Govt Pressed to Open the Books on Economy

Rising debt raises crisis fears, Puea Thai says

The opposition Puea Thai party is demanding that the government reveal the country's real economic health, saying worsening debt could lead to a recurrence of the 1997 financial crisis.

Khanawat Wasinsangvorn, Puea Thai deputy leader, yesterday said Prime Minister Abhisit Vejjajiva should make public the economic fundamentals, as the country now has just 52 billion baht in reserves.

The Finance Ministry's plan to seek 270 billion baht in credit from domestic and overseas lenders had raised concerns that the government was about to drive the country deeper into debt, similar to what happened in 1997, Mr Khanawat said.

Puea Thai spokesman Phrompong Nopparit said the depletion in cash reserves showed the government was mismanaging the country.

Mr Phrompong said the government acted shamefully by making approval of funds for populist projects, with the aim of strengthening its voter base, its main priority.

He also opposed the government plan to raise fuel prices by five baht, saying the increase would play into the hands of oil smugglers, particularly those operating in the South.

Mr Phrompong questioned whether the Democrat party's 99-day urgent operations plan, which includes an end to motorists' contributions to the State Oil Fund, was possible during the term of this government.

The Democrats vowed last year while in opposition that if they headed the next government, they would come up with a 99-day quick-fix policy which included free education, boosts to the million-baht tambon fund, free electricity to the poor, and lower fuel prices.

Prime Minister Abhisit denies the country's cash reserves are suffering due to the government's decision to introduce a second economic stimulus package.

He said the foreign reserves were still healthy.

"The government expects no problems regarding the management of its reserves," Mr Abhisit said.

"The country's foreign reserves are plentiful."

The government was aware while drafting the stimulus package that its tax collection target would be difficult to achieve this year, he said.

The stimulus package was based on the assumption that revenue collection would fall 10% below target.

Mr Abhisit said the government had not decided whether to seek overseas loans.

Seeking loans does not mean the government lacks the money to implement its projects, he said.

Any loans would be used to launch new schemes.

The prime minister, speaking on his return from the World Economic Forum in Davos yesterday, said the economic programmes which the government was about to implement would prevent deflation.

In his weekly address to the nation on state-run NBT, Mr Abhisit said many foreign investors were interested in investing or expanding their investments in Thailand.

He met several world leaders and leading businessmen in Davos and discussed Thailand's role in global efforts to put the world economy back on its feet.

The economic stimulus measures were also discussed.

Mr Abhisit said many businessmen planning to attend this year's regional economic forum in South Korea may stop over in Thailand in June to study investment possibilities.

He will visit Japan next week where he will meet the Japanese prime minister and investors. He will also study Japan's economic stimulus measures to see whether they can be adopted here.