The election campaigns of political parties should focus on improving the country's competitiveness with effective short- and long-term economic policies rather than populist sops or market intervention that could mar the economy and add fiscal burden, says business leaders.
They are hoping for a peaceful political atmosphere to draw more investment to Thailand and enable the country to better compete with its neighbours.
MORE INSIGHTS SOUGHT
The Federation of Thai Industries (FTI) wants political parties to demonstrate more insight into economic solutions rather than wooing voters through eye-catching campaigns.
Kriengkrai Thiennukul, chairman of the FTI, said on the whole, parties' economic policies are "not that different and inclined towards populism".
He said Thailand needs clear, effective economic policies for the short and long term that can continue to drive the country forward when political power changes hands.
"There may be a vacuum in implementing policies while we await the establishment of a new government," said Mr Kriengkrai.
"The incumbent government needs to find ways to keep policies operating without interruption."
To gather more insightful views from political parties on economic circumstances, the FTI is preparing to invite party representatives to join a forum. FTI members chose five cost-related issues that will serve as topics for what Mr Kriengkrai called a forum debate.
The topics are the cost of energy, raw materials, labour, finance and logistics.
The FTI wants to know the parties' approaches to economic problems before a new government is chosen, he said.
Thailand has faced several economic woes since Covid-19 hit the country in early 2020, said Mr Kriengkrai. Lockdown measures to contain the virus spread subdued economic activities, then once the pandemic eased last year the Russia-Ukraine war led to higher energy costs, which drove up goods prices, causing many countries to increase interest rates to cool inflation.
Higher living costs resulted in demands to increase minimum wages, adding more financial burden onto manufacturers.
Efforts to solve one problem caused a new obstacle for businesses, he said.
Logistics cost is another topic that should be addressed, as Thai manufacturers want to gain benefits from the reopening of China, according to the FTI's latest survey of 280 members who are company executives in 45 industries.
COMPETITIVENESS FOCUS
Aat Pisanwanich, director of the International Trade Studies Center, said the economic policies of parties touted during the campaign are still populist, focused on market intervention. They hardly touch on the country's real problems, such as how to address the high price of imported chemical fertiliser and whether to promote organic fertiliser instead, said Mr Aat.
He said the parties should ask why Thailand's manufacturing sector finds it hard to compete with neighbouring countries, or how climate change will affect the country's exports.
The parties should be considering how Thailand will solve these problems, said Mr Aat.
He said he believes some farmers have begun to realise market intervention on crop prices is no longer an appropriate move, even though farmers gain a direct benefit from the policy.
Political parties are not as focused on promoting reducing production costs, said Mr Aat. The government should offer incentives to farmers who can reduce costs because when farmers have no motivation, the state keeps subsidising their production cost, he said.
Permanent finance secretary Krisada Chinavicharana said he assigned the Fiscal Policy Office to study the campaign proposals of parties to see if they could be implemented and to determine the effect on the economy and the nation's fiscal status.
IMPACT ASSESSMENT
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, declined to comment on specific party pledges, stating that each party should listen to the people and initiate policies that deal with their problems.
"Policies and measures presented to the public should come with a comprehensive assessment of their impact on the economy and people's cost of living," said Mr Sanan.
"The private sector would like to convey to parties keen to form the next government their campaign proposals should take into account the national strategic plans that have already been implemented to ensure the continuity of the country's economic development, rather than their own populist policies. The next government's policies should enable the country to overcome the 'middle-income trap' Thailand has been mired in for decades."
He said the proposals must not create a fiscal burden or raise the country's public debt, nor violate economic and market mechanisms.
"We really want to see political parties explain how much money will be used for their policies, where it will come from, how the budget will be used and how the spending can generate direct and indirect benefits for the country," said Mr Sanan.
"Only then can people feel more confident that a party's policies will not have a negative impact on Thailand's fiscal status."
In addition, he said parties should propose policies that help reduce production costs for the private sector, such as energy bills, while helping small and medium-sized enterprises (SMEs) gain easier access to low interest rates, appropriate technology support, language and skill development for human resources, and ecosystem development that is conducive for both domestic and international competition.
Mr Sanan said party policies should focus on creating jobs and promoting careers, especially in provincial areas to raise income and eventually reduce the need for short-term assistance.
The private sector is also eager to see policies that revise regulations and procedures regarding ease of doing business, he said.
Government stability and fewer political conflicts are essential because they build confidence among foreign investors and traders, said Mr Sanan.
HIGH ANXIETY
Paiboon Nalinthrangkurn, chief executive of Tisco Securities, said party campaign policies are largely populist and lack long-term outlooks.
More importantly, none of the parties have mentioned how to fund their populist policies. He said in the US, politicians always talk about where the budget will come from for policies, such as higher tax rates.
"When the campaign progresses to debates, there will be more clarity about funding sources. At this time, there is not much analysis," said Mr Paiboon.
Therdsak Thaveeteeratham, executive vice-president of Asia Plus Securities, agreed most party pledges focus on populism, such as increasing welfare or raising the minimum wage.
