Economic experts: Infrastructure development key in expanding economy

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BANGKOK, 21 August 2012  – On the occasion of the Commerce Ministry’s 92nd Anniversary, 3 special speakers were invited to deliver a speech about the current economic downturn and to predict the future economic situation. 

In their speech on “Global Trade Change: How can Thailand step forward?”, Supachai Panitchpakdi, head of the United Nations Conference on Trade and Development (Unctad), said the global economy will face a serious downturn next year and he expects the global economic growth next year to be lower than 2.5 per cent. The reason being that the the problems in the US economy and the financial problems in Europe would lower the possibility of global economic expansion.

He added that Thailand needs to prepare for a much more competitive market, therefore, he suggests the government to hold talks with its trading partners, particularly the Asean countries to minimize the effect of the non-tariff barriers impact and also to find a common ground in creating a stronger regional community.

Meanwhile, National Strategic Committee for Reconstruction and Future Development chairman Virabongsa Ramangkura, said that problems concerning the eurozone debt crisis and economic downturn are still on-going, the Thai government should focus on developing the infrastructure of the country such as looking into the connection of the deep sea ports. The connections are between the Laem Chabang and Map Ta Phut deep seaports on the Eastern Seaboard and the Dawei deep seaport in Burma. If this plan succeeds, it will definitely change the Thai economy, even though it might take a few years.

As for his comment on the rising inflation, Mr. Virabongsa said, the government should allow product prices to increase in line with the market mechanism. He added that the correct way to settle the high cost of living problem is to increase the people’s income; however, the central bank disagrees with this idea and focuses more on keeping the inflation level suitable for boosting the economy.

Moreover, Dhanin Chearavanont, chairman of the Charoen Pokphand Group agreed with Mr Virabongse about infrastructure development. Mr. Dhanin warned that next year’s economy will be worse than this year’s, the country now has a very high reserve level and should speedily spend the money for developing infrastructure in order to facilitate trade and investment growth for both the government and private sectors. The spending should be spent on areas such as port development, transportation, logistics, dual-track railways and irrigation, he added.

Mr. Dhanin also said that he personally believes that the rice pledging scheme is better than the income guarantee of the previous government, as it has helped to increase the farmers’ incomes. He added that, Thailand’s future rice rival is not Vietnam or Cambodia but will be Myanmar instead.