BoT: Populist policies could hurt economy
Bangkok Post
Published: 7/06/2011
The populist policies proposed by many political parties to win grassroots votes could in turn derail the recovering economy, Bank of Thailand governor Prasarn Trairatvorakul warned on Tuesday.
Promises of major financing for various measures to buy voters' hearts could result in higher inflation and increased public debt.
If there were any problems with these two indicators, the country’s economic stability would be affected, he said.
"I admit that I am worried about these two economic indicators. If you ask me which one has the more negative impact, I could only say that they have similar effects as these two problems are correlated," Mr Prasarn said.
However, he was not too much concerned about the problems of high inflation and public debt at the moment because it was not certain that the next government would really introduce the promised policies.
Bank of Thailand governor Prasarn Trairatvorakul
This would be known only when the new administration announces its policies to the general public, he said.
The central bank chief also denied any knowledge of media reports that about 10 billion baht cash is missing from the total amount of money in circulation and is suspected of being used to fund vote buying.
He said the BoT did not alert the Royal Thai Police Office that an amount of money has disappeared from circulation, as reported by the media.
It would not be easy to prove that about 10 billion baht really was missing because it amounted to less than one per cent of the total 1.1 trillion baht in circulation.
Only if specific information was provided, such as where the money was missing from, could the BoT track where the money had apparently gone, said Mr Prasarn.
Several online media reports quoted Northeastern Chamber of Commerce secretary-general Thawisan Lonanurak as saying he suspected the missing money was being used to buy votes, particularly in the Northeast where the race to win the July 3 election was intense.
Mr Thawisan said it was estimated that between 200 and 300 million baht would be circulated in each of the 375 election constituencies nationwide during the election.
This estimation was based on information he had obtained that each canvasser was being paid 10,000 baht or more and each voter would get at least 1,000 baht.
One election constituency had about 120,000 voters, he said. Therefore at least 100 million baht of vote buying money would be handed out by election candidates in each constituency.
National police chief Wichean Potephosree also dismissed the reports of the missing 10 billion baht, saying the Royal Thai Police Office had not been alerted about the missing money as reported.
Previously, on May 24, Thai-language news outlets reported that BoT assistant governor Sorasit Suntornkes said about 10 billion baht in cash had disappeared from circulation ahead of the election.
Mr Sorasit immediately denied that he made any public comment on this topic.
Sources indicated he had been overheard by reporters while making private comments to someone else.
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