New Deputy Prime Minister with oversight of the economy has also signalled a rethink on the sort of industry Thailand is seeking for the Eastern Economic Corridor project suggesting that planners may be moving away from the focus on ‘S-type’ industries and reevaluating what demand there is out there.
Thailand’s Deputy Prime Minister overseeing the Ministry of Energy and Finance, Supattanapong Punmeechaow, has signalled that it could be the end of next year before a Covid 19 vaccine is available in the kingdom. In the meantime, the government, through its newly established Centre for Economic Administration, is aiming to work with the private sector first to boost domestic consumption and limit the impact of the economic contraction on the most vulnerable Thai workers. Mr Supattanapong says the new economic unit at the highest level, just announced, is aiming to create one million jobs including 400,000 positions for new graduates and over 420,000 for those laid off due to the recession.
Thailand’s new Deputy Prime Minister in the economic sphere Supattanapong Punmeechaow said on Monday that the government would aim to limit the level of economic contraction for this year to under 7.5% as predicted by the National Economic and Social Development Council.
His comments indicate increased pragmatism amongst the new economic team in dealing with the fallout from the Covid 19 disaster which has hit Thailand’s exports hard and scuppered the foreign tourism sector which accounts for 70% of GDP.
New Centre for Economic Situation Administration
Mr Supattanapong highlighted the new Centre for Economic Situation Administration which has identified fostering cooperation between the public and private sectors, at this critical time, as fundamental to addressing the Thai economy’s needs.
The 61-year-old former PTT executive has worked for a long time, before his appointment on August 6th, as an advisor to Thai Prime Minister Prayut Chan ocha on inward investment.
Working in partnership with the private sector, goal is to create one million new jobs this year
Speaking on Monday to the Bangkok Post newspaper, he emphasised a key new government policy which would be based on ‘co-payment’ where the government would subsidise some of the private sector’s expenses to assist the economy while also inviting more private firms into partnership arrangements with government agencies.
Mr Supattanapong said the new Centre for Economic Administration would be aiming this year to create one million jobs to replace those lost in the export sector as factories have closed and within the tourism industry.
Millions in the black economy return home
The government may not be able to fully quantify the number of casual jobs lost because of the closure of the foreign tourism sector as many were self-employed or belong to Thailand’s grey or black economy.
Many have been left homeless or have drifted home to be with families on the land, small villages or within other areas of the casual sector.
The ability of Thailand’s agricultural sector and black economy to absorb this huge number has been extended on this occasion to the limit.
Hence the highly visible number of homeless people in former tourist hotspots such as Pattaya with no recourse to government assistance.
Breakthrough for foreign tourism in Phuket
Thailand announced a new initiative on Friday to reopen long-stay tourism under strict entry and quarantine arrangements in Phuket.
The plan, one of many proposed by Tourism and Sports Minister, Phiphat Ratchakitprakarn, is believed to have gotten the green light this time due to the new economic administration centre and the support of the new deputy PM.
No vaccine until the latter half of next year
Deputy PM Supattanapong also indicated that a vaccine for the Covid 19 virus should be available in Thailand towards the end of next year as the government works towards developing its own facilities in the kingdom for producing and distributing it.
Minister of Public Health, Anutin Charnvirakul recently proposed a ฿600 million package linked with a partnership between Thailand and the UK’s Oxford University. The university is at the fore of the UK’s own vaccine programme.
In the meantime, Thailand is hoping that it can boost domestic consumption and investment through increased government spending and borrowing while the contraction in exports is showing signs of petering out with only a very slight recovery expected later this year.
Exports dropped by 11.37% for July with losses among all key trading partners says key official
On Monday, the Ministry of Commerce revealed that exports for July were off by 11.37% following the most dismal export figures in over twenty years in June when they fell by nearly 24%.
The figures and commentary were presented to the media by the Director-General of the Trade Policy and Strategy Office, Pimchanok Vonkorpon.
Ms Pimchanok pointed to depressed markets worldwide as normal consumer spending has been reined in by Covid 19 restrictions which have seen all developed economies contract sharply.
The key official, however, said that there was some indication that the worst the Covid 19 pandemic can do had passed but it would take time for exports to recover.
Exports in July were $18.8 billion and the seven month total showed a contraction of 7.72%.
‘The value of exports to most major trading partners contracted at a slower rate than the previous month,’ an optimistic statement from the Ministry of Commerce indicated.
Ministry of Commerce targeting a 7 to 8% drop for 2020 as exporters fear it could be as high as 15%
For the year, the ministry is not expecting any significant improvement but suggests that exports will have contracted by between 7 to 8%.
This would be a significant improvement on the 15% contraction predicted by Ghanyapad Tantipipatpong at the beginning of the month who is the Chairwoman of the Thai Shippers Council.
Note of pragmatism on Eastern Economic Corridor investment, a survey to be launched
On Monday, Deputy PM Supattanapong also sounded a more pragmatic note about inward investment to Thailand’s flagship Eastern Economic Corridor project in Chonburi, Rayong and Chachoengsao.
The development zone has been an integral part of the government’s economic policy since the early days of the junta administration.
Mr Supattanapong, on Monday, indicated that the government may have to look beyond what has been termed as ‘S-curve’ industries meaning those at the high technological end that require research and development and are slow to take off initially.
He said that the government would be looking at conducting surveys to reappraise the potential for development among investors interested in the area which has been the subject of massive capital expenditure and is earmarked for further investment.
This exercise would be aimed at determining the requirements of potential investors in the project.
New jobs created from ฿400 billion fund
Among the one million jobs to be created by the new economic unit aided by a ฿400 billion fund earmarked by the government, will be 400,000 new jobs for graduates and a further 420,000 for those who have lost jobs in factories in recent months.
The government will also be out there helping to assist private firms to maintain employment until the kingdom’s twin engines of growth, namely exports and foreign tourism, are primed again to carry the economy forward.
This is not expected before the end of 2020 and will probably be sometime in 2021.
In the meantime, this government sees its role as easing the impact of the Covid 19 recession and maintaining, as best as possible, the structure of the economy until it passes.