Thailand’s Debt Crisis and Growth Strategy: Thaksin Shinawatra’s Vision
(Bloomberg) — Former Thai Prime Minister Thaksin Shinawatra has urged immediate action to address Thailand’s substantial household and public debt levels while advocating for policies to elevate the country’s growth rate to compete with other Southeast Asian nations. Speaking at a “Vision for Thailand” event, Thaksin emphasized the need for a comprehensive debt restructuring initiative, noting that Thailand is ensnared in a debt crisis affecting households and businesses.
Addressing a gathering of over 1,400 financial and political leaders in Bangkok, Thaksin, the influential figure behind the ruling Pheu Thai Party, called for coordinated efforts between the finance ministry, central bank, and other stakeholders to tackle the debt burden. This event marked Thaksin’s first anniversary back in Thailand after evading corruption charges since 2008.
Although Thaksin himself is unlikely to take an official role in the new government led by his daughter, Paetongtarn Shinawatra, his influence is expected to shape key policies. Known for his “Thaksinomics” approach, which included farmer debt moratoriums and universal healthcare, Thaksin’s tenure saw economic growth rates topping 5%.
Paetongtarn now faces the challenging task of revitalizing an economy hampered by soaring household debt, sluggish exports, and high living costs. With household debt nearing 91% of GDP, the central bank remains hesitant to cut interest rates from the decade-high 2.5%. Thaksin suggested exploring the reduction of bailout fees paid by commercial banks as a relief measure for those struggling with loans. He also emphasized the importance of respecting the central bank’s autonomy while advocating for greater fiscal-monetary policy coordination.
The new administration plans to refine a digital wallet initiative, potentially providing 10,000 baht ($289) each to approximately 14.5 million vulnerable citizens by September. Thaksin stressed the need for empathy and economic support for the less privileged under the capitalist system.
Thaksin also defended Pheu Thai’s coalition with establishment parties and called for constitutional amendments to restore democratic norms and prevent judicial overreach, stressing the importance of stable governance.
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Original Story https://www.livemint.com/news/thaksin-pitches-strategy-to-rescue-thailand-from-debt-trap-11724365357473.html
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