Business leaders and economists have urged the government of Prime Minister Paetongtarn Shinawatra to address both short-term problems and structural economic issues simultaneously.
They view comprehensive debt restructuring, measures to help low-income earners, and safeguards for small and medium-sized enterprises (SMEs) against unfair foreign competition, especially online trading platforms, as the the top three priorities that must be tackled by the government as soon as possible.
Ms Paetongtarn announced her policies in parliament on Thursday, noting 10 urgent schemes focused on measures to improve Thais' financial status, state revenue, and efforts at comprehensive debt restructuring.
The government plans to introduce measures to reduce energy prices and public utility fees by revising energy price structures, while proceeding with the Pheu Thai Party's digital wallet handout, as well as promoting tourism via an overhaul of visa processing.
EQUAL IMPORTANCE
Vorapol Sokatiyanurak, an economist and former secretary-general of the Securities and Exchange Commission, said urgent economic policies are necessary to alleviate people's hardships.
However, he said it is essential not to overlook long-term solutions to the country's structural problems, which have festered, causing the economy to decline over the past 20 years.
Mr Vorapol said the government should address both short-term problems and structural economic issues simultaneously, as Thai economic growth over the last two decades has slowed significantly compared with 1980 to 2000, when the economy grew by an average of 8%.
From 2000 to 2020, the growth rate dropped to an average of 4%, and since 2020 it has averaged only 2%.
He said Thailand's major structural impediment is the country produces fewer products that are in demand. It is increasingly difficult to find Thai products that will remain competitive in the global market over the next 20 years, said Mr Vorapol.
"We need to adapt more quickly to the digital economy, as the world is now moving into an era of artificial intelligence-driven hardware. Basic industries such as electronic circuit boards or PC boards are evolving into PC boards that can integrate with AI, becoming smaller and flexible enough to be embedded in the human body," he said.
"We need a strategic plan to address the country's structural problems and urgently develop science and innovation."
In the past, Thailand was a major production base for hard disk drives and PCs, serving as a key supply chain hub globally.
Massive floods in Thailand in 2011 had a significant impact on this supply chain, said Mr Vorapol.
As Thailand was slow to adapt, foreign direct investment (FDI) was hesitant to invest here, resulting in a decline in FDI in recent years, he said.
In addition to improving skills, funding and personnel for SMEs, it is important to eliminate the monopoly system to provide small firms with equal opportunities to compete, said Mr Vorapol.
A CALL FOR STABILITY
Chanavat Uahwatanasakul, chief development and commercial officer at Central Pattana Plc (CPN), said the private sector would like more stability and a clear policy direction from the government, as it stands ready to collaborate with the administration.
So far, the policies laid out by the government, comprising short, medium and long-term plans, look promising, he said.
Mr Chanavat said the country's tourism sector has recovered faster than CPN expected, with visitors coming from short-haul markets as well as the Middle East.
With Thailand aiming to become a regional tourism hub, he said he agrees with the Thai Retailers Association's proposal to reduce taxes on luxury goods.
"Thailand has all the elements to be a regional tourism hub, so a tax cut on luxury products will strengthen our country's tourism image," said Mr Chanavat.
Nattakit Tangpoonsinthana, chief marketing officer at CPN, expects the 10,000-baht digital wallet handout to improve customer purchasing power.
Moreover, a tax refund scheme for shopping during the year-end season, if it is implemented, would stimulate the company's sales, he said.
SME SUPPORT
Kobsak Pootrakool, chairman of the Federation of Thai Capital Market Organizations, said providing assistance to SMEs and solving household debt problems are crucial for the government to address the current economic conditions.
Short-term economic stimulus packages are needed to help low-income people via several projects, such as the 10,000-baht handouts for vulnerable groups, he said.
"However, we would like to see limited funds offered to those in need in a format that is easy to use," said Mr Kobsak, who is also a senior executive vice-president at Bangkok Bank.
"Electricity tariff discounts can be used to ease the financial burden for low-income households."
He said the private sector wants to see clear investment policies for existing government projects, accelerating their implementation because they can stimulate the economy and increase investor confidence.
"If the government starts new projects, it will take time for them to be vetted by the cabinet and parliament, followed by the process of selecting a contractor," said Mr Kobsak.
"These procedures can take at least 1-3 years for a new project to be completed."
The government should also expedite technological development, creating a foundation to attract trade and investment in the next era, he said.
"In terms of capital market development, the government should continue to provide investment incentives for long-term savings, including for retirement, which is crucial for Thailand's aged society," said Mr Kobsak.
An aged society means 20% or more of the population is age 60 or older, which describes Thailand.
Somchai Lertsutiwong, chief executive of Advanced Info Service, said the government's priority should be comprehensive debt restructuring and measures to help people access lower utility fees.
The government should also devise a medium-term policy to restructure the economic engine to ensure sustainable growth, he said.
Dusit Sukhumvithaya, chief executive of Jaymart Mobile, said the digital wallet scheme and protecting SMEs against unfair foreign competition, especially from online platforms, should be the top priorities.
He said he believes the digital handout will drive economic growth in the final quarter this year.
E-commerce guru Pawoot Pongvitayapanu said safeguarding SMEs from unfair online competition requires dedication from the deputy prime minister.
He also pushed for more government support for Thai businesses involved in cross-border exports to Southeast Asia.
