Thaksin to lead Thailand Inc
THAKSIN Shinawatra vowed yesterday to personally take charge of the reform and privatisation of state enterprises if he becomes prime minister, to enable them to be publicly listed on the stock exchange and add Bt3 trillion in value to the market.
Speaking at a back-to-back policy duel with the Democrat Party at the Stock Exchange of Thailand, the Thai Rak Thai chief portrayed himself as a decisive leader ready to run the country as a company, with himself as chief executive officer.
Thaksin said the privatisation of state enterprises would build up assets to offset liabilities on the country's deteriorating balance sheet. This would help tackle the rising public debt, which stands at Bt2.6 trillion, or 56 per cent of Gross Domestic Product (GDP), he said.
"I am going to take charge of the state enterprises myself by getting rid of corruption and bringing in professionals to manage them," he said.
The combined profits of state enterprises stand at Bt89 billion. Thaksin said it would not be difficult to boost total profits to Bt120 billion.
"And it is not difficult to manage them to raise their price-to-earnings ratio to 25 times, or to equal to Bt3 trillion in market capitalisation," he said. "This amount is equal to the country's public liabilities."
Thaksin said the goal was to boost the stock market's capitalisation to 100 per cent of GDP, or about Bt5 trillion, from the present level of about Bt1.2 trillion.
In his address, which lasted about an hour, Thaksin spoke at length about a new philosophy of public policy management, systematically starting out with the rural sector, moving to the business and financial sectors, and then the public sector. He said he would ignore the short-term problem of a liquidity trap, and focus instead on tackling the country's long-term structural problems.
"If implemented, the Thai Rak Thai's policy will fundamentally change the way Thai economic policy has been managed over the past two or three decades," said Viroj Nualkhair, a capital market expert. "But we don't know how this can be implemented."
In terms of broad economic policy, Thai Rak Thai would shift the country away from the export-led growth of the past decade to growth driven by domestic demand. Thaksin said the aim was to reduce the country's heavy dependence on imports and overseas demand for Thai exports, which carry a tiny value-added margin.
Thaksin and the Thai Rak Thai are reaching out to the rural sector with a populist policy, pledging to award Bt1 million in working capital to each of the 77,000 villages nationwide to develop or process a product locally. Farmers who owe money to the Bank for Agriculture and Agricultural Cooperatives also would receive a three-year suspension of interest payments.
The one-village-one-product policy would be based on local knowledge and implemented with applied new technology, including information technology (IT). There would be a chain of production linking the villages to small and medium-sized enterprises and to exports.
Thaksin pledged to link all of the country's tambons through the Internet, which would help provide up-to-date data and information on domestic production and improve marketing efficiency.
"This is the social investment that we need to make. Unlike the Miyazawa money, which disappears after it is spent, this social investment will stay," Thaksin said.
At the heart of the Thai Rak Thai's policy for the real business sector are small and medium-sized enterprises (SMEs), which would become the backbone of the economy. These firms would get financial, tax and technical support from the government to develop their ideas into marketable products.
Thaksin said the SMEs would rely on domestic resources and skills and very little, if at all, on imported content.
Addressing the financial sector, Thaksin made it clear he would like the government to buy the banking sector's bad debts at one shot through a national asset-management company. Bad debts would then be categorised so they could be managed or sold off more conveniently.
Sunrise and sunset industries would be identified and managed appropriately.
Somkid Jatusripitak, a key member of the Thai Rak Thai, emphasised the need to move ahead economically by considering the core competence of the country, from farm production, to industry, exports and IT. SMEs would take the lead role in replacing big companies as the backbone of the economy.
He said micro-lending would also feature prominently, with the Bank for Agriculture and Agricultural Cooperatives acting as a development bank, a "People's Bank" lending money to small-time borrowers, an "SME Bank" lending money to the small and medium-sized businesses, and commercial banks continuing normal banking practices.
Regarding the public sector, Thaksin vowed to reform the bureaucracy, and shift its policy from a government tool of control to the role of facilitator or guardian of the rules of the game.
BY THANONG KHANTHONG