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New Thai Government to face major challenges

The new government will be facing with three major challenges, including energy prices, minimum wage rise and trade competitiveness enhancement, according to Kasikorn Research Centre (KResearch).



Abhisit poster

After the House is dissolved, political parties are campaigning hard to prepare for the upcoming general election in Thailand. The new government will be facing with three major challenges, including energy prices, minimum wage rise and trade competitiveness enhancement, according to Kasikorn Research Centre (KResearch). 

As for the first issue, the skyrocketing energy prices and subsidy policy of the government, KResearch estimated that the government might spend over 110 billion baht in total to pin energy prices until September 2011.

Subsidy policy to be revisited

The state will have to reduce subsidy gradually to avoid long-term impact on the financial stability and urge the society to step up energy conservation.

Abhisit poster

Political parties are now gearing up for the election. The ruling Democrat party is of course one of them

As for the second issue, many political parties have been boasting that they will increase the minimum wage to relieve low-income earners from the rising living costs if they can form a new government.

Minimum wage increase

KResearch viewed that such an initiative should be done together with labour potential enhancement in order to maintain competitiveness of Thai trade and investment. In addition, it must be monitored that the rising minimum wage will not affect the skyrocketing inflation rate.

Improve Thailand’s competitiveness

The other challenge for the new government is to boost competitiveness of the nation. The new government should focus more on enhancing the national competitiveness in the long-term by investing in the national infrastructure and ready the country for the upcoming ASEAN Economic Community establishment in 2015, which will complicate the business environment and competition further.

KResearch expected that the Thai economy this year would grow about 3.0-4.0% with the base at 3.6%. However, impact from the shortage of auto parts and components following the twin disasters in Japan and the southern flood in Thailand will still be a major factor pressuring the Thai economy in the second quarter as it might shrink by 1.0% or only expand by 0.2% compared with the previous quarter.

The aforementioned challenges named by KResearch are only economic issues. A new government will certainly have a hard time ahead as there are still many other problems pending to be solved from deeply rooted political rifts to social affairs confusion.

Democrat Party policies for upcoming election

As the election is coming up, political parties are now gearing up for the election. The ruling Democrat party is of course one of them, let’s have a look at their policies and see whether they will be attractive enough to carry the party back into power.

The Democrat Party, or Phak Prachathipat in Thai, Thailand’s oldest political party has been the main coalition government party since December 15, 2008; its current leader is Abhisit Vejjajiva.

The Democrat Party’s campaign platform includes: income guarantee scheme for farmers, increasing the minimum wage by 25 percent; narcotic drugs crackdown; issuing community title deeds for 250,000 households; and granting education loans for a quarter million university students, among other things.

The Democrat Party said they will maintain seven social welfare programs, including free electricity for households with 90 units of usage or less, and subsidies on diesel and cooking gas. The party will also extend the 15-year free education program to the university level. Moreover, the Democrats also intend to achieve seven new projects, including the Chinese-Thai joint development of a high-speed rail route that will link China with Thailand and Malaysia.

Prime Minister Abhisit Vejjajiva, the Democrat Party leader, has expressed his belief that the competition between his party and the Pheu Thai Party will be intense in this election. In other words, the competition will likely be between two political giants, the Democrat and the Pheu Thai Parties, and the result of the election should be neck and neck, according to Mr Abhisit. He also added that the party’s policies were an important instrument to win the people over.

Sodchuen Limkriangkrai from National News Bureau of Thailand

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