Stay the course, urges Tarrin

February 15, 2001

OUTGOING Finance Minister Tarrin Nimmanahaeminda has put a fat 251-page document on the Ministry of Finance's website, outlining his three-year effort to turn the economy around and making recommendations for the new government.

The document, which can be browsed at www.mof.go.th, sought to defend the reform work of the Chuan government, which rescued the country from the brink of total collapse and laid the groundwork for economic recovery.

The momentous reforms encompass fiscal and monetary policy, financial institutions, the real sector, and the social safety net.

The document also covers public debt, current economic conditions and future steps to ensure economic health.

Tarrin advocated a liberal economy linked to globalisation. He said it was necessary for the country to adjust itself to globalisation by reforming the economy to a position of strength.

"Thailand should try to benefit from and minimise the impact of globalisation by protecting the good parts of the country. It should also try to tackle poverty in preparation for the future," he wrote.

He recommended that the next government maintain macroeconomic stability and operate with transparency to allow the financial markets to correct any imbalances.

Tarrin urged the new government to maintain fiscal discipline, improve the efficiency of tax collection, accelerate the privatisation of state enterprises, reduce the creation of foreign debts and invest public money in productive projects.

When the Chuan government took office in November 1997, public debt stood at Bt1.9 trillion. By October last year, public debt had risen to Bt2.79 trillion, equivalent to 56 per cent of the gross domestic product.

The rapid rise came from the need to bail out the financial system and to stimulate the economy through deficit spending.

Tarrin also called for further efforts to strengthen the financial system to prevent the crisis from happening again. The new government would need to seek early passage of numerous bills on the unfinished reform agenda. These include amendments to the Bank of Thailand Act and Currency Act, amendments to the Commercial Banking, the Credit Bureau, the Credit Card Business Act, the Leasing Business Act, the Factoring Business Act and the Corruption Prevention Act, the Deposit Insurance Institution Act and the Pension Reform Act.

To improve the country's competitiveness, Tarrin said companies should not only try to reduce production costs, but should also improve corporate governance and work environments, provide worker training and attain international accounting best-practice standards.

Tarrin also emphasises public policy to promote equitable growth to tackle social problems, apart from further efforts to reform the bureaucracy and political system.

BY THANONG KHANTHONG