Policy of the Government

 

Policy Statement of the Government of

His Excellency Thaksin Shinawatra

Prime Minister of Thailand

Delivered to the National Assembly

on Wednesday, 23 March 2005

Respected President of the National Assembly,

In accordance with the Royal Approval, dated 9 March 2005, appointing myself as the Prime Minister of Thailand, and the Royal Command, dated 11 March 2005, appointing the members of the Cabinet, the Government has formulated its policies according to the democratic principles of the parliamentary system and the constitutional monarchy. This system forms the fundamental basis of the Thai way of life. The said policy also includes the Directive Principles of Fundamental State Policy as stated in Chapter 5 of the Royal Thai Constitution. The Government now presents its policy to the National Assembly as a declaration of its intent, strategy and policy to further strengthen national stability and the sound development of society, the economy and politics for the benefit of the country and the happiness of its people.

Mr. President,

In continuation of the policy of the previous administration, and in line with the public announcement of the present government during its election campaign that the past 4 years was a period of economic recovery and reconstruction, the upcoming 4 years will be devoted to the emergence of a strong and sustainable Thailand. The Government therefore wishes to report on past developments which are directly related to its future plans.

When the last administration came into power on 26 February 2001, Thailand had suffered economic recession due to its heavy dependence on foreign markets. Particularly the first quarter of 2001, the country’s economic growth rate was only 1.7 per cent, export value dropped by 1.3 per cent, currency value depreciated to 43.2 baht per US dollar, while public debt accounted for 55.9 per cent of the gross national product (GNP). Unemployment reached 1.2 million people and the number of the country’s poorest rose to 8.9 million people. All of these required the Government’s urgent and focused efforts to restore the stability of the country’s economy after the crisis.

During its first 4 years, the Government adopted and implemented a “Dual Track Policy” which emphasized the importance of stimulating the economy at the level of the grass-roots and the small-and medium-sized enterprises -- which constitutes the majority of the people. The Government further focused on reducing production costs, increasing income and expanding opportunities, while, at the same time, strengthening the competitiveness of the production and service sectors. The Government also paid special attention to restoring economic stability and implementing efficient fiscal policy management.

As a result, the Thai economy recorded a higher growth rate of 6.9 per cent and 6.1 per cent in 2003 and 2004 respectively as well as a stabilized exchange rate of around 40 baht per US dollar. Export value soared to 23 per cent in 2004 in consequence of Thailand’s Free Trade Agreements (FTAs) with various countries as well as the development of new potential of the service sectors based on Thai traditional skills and indigenous products. Private investment rose 15.3 per cent in 2004, while public debt dropped to around 47.8 per cent of GNP. Foreign reserves increased to an historical record of 49,800 million US dollars or more than four times of the short-term foreign debt. All these were the results of the wider access of people to capital, the flow of investment capital and the promotion of job and income opportunities for people at the grass-roots level.

On the social front, the number of people provided with universal health insurance rose from 78.2 percent in 2000 to 95.4 percent in 2004 due to the 30-baht universal health care scheme introduced by the Government. Employment increased by 3.6 million people within the 4 years whilst the number of poor people decreased to 6 million people as the result of the easier access of capital and knowledge provided by the Government. The average number of years of education was increased from 7.2 in 2000 to 8.1 in 2004 due to the wider educational opportunities and the deregulation of educational loans for students. The number of drug cases dropped from 420.7 per hundred million people in 2000 to 116.5 in 2004 owing to the Government’s campaign against drug dealers and influential persons.

Mr. President,

I wish to express my gratitude to the Thai people and the members of parliament for entrusting the Government to administer the country for its second term of office, thus, demonstrating their confidence in the socio-economic policies and the efficient people-centered administration of the Government.

During the past 4 years, the Government’s policy emphasized problem-solving and opportunities for the majority of the people, which proved to succeed at a number of levels. However, there are still unresolved problems which the Government strongly intends to deal with, particularly poverty. In addition, the Government will develop the quality of life and social services to prepare the country for demographic changes, and to take care of people from cradle to grave. Drugs, influential persons and corruption will also be eradicated from the Thai society.

