Thailand’s Srettha pledges urgent action to tackle ‘sick economy’

New prime minister promises to hand out cash, reduce energy prices and boost tourism to stimulate sluggish economy.

Thailand's Prime Minister Srettha Thavisin reacts before he reads the policy statement at Parliament in Bangkok, Thailand, Monday, Sept. 11, 2023.
Srettha Thavisin appears before the Thai National Assembly for the first time as prime minister to lay out how his government will seek to improve the country and its economy during its four-year term [Sakchai Lalit/ AP]

Thailand’s new Prime Minister Srettha Thavisin has pledged quick action to relieve the country’s post-pandemic economic problems, including handing out cash to stimulate spending and tackling rising energy costs.

Srettha laid out the pledges in his inaugural speech to Parliament on Monday after four months of political uncertainty while lawmakers were unable to agree on a government.

A member of the populist Pheu Thai Party, Srettha entered politics after a career as a real estate developer. His government is facing high expectations and pressing demands to address a range of economic, political and social problems in its four-year term.

The prime minister described Thailand’s economy – which has slumped after the COVID-19 pandemic all but crippled its lucrative tourism industry – as “a sick person”.

“Tourism and spending are recovering so slowly that there is the risk of economic recession. It is necessary to stimulate the economy and spending,” he said.

The stimulus measures include implementing a campaign promise to hand out 10,000 baht ($280) to all Thais 16 and older. “The money will be distributed to all areas and create jobs and economic activity, and the government will earn revenue,” he said.

Srettha has previously said the initiative, which critics say may not have a sustainable effect, would cost up to 560 billion baht ($15.8bn) and will be ready to deliver by the first quarter of next year.

In Monday’s speech, the prime minister also promised to act quickly to relieve debt problems, noting that public debt has risen to more than 60 percent of Thailand’s gross domestic product (GDP) in 2023 while household debt has spiked to over 90 percent of GDP this year.

The government also promises to mitigate rising energy costs and boost tourism, he added. It plans to waive visa fees for visitors from specific countries and improve airports to increase the number of flights landing in Thailand.

Long-term goals cited by Srettha include boosting international trade, supporting start-up businesses, investing more in transport infrastructure, improving agricultural production, empowering local governments and increasing access to land ownership.

The prime minister said the government would also seek to amend the current military-installed constitution through a process that allows for public participation.

He also addressed campaign pledges to reform the military, a powerful political player that has staged two coups since 2006, by promising “co-development” with the army to end mandatory conscription, reduce an excessive number of generals and ensure transparency in procurement procedures by the Ministry of Defence.

The diplomatic tone came after Pheu Thai, which came in second in Thailand’s May 14 general election, allied with several pro-military parties in a successful bid to win backing from the conservative Senate, the upper house of the National Assembly, to form a government.

The move marked a reversal of a campaign promise and has disappointed many Thais, who voted overwhelmingly for change after nearly a decade of military rule. Thais handed the progressive, youth-led Move Forward Party 151 seats in the 500-member House of Representatives and Pheu Thai 141 seats.

Pheu Thai initially worked with Move Forward to form a government, but the bid failed after Thai senators opposed the coalition because of the progressive party’s calls for minor reforms of the monarchy.

Pheu Thai’s new alliance, however, has raised scepticism over its ability to fulfill its campaign promises while having to accommodate its coalition allies, who come from all across the political spectrum.

Polling conducted by the National Institute of Development Administration in September showed that most Thais do not believe Pheu Thai will be able to implement its promises to end mandatory military conscription or draft a “people’s constitution”.

Source: Al Jazeera and news agencies