ASEAN KEY DESTINATIONS
Thailand moves on water management
After years of inaction, with flood waters lapping at Bangkok’s suburbs, the Thai government has decided to draft a special law to invest in water management systems to mitigate the impact of floods, Finance Minister Thirachai Phuvanatnaranubala said.
Cabinet ministers yesterday approved a 50-billion-baht increase in the 2012 budget to finance reconstruction and aid programs in the midst of the worst flooding in decades.
They backed a budget of 120 billion baht (US$4 billion) for flood relief, including 80 billion baht from cuts in existing spending items and a portion from the increase in the overall budget. Local administrations will also shift 10 billion baht in funds to flood relief.
Government spending for the 2012 fiscal year, which started this month, will rise to 2.38 trillion baht from 2.32 trillion baht, with the deficit to increase by 50 billion baht to 400 billion baht (US$13 billion).
Mr. Thirachai, who on Monday said the floods could knock up to 1.7 percentage points off economic growth this year, said the expanded budget would finance reconstruction efforts.
Economic growth, previously estimated at 3.8 percent this year, could fall to as low as 2.1 percent due to the floods.
"If we don't invest in solutions, it will hurt foreign investor confidence and the industrial base," he said.
Cabinet ministers named Deputy Prime Minister Yongyuth Wichaidit as head of a screening committee tasked with vetting long-term measures.
Mr Yongyuth said the committee would focus on projects that could be implemented in time to help ease flooding problems next year.
Mr. Thirachai and Kittiratt Na-Ranong, another deputy prime minister, would be responsible for studying financing options for the programmes.
Mr. Kittiratt said financing would come from domestic borrowing, authorised either through an emergency decree or as an act.
Ministers yesterday were also directed to review existing spending plans and focus on projects that could give a short-term boost to the economy.
Prime Minister Yingluck Shinawatra also told the cabinet that economic ministries should increase their communication efforts with foreign investors to help rebuild business confidence, according to government spokeswoman Thitima Chaisaeng.
But Korn Chatikavanij, a deputy leader of the Democrat Party and finance minister in the previous government, said the government's response to the crisis was lacking.
"It is haphazard. It is obvious. We have been stressing to [the government] that they should concentrate powers in order for decision-making to be made more appropriately. But that just hasn't been the case," he said.
"Confidence is a major issue. For confidence, there needs to be transparency and there needs to be clarity of information."
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