"One policy we want to see is the continuity of state mega-projects because they can boost the economy in a concrete way," he said.
"We also want to hear a discussion of proposed tax structures."
Mr Therdsak said the capital market remains on edge about the financial transaction tax, which the government announced it would proceed with, but the draft law has yet to be signed into law.
While the Thai private sector has proved resilient, surviving several economic crises and disasters, government support would improve their efficiency and competitiveness in the international arena, he said.
Pakorn Peetathawatchai, president of the Stock Exchange of Thailand, said it is difficult for the bourse to evaluate the impact of policy proposals until a new ruling coalition becomes clear.
"In Thailand, no single party can win enough seats to form a government. Most of them are coalition governments," said Mr Pakorn.
"For the private sector, this is good as businesses have continued to grow despite a variety of governing coalitions."
LOW-INCOME STIMULUS
Somchai Lertsutiwong, chief executive of Advanced Info Service (AIS), Thailand's biggest mobile operator by subscriber base, said while political parties have floated various ideas to canvass for votes, the focus should be on real economic stimulus that can support the country's recovery and assist SMEs and low-income earners.
"Improving the well-being of low-income earners will help strengthen the country's economy, which will be a boon for big corporates as well," said Mr Somchai.
Stimulus packages could include a short-term loan to support people's daily expenses and SMEs, as well as assistance for businesses to continue their operations or expand in the future, he said.
Mr Somchai said he supports some campaign pledges such as a minimum wage hike because it would help low-income earners deal with their financial burden.
He said there is no great concern for big corporations now despite critical economic challenges as they enjoy economies of scale and have effective operations. Yet SMEs and low-income earners are suffering from high inflation, diminished purchasing power and increasing interest rates, said Mr Somchai.
"Real stimulus focusing on real targets is needed to ensure sustainable growth," he said.
The country's recovery requires strong domestic purchasing power and consumption, said Mr Somchai, but the purchasing power of low-income earners is in crisis because of high household debt.
Several political parties, including Thai Sang Thai, Sang Anakot Thai and Palang Pracharath, have identified this concern and addressed it in their campaigns, he said.
More balance needed
Suksit Suvunditkul, president of the southern chapter of the Thai Hotels Association, said policies to promote domestic tourism, a solution to the tourism industry's labour shortage, and reducing expenses for hotel operators should be priorities for the new government.
Mr Suksit said Thai tourists rarely travel to different regions of the country, such as from the north to the south. He said subsidies for domestic travel costs to tourist destinations, especially in secondary tourist cities, would help the industry as a whole because Thailand may have been too dependent on foreign tourists in the past.
Campaigns promoting spiritual tours and the "We Travel Together" scheme, which subsidises some accommodation fees, should prove popular with Thai tourists, said Mr Suksit.
Subsidies should also cover local community development for human and environmental resources to help take care of local tourist destinations, he said.
For hotels, a few options include a policy offering free sustainability consultation for operators, or supporting business meetings in hotels with green certificates, said Mr Suksit.
The labour shortage is severe and a short-term solution is policies to support vocational school internships with hotels or business operators, he said.
Mr Suksit said in the long term Thailand will likely need more foreign workers as the country becomes an "aged society", with a dwindling proportion of the population working age.
Attracting foreign workers through signing agreements or a memorandum of understanding with related organisations will take time to sort out the process, he said.
"The tourism industry still needs human workers as technology will not solve all the issues," said Mr Suksit.
While the number of tourist arrivals and flights are increasing, hotel operators also face high operational costs, such as power bills hiking by 20% from last year because of a rising fuel tariff rate, he said.
Many political parties are pushing a daily minimum wage hike and Mr Suksit said such a move would likely affect hotels, while an oversupply of hotels could lead to decreasing room rates in the long term.
The solution is attracting more quality tourists with high spending power, he said.
As tourism remains on the recovery track, policies that defer principal and interest payments for SMEs are still essential, while the term of soft loans should be extended from 5 years to 7 to 10 years, said Mr Suksit.
FOREIGN INVESTMENT BOOST
Vikrom Kromadit, chief executive of Amata Corporation, a major industrial estate developer, expects foreign direct investments to increase if the election leads to less political conflicts.
"Investors -- both foreigners and Thais -- want a peaceful political atmosphere," he said.
"They don't want to see street protests, especially demonstrators marching in the streets."
If a new government can put years of disputes between political camps to bed, foreign investors will have more confidence in Thailand, said Mr Vikrom.
"If we have peaceful politics, we can draw more investors and better compete with neighbouring countries that have lower wages and more free trade agreements," he said.
Mr Vikrom blamed the severe political conflicts for causing Thailand to lose competitiveness, with many investors choosing to invest in Vietnam, Indonesia and Malaysia instead.
While Thailand dealt with its political squabbles and its economic growth remained tepid, Vietnam recorded GDP growth of 8-9% a year for five straight years, he said.
Additional reporting by Nuntawun Polkuamdee, Komsan Tortermvasana and Molpasorn Shoowong
