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Pracha Wiwat welfare scheme under scrutiny

The nine New Year gifts unveiled by the prime minister this morning will not help boost the economy or make the Democrat Party win fresh general election, Pitch Pongsawat, a lecturer at Chulalongkorn University, said on Sunday.

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Thailand's finance minister

The nine New Year gifts unveiled by the prime minister this morning will not help boost the economy or make the Democrat Party win fresh general election, Pitch Pongsawat, a lecturer at Chulalongkorn University, said on Sunday.

The nine New Year gifts unveiled by the prime minister this morning will not help boost the economy or make the Democrat Party win fresh general election, Pitch Pongsawat, a lecturer at Chulalongkorn University, said on Sunday.

Earlier this morning, Prime Minister Abhisit Vejjajiva unveiled nine measures or ‘New Year gifts’ to be implemented to help the low-income and underprivileged people under the ‘People’s Agenda for 2011’ scheme.

Mr Abhisit said the government would spend about two billion baht for financing measures which in turn would generate “economic added value” worth more than 26 billion baht for more than 10 million Thais.

Mr Pitch said the policy to maintain price of cooking gas and free use of electricity can help reduce expenses of low-income earners, but they can not increase income in their pockets.

The lecturer also believed that the Pracha Wiwat welfare scheme will not help the ruling party to win more MP seats in the next general election as coalition partners also help push this policy, even if the Democrat claimed to be its achievement.

Spokesman of the opposition Puea Thai Party Prompong Nopparit said on Sunday that the nine measures were nothing new. They were just a continual of populist policy initiated by former prime minister Thaksin Shinawatra.

Pracha Wiwat is not a populist plan, says Thailand’s Finance Minister

I do not believe this is a fair description of the policies derived from the Pracha Wiwat process.

It is new and is designed to created a ”total government” policy-making process that overcomes the age-old problems of departmental and ministerial compartmental approach. Most public issues require the involvement of a number of government agencies. Traditionally, these agencies will work independently from each other, sometimes at cross-purposes and often using different sets of data and assumptions.

In order to find effective and rapid solutions to problems, the prime minister conceived of the Pracha Wiwat process where, upon his command, all relevant agencies were brought under one roof, literally, to work until a credible proposal was found.

Thailand's finance minister KORN CHATIKAVANIJ

The Pracha Wiwat process started with the government listening to the needs of the people, prioritising their needs and posing them as problems requiring solutions - says Thailand's finance minister KORN CHATIKAVANIJ

The government then ”invited” around 80 officials and academics from 30 agencies to work full time on these problems.

They were provided with full facilities at the Government Centre, Chaeng Watthana and were encouraged to talk directly with the target groups. The prime minister empowered them to think out of the box and to address these problems in a practical and sustainable manner.

So far, nothing ”populist” in this.

The civil servants, academics and other interested parties, suddenly given this freedom and power, found a level of creativity that surprised themselves and certainly surprised us.

Their proposals will be taken up by the government and announced by the prime minister on Jan 9. Many of these proposals simply involve a different, more efficient way of doing things. Some will involve changes to ministerial decrees and some even amendments to the law.

Participation in the provision of credit to allow access to formal financing to those previously precluded will be done on terms determined by the state-owned banks, without government support.

Direct budgetary support will be required, but this is not by any stretch the key element of policies derived from the Pracha Wiwat process.

Indeed, this is consistent with this government’s attempts to reach out to help those in need in a responsible way. When we launched the loan-shark debt relief programme, many debtors were disappointed that it was not a simple policy of debt-forgiveness. We were giving debtors a fair deal by refinancing their exorbitant loans, but we were certainly not willing to give them a free deal.

Furthermore, we are now embarking on a programme to provide basic financial literacy through our nationwide ”debt doctor” schemes. Education is the key to genuinely and sustainably reducing the debt problem. This is being managed by institutions that know how, the state-owned banks.

I am proud of the fact that both the Government Savings Bank and the Bank for Agriculture and Co-operatives have re cently won accolades as Banks of the Year in Thailand. I do not think this would be possible if they were mere policy slaves of the government.

I hope this goes some way in explaining the rationale behind the approach of Prime Minister Abhisit’s government. I might add that sometimes, wine in a bottle may look familiar, but closer scrutiny will usually help you separate plonk from vintage.

KORN CHATIKAVANIJ
Finance Minister

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