Political shake-up . . .
Thailand’s political scene has been plunged into turmoil once again as Deputy Prime Minister Somkid Jatusripitak and the Ministers of Finance, Energy, and Higher Education and Science announced their resignations on Thursday. Mr. Somkid, who served as an architect of economic and finance policy in the government of the ousted former Prime Minister Thaksin Shinawatra from 2001 to 2006, was appointed Deputy Prime Minister to steer the country's economic policy in August 2015. Finance Minister Uttama Savanayana also resigned from his position as the Palang Pracharath Party’s head, the leading party in the governing coalition. The exit of Mr. Somkid and Mr. Uttama, who represented the “civilian face” of the junta government, signals the increasing domination of members with military ties led by former army chief Prawit Wongsuwan.
Dire economic outlook . . .
Changes in the top economic policy team come as Southeast Asia’s second-largest economy struggles with two years of stagnant growth and the fallout from the pandemic. The drop in tourism, which accounts for 20 per cent of the Thai economy, has left the country’s near-term economic prospects looking grim. The Bank of Thailand has downgraded its 2020 GDP forecast to a contraction of 8.1 per cent. Prime Minister Prayuth has called on the country’s 20 richest business leaders, including those from the five families that dominate the Thai economy, to undertake projects which “should reach all groups of Thai people and all parts of the country.”
Uncertainty prevails . . .
The Bank of Thailand’s incumbent governor, Veerathai Santiprabhob, will not seek another five-year term after his current term ends at the end of September. Although Mr. Veerathai’s exit is not associated with the factional fighting in the government, it adds further uncertainty about Thailand’s post-COVID economic direction. One immediate consequence of the departure of the country’s top economic policy-makers is a postponement of Thailand’s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Mr. Somkid, who is known as an economic reformer, was instrumental in pushing Thailand to join the trade agreement. Thailand may become dominated by trade protectionists.
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