New government told to push ahead with fiscal legislation
The new government should rush to get fiscal legislation
on the statute book in order to boost confidence in Thai financial
institutions, according to a leading research center.
In a recent report, the Kasikorn Research Center (KRC)
spoke of the need to ensure that fiscal legislation which was undergoing
review during the last term of Parliament is brought into force as soon as
possible. Such legislation includes amendments to the 1997 Asset Management
Corporation Act, amendments to the 2002 Credit Fonciers Business Act and
draft laws on deposit insurance institutes, financial institutions and the
Bank of Thailand.
The research center noted that while this legislation may
not in itself be urgent, bringing it to the statute book quickly will have a
beneficial effect on overhauling national financial structures and will help
boost confidence in the nation’s financial institutions. Describing the
success of the legislation as a key indicator of the performance of the new
government, the report said that the passage of the laws will be watched
with interest by Thai and foreign investors alike.
The research center expects amendments to the Credit
Fonciers Act and the Asset Management Corporation Act to be relatively
speedy and uncomplicated, but admits that other legislation, particularly
the draft law on deposit insurance institutes, could be more detailed and
sensitive. Nonetheless, the center views this legislation as an important
step in the development of innovations in financial deposits, which will see
changes to the way in which business is conducted in the future.
The report also noted that the proposed establishment of
a super regulatory agency to oversee financial institutions will play an
important part in determining the success of draft legislation on financial
institutions and the Bank of Thailand. (TNA)
Local contractors should
be given priority
The government should review a method of engaging
contractors to implement state-owned investment projects to give many local
contractors opportunities to win bidding of each project, according to the
Thai Construction Industry Association.
Phumsan Rojanalertchanya, president of the association,
said local contracts are in the position to implement state-owned large
infrastructure projects. So, he did not want the government to engage
contractors based only on the economic perspective.
Instead, the government should give a priority to how to
create the value-added and opportunities for local contractors so they could
gain experience and win project contracts overseas. To this end, he said,
the government should review the method of engaging contractors to carry out
state-owned projects to ensure more local contractors get the jobs.
Phumsan said the association did not want the government
to pool the state-owned projects because only a few major contractors would
be entitled to implementing the projects. What the government should do is
to distribute each project so local contractors would have an opportunity to
carry out the project. He believed although the projects were distributed to
many contractors, the construction standard and accountability of each
contractor would not be different from the set criteria.
“I have met and discussed with Prime Minister Thaksin
Shinawatra three times and found the premier shared a common view with the
association. But in practice, the bidding for state-owned projects at
present has criteria that do not benefit local contractors,” he said.
index rises in January
Spending in the New Year Festival and the just-finished
general election helped push up the confidence index in all categories in
January although there was a sign of slowdown in consumption, according to
the University of Chamber of Commerce’s Economic and Business Forecasting
Saovanee Thairungroj, Dean of the Economics Faculty,
disclosed a survey conducted by the center showed the confidence index in
all categories edged up. For instance, the confidence index on overall
economy rose to 90.9 from 89.3 points in December, on job opportunities rose
to 87.8 from 86, and on future incomes to 105.1 from 103.1 It resulted in an
increase in the consumer confidence index to 105.1 from 103.1.
She attributed the increase in the confidence index to
the easing of consumer worry about effects from last month’s tsunamis in
six southern Andaman provinces, persistent southern violence, and bird flu
Spending on the New Year Festival and the general
election also helped boosted the confidence index. Higher fuel prices are
only a negative factor that undermines the confidence. However, she said,
the confidence index in many categories stayed below the 100-point level for
the 13th consecutive month.
For instance, the confidence index on future situation
edged down for the 6th consecutive month. Beside effects from the tsunami,
the government’s decision to float diesel oil prices in April could make
people slow consumption by 3-6 months.
Thanawat Palavichai, director of the center, said the
landslide victory of the Thai-Rak-Thai Party in the general election, which
could lead to the establishment of the single party government, would
contribute to the increase in the confidence index. He projected the
confidence index in February would stay close to that in January.
Since the confidence index is likely to stay unchanged or
drop slightly, private companies must accelerate adjusting their marketing
strategies to maintain the total sales and keep selling prices unchanged.
Government urged to hold
a referendum on privatization
A member of the panel that drafted Thailand’s
Constitution has urged the prime minister to hold a referendum on the
government’s planned privatization of state-owned enterprises. A well
known lawyer and a member in the panel that drafted the 1997 Constitution,
Kanin Boonsuwan said a referendum should be held to approve the premier’s
right to push on with listing more state enterprises on the stock market.
Thaksin has vowed to press on with the government’s
plans to privatize state-owned enterprises by listing them on the stock
market, citing the success of the partial privatization of the oil firm PTT.
“Thaksin seems to have the monopoly of making public
statement on this issue. If this is really good, then why not hold a
referendum in line with Article 214 of the Constitution?” Kanin said. The
process would allow 90 days for all stakeholders to present their points of
view to the voters.
Thaksin’s plans for these enterprises amounts to
carving up the national assets and selling them in installments, through a
vehicle called the State Enterprises Act, Kanin alleged. This Act enables
the government to virtually “dissolve” these enterprises over a fixed
period of time, he said. Kanin urged the PM to fulfill his promise to listen
to the views of all sides on the issue of privatization. (TNA)