At present, an imbalance between industrial and agricultural sectors still exists in the country’s economic structure. The industrial manufacturing continues to be run by placing orders or according to the pattern developed by the foreign intellectual property owners, which, in turn, makes the country deeply dependent on the imports of raw materials, capital and technological expertise from abroad. Consequently, Thailand gets its returns mainly from wages and raw materials, the minor component in the production chain, which can be defined as “Do much, gain little”

The agricultural sector, which provides a living for the majority of Thai people, still suffers from the fluctuation of crop prices in the world markets, the risk of natural disasters, the degradation of soil and water resources, and the non-tariff barriers against exported raw materials. At the same time, services sectors, especially tourism, still rely on natural resources without optimizing the value added. Therefore, the Government intends to restructure the country’s economic structure. Otherwise, the economic growth will lead to a cycle of trade deficit and price competition which prevents the country from sustaining that growth.

Apart from the challenges within the country, the Government has to cope with the following dynamics of the world economy and international relations:

(1) The changes in the globalized economy and the trend towards free trade around the world will not only provide Thailand with opportunities to increase the country’s exports, tourism and investment but also increase competition in the world markets. Therefore, we have to be conscious of this tendency and prepare ourselves to deal with the free flow of news and intelligence, technology, labor and peoples, capital, trade and investment and services in order to maximize their advantages.

(2) The imbalance in the world economy and financial speculation may lead to the fluctuation of exchange rates and commodity prices in the world markets.

(3) Rapid technological changes resulting from the accelerating improvement and development of fundamental technologies, including information technology, bio-technology, material technology and nanotechnology.

(4) Social changes as the result of the world demographic trend towards aging societies, urbanization and the awareness and cross-cultural fertilization can be considered as opportunities and challenges to the human resources development process and the future of the country, and finally,

(5) The uncertainties in the world political situation and threats to security include the spread of new diseases, various kinds of narcotics and natural disasters caused by climate change. All require the Government to introduce preventive and corrective measures, both nationally and internationally, to prevent the serious and negative effects on the economy and the way of life of Thai society.

The Government realizes that administering the country in the face of these challenges requires well-designed strategies and planning, efficient and effective bureaucracy, sufficient, fair and up-to-date laws and regulations, accountable and transparent public administration at every level and the participation of all elements of society united to drive the country.

Mr. President,

The next four years will be four years that transform Thailand into a secure and sustainable nation in every respect. The Government will provide the opportunities for the future and lay solid foundations for the economy, society and politics by focusing on strengthening the local people, replenishing the fertility of soil and water resources and restoring the power of decision to the community. The Government will also emphasize the restructuring of the economy and society to become more balanced, immunizing the economic system and reforming the education system with the aim of developing Thailand as a society with knowledge-based economy according to His Majesty the King’s concept of a Sufficiency Economy. These efforts will lead Thailand to become a country with balanced, prosperous, secure and sustainable structures. Towards this end, the following policies will be pursued:

Mr. President,

The Cabinet’s policy formulation on the administration of state affairs, just described, rests on a factual basis pertaining to the country and continuity with past events, including an analysis of the new economic, social, political and administrative environment, and the changing world situation. After this policy statement, the Government will expedite concrete implementation by drafting a national action plan, comprising a legislative plan, national administrative plan, and action plan for each government agency, to serve as guidelines for future work.

The Government wishes to reassure the National Assembly, as the body charged with overseeing state administration, that the Government will administer the country with loyalty, honesty, and determination for the country to achieve the same level of prosperity as civilized nations, for equality in a more balanced society, and for pride in being Thai, truly with the interests and happiness of the Thai people at heart.

Thank you.

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Annex A

Annex B

Policy of the Government of H.E. Prime Minister Thaksin Shinawatra

Delivered to the National Assembly on Monday, 26 February 2001