in trouble and in need of funding will be left at the back of the queue.

He also said that there is no need for the Bank of Thailand to step in stabilize the bond market, because that is the role of commercial banks.

Pheu Thai party secretary-general Anudit Nakorntap, meanwhile, said that the Government has over extended “without first checking the amount of money already in its pockets.”

He said that the defence procurement budget could be delayed and the money used to cushion the impacts of the virus on the economy, businesses and the people.

He said that the Thai economy has been slowing steadily since General Prayut became Prime Minister in 2014, with public debt piling up to the tune of 2.6 trillion baht, excluding this year’s 2.5 trillion baht additional borrowing.

Based on the requirement to service 48 billion baht in debt each year, Anudit said it would take Thailand about 90 years to repay all the borrowed money.

“The Prime Minister will write a new chapter in Thai history, by being the first leader to drag every Thai citizen into debts of several hundred thousand baht for every man, woman and child,” said the Pheu Thai secretary-general.

Thai Public Broadcasting Service (Thai PBS)