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Dear
friends,
It is
now
known
that
government
income
collection
for May
2006 is
3,349
million
baht
below
target,
thus
signaling
the
danger
of
economic
slowdown
for the
second
half of
2006,
with
failure
to reach
targeted
income
collection
a real
risk.
In
addition,
on the
political
horizon,
looming
scenes
of
continued
strong
conflict
hint to
the
possibility
of no
election
at all
on
October
15,
2006,
which
would
result
in
delayed
Budget
consideration
for
2007,
and
continued
economic
slowdown
until
the
beginning
of 2007
as
investment
funds
cannot
be
withdrawn
from
2007’s
budget
in the
last
quarter
of 2006.
As it
plays a
caretaker
role,
this
government
is
limited
in its
implementation
of
financial
policies.
If it
were a
government
that
people
trust,
it would,
moreover,
have
other
measures
to use
besides
the
injection
of
budget
into the
economic
system.
However,
since it
does not
have the
people’s
trust,
the
government
is
limited
in its
use of
other
equipment
to
stimulate
the
economy.
A
government
may
conceptually
play
with the
people’s
expectations.
If trust
is
placed
in a
government’s
policy
announcements,
people
will
modify
their
behaviour
accordingly
and the
government
will
achieve
its
economic
target
before
even
embarking
on
policy
implementation.
For
example,
when the
government
announced
its
investment
plans
for mass
transportation
infrastructure,
many
people
believed
that the
government
really
would
conduct
that
project
and
investors
and
others
found
ways to
invest
in it.
Thus,
the
economy
grew
even
though
the
government
did not
conduct
such a
project.
Or, when
the Bank
of
Thailand
announced
it would
control
the
inflation
rate,
entrepreneurs
and
others
could
anticipate
the Bank
of
Thailand’s
use of
high
interest
policy
during
periods
of high
inflation.
Consequently,
the
public
prepared
in
advance
by
decreasing
expenses
and
investment,
which
lowered
Thailand’s
inflation
pressure,
though
the Bank
of
Thailand
had done
nothing
about it
up to
that
point.
However,
this
government’s
past
behaviour
has been
self-discrediting,
as has
the
behaviour
of other
government
organizations
looking
after
economic
policies.
Most
obviously,
the
government
announced
many
policies,
but did
not
carry
them
out, for
example,
its
Nakornnayok
new city
project,
the
regional
center
energy
trading
project
and the
construction
project
for
skytrain
route
changes,
none of
which
have
been
carried
out,
though
announced
as
large-scale
projects.
Therefore,
investors
and
others
who were
preparing
to
invest
in these
projects
have
suffered
loss.
A
further
point is
the
government’s
lack of
transparency,
with its
doubtful
behaviour
making
it
unworthy
of
trust,
and
leading
the
public
to
suspect
complex
layers
of
corruption
and
benefits
behind
the
running
of these
huge
projects.
Thus,
people
fail to
believe
in
government
honesty
when it
comes to
investment
projects,
and
instead
worry
that
such
projects
will be
unsuccessful
due to
public
opposition.
The
government
also
signals
messages
that
conflict
with
those of
the Bank
of
Thailand,
especially
where
the
Finance
Ministry
expresses
disagreement
over the
Bank of
Thailand’s
policy
of
increasing
rate.
Society
therefore
believes
that the
government’s
financial
policies
conflict
with
those of
the Bank
of
Thailand,
possibly
resulting
in
inefficient
financial
policy
management
and the
Bank of
Thailand
being
unable
to
control
or mange
the
inflation
rate
according
to
plan.
The
government’s
policy-setting
behaviour
has
always
been
very
erratic,
along
with its
lack of
transparency
and lack
of unity
amongst
other
government
organizations.
Thus,
people
tend to
distrust
the
policy
announcements
of this
government.
For
example,
though
the
government
announced
the
construction
of three
skytrain
routes,
many do
not
believe
that it
can or
will do
so. Thus,
investors
and
others
dare not
move in
the
direction
of
government
policy
as
announced,
and
there is
no
economic
stimulation
due to
the
people’s
lack of
confidence.
All that
remains
is to
wait and
see.
It has
been
suggested
that the
government
clarify
its
project
policies,
as to
when,
how and
what
policies
it will
pursue,
also
giving
the
completion
date for
each
project.
The
government
should,
moreover,
reveal
its
financial
status
to
assure
the
public
of
sufficient
budget
to run
these
projects
and
assure
the
government’s
sure
completion
of them.
As far
as Mega
Projects
go, the
government
should
study
carefully,
let the
people
participate
sufficiently,
and then
use
academic
standards
to
measure
operational
priorities
before
carrying
these
out
transparently
through
clear
project
bidding
procedures,
all the
while
revealing
the
contract
details.
The
Prime
Minister
and
other
politicians
should
also be
barred
from
presiding
on the
committee
boards
of those
considering
any
submitted
bids.
Despite
limits
placed
upon the
Caretaker
Government’s
financial
policy
options,
if the
government
did
display
trustworthy
behaviour
by
sending
proper
economic
signals
and
setting
clear,
stable
policy
in place,
it would
not find
it
difficult
to drive
the
economy,
as it
now
does.
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