INVESTMENT CONTINUITY
Ms Paetongtarn, along with her cabinet and state officials, should continue to prioritise foreign investment promotion as a primary policy to propel the Thai economy, said Jareeporn Jarukornsakul, group chief executive of WHA Corporation, Thailand's largest developer of built-to-suit logistics facilities.
She said it is important for the new government to maintain business confidence among potential and current foreign investors, given Thailand's frequent political shifts.
"Though many foreign entrepreneurs that are familiar with Thailand are not deeply concerned about Thai politics, it remains crucial for the government to take good care of their investment projects," said Ms Jareeporn.
"This is vital for attracting foreign investment to the country."
The government should continue conducting roadshows to inform executives about its investment promotion policies because many could be hesitant to invest here following the recent political transition, she said.
"If everything is set for the government to start working, it should immediately take this opportunity to speed up investment decisions among foreign investors," said Ms Jareeporn.
She also recommended the new government push ahead with investments under the Land Bridge megaproject, promoted by the administration of former premier Srettha Thavisin.
The Land Bridge comprises a logistics network connecting Ranong along the Andaman Sea with Chumphon on the Gulf of Thailand.
The proposal ignited opposition from community conservation groups concerned over its impact on their way of life, as well as the project's corruption risk.
Ms Jareeporn said the project could be an effective method to stimulate investment in the South, which rarely sees large-scale, billion-baht investments.
She said she believes the Land Bridge has the potential to increase GDP and employment in the southern region.
SUBSIDY MANAGEMENT
The new government must better manage energy price subsidies and ensure they are short-term, not indefinite, said Praipol Koomsup, an economist at Thammasat University who was an assistant to former energy minister Narongchai Akrasanee.
He suggested authorities be more selective about who receives oil and electricity subsidies in order to control spending.
Mr Praipol did not oppose the government's immediate policy meant to mitigate the impact of high energy costs, but he cautioned against implementing subsidy programmes as a universal solution.
The Energy Regulatory Commission's decision, made during the Srettha administration, to maintain the power tariff, which is used to calculate electricity bills, at 4.18 baht per kilowatt-hour should be enforced to ease the financial burden of Electricity Generating Authority of Thailand (Egat), he said.
Egat incurred substantial losses after helping the government subsidise electricity bills to relieve the impact of expensive energy prices on businesses and households.
The commission agreed to apply the 4.18-baht rate until the end of this year.
For the long term, Mr Praipol advised the government to have talks with independent power plant operators, requesting they reduce the price of electricity sold to Egat.
Authorities can grant companies investment incentives for clean power development projects if they agree to offer discounts on electricity sales, he said.
Mr Praipol also wants the government to approve Thailand's new national energy plan, which already completed a public hearing.
The plan outlines a roadmap for a low-carbon society, and was scheduled to be finalised by the National Energy Policy Council this month.
However, there were concerns the timetable might be affected by the transition to a new government.
QUICK MEASURES
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said the government should prioritise measures that can be implemented immediately to help solve the economic crisis.
To expedite the economic recovery, he said the chamber wants accelerated disbursement of the fiscal 2024 budget nationwide, as well as disbursement of fiscal 2025 budget within a specified time frame to revive consumption.
The chamber approves of the government's plan to distribute the digital wallet handout to 14 million vulnerable people in late September, which is expected to increase GDP growth by 0.2-0.3 percentage points over the short term.
As for the influx of cheap, low-quality Chinese imports, the government should seek collaboration from Chinese authorities over compliance with Thai laws, according to the chamber.
Chinese authorities must help to screen products before they are exported to Thailand, said Mr Sanan.
Foreign e-commerce platforms that sell products in Thailand must file value-added tax registration with the Revenue Department.
The government should also promote foreign investment by requiring foreign investors to use local content, said the chamber.
In addition, the chamber pushed for more vigorous state efforts to protect local businesses from the influx of cheap goods, especially via e-commerce platforms, such as enforcing anti-dumping and anti-circumvention measures.
LEGALISE AND TAX HOTELS
Of the 10 urgent policies pledged by the new government, tackling unfair competition from foreign companies, bringing underground economies into the tax system, and debt restructuring are the policies that should be prioritised, said Thienprasit Chaiyapatranun, president of the Thai Hotels Association.
He said expediting methods that collect more tax from foreign online travel agents (OTAs) in Thailand would benefit the industry as these companies are mostly listed overseas.
These OTAs typically charge hotels a high commission rate of 20-30% of the room price.
Moreover, the OTAs require hotel owners to sign a price parity deal with them, which means hoteliers must sell their rooms at the same rate or higher with other platforms, which limits hotel operators' ability to curate their own pricing strategy.
Mr Thienprasit said some European countries already eliminated price parity rules on these online platforms.
Meanwhile, there is a large underground business in the hotel industry, with properties without a hotel licence illegally accepting daily guests.
He said if the illegal hotels are brought into the system via strict law enforcement, the government can earn more tax revenue from tourism.
Mr Thienprasit said illegal hotels account for 70% of total accommodation nationwide and mostly sell their rooms via online platforms, which means they are difficult to track.
He said debt restructuring and assisting small hotel operators is also essential to improving the country's service sector and competitiveness.
Ms Paetongtarn is interviewed by the media following a cabinet meeting at Santi Maitri Building, Government House on Sept 7. Nutthawat Wichieanbut
Help for low-income earners and small businesses is suggested as a priority for the new government. Apichart Jinakul