Thailand: Government Spokesperson Clarifies Flood Reconstruction Act
A government spokesperson stated that the government had already acknowledged in principle of the Royal Act regarding reconstruction after flood – debt of Financial Institution Development Fund. She also elaborated that those two Royal Acts are parts of financial preparation for an investment on water management system and country’s future building.
Mrs. Titima Chaiseang, Office of the Prime Minister spokesperson mentioned the acknowledgement in principle of the Royal Act regarding reconstruction after flood – debt of Financial Institution Development Fund under the authority of Bank of Thailand by the cabinet, as follows:
“Due to the abnormal situation in Thailand in 2011, the flood crisis was considered the most serious flooding situation causing great damages on economy and society as well as transportation system and tourism. The government needs to invest on reconstruction, recovering, and managing infrastructure in a long run. Therefore, the project requires a lot of budget to recover, improve, address problems, and build confidence of the country. The project can be fulfilled through the Strategic Committee for Reconstruction and Future Development’s proposal which aims to enact the Royal Act on reorganizing loan debt management which the Ministry of Finance made as a financial support to Financial Institution Development Fund B.E….. , and enact the Royal Act to empower the Ministry of Finance to invest on water management system and the country’s future building B.E….”
Office of the Prime Minister spokesperson also explained the reason and urgent necessity to enact the Royal Act on reorganizing loan debt management, as follows: “As a result of financial crisis which made 56 financial institutions collapse, the total of debt of Financial Institution Development Fund up until now is thus 1.14 billion Baht. This sum of debt does not belong to people; however, from the former Prime Minister Chuan’s authority in 1998 to Abhisit’s authority in 2011, those governments must bring national budget which had been collected from tax to pay financial institutions 65,000 million Baht annually. All the money paid for interest debt equals 600,000 billion Baht. For the capital which Bank of Thailand is responsible for, it declines 300,000 million Baht in 13 years. It is obvious that the debt of Financial Institution Development Fund makes people take responsible for indefinitely if there is no change in financial management. Calculating from the Bank of Thailand’s debt statistics, it is forecasted that the Bank of Thailand has a capacity to take responsible for capital debt for 50 years from now, and the Ministry of Finance can be responsible for interest debt for 50 years from now as well.
Unless the government does not have to take responsible for interest debt 65,000 million Baht per year, it can take this sum of money to invest on country reconstruction and development in various fields such as water management, canals dredging, dykes and Monkey Cheeks building, modern infrastructure construction, or new areas for industrial zones extension etc. We can also have a 300,000-Baht budget for projects that take 5 years. Therefore, this government would like to be recognized as the first change agent by adapting plans. The government also needs help form Bank of Thailand to take responsible for interest debt in order to relief a financial burden of people.”
Office of the Prime Minister spokesperson also reiterated that “the government calls for an opportunity to spend people’s tax on country development rather than on paying for indefinitely debt. To address the problem of debt of Financial Institution Development Fundis to significantly contribute itself to flexibility of this government and the coming governments. Consequently, the government needs to enact this Royal Act on reorganizing loan debt management. Anyone who opposes this Royal Act is considered preventing an opportunity of people blocking the country from heading to the brighter future.”
For sustainable water management and confidence building on production sectors as well as competitive capacity enhancement, the government needs to enact the Royal Act to empower the Ministry of Finance to invest on water management system and the country’s future building within 3.5 trillion Baht. There are urgent development projects aiming to reduce flood risk and permanently protect the would-be flood damage such as; first, recovering and preserving soil project (plantation, and dam building) around Ping, Wang, Yom, Nan, Sakaekrang, Tha Chine, and Pasak rivers; second, dyke building and water drainage system in communities, and industrial zones project; and third, floodway and flood diversion channel project aiming to respond to the inundation from rivers.”
Therefore, those two Royal Acts constitute a financial preparation to respond to an investment on water management system and the country’s future building. It aims to urgently build the confidence of entrepreneurs and respond to an investment ordered by the government’s strategy. This implementation can be completed without leaving an impact on fiscal discipline.
Dredging Today Staff, January 12, 2012;