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(Apr 19, 2013) The Thai government recently announced that it plans to invest two trillion baht (about US$68.8 billion) in infrastructure development megaprojects, most of them involving transportation, over the next seven years. The government plans to borrow the funds over that period, with repayment to be spread out over the next five decades. The government has submitted a bill to the Thai Parliament on the loan in order to authorize the borrowing. (Council Discussed Loan Bill: Prime Minister Yingluck Thoroughly Explains Four-Part Strategy [in Thai], POST TODAY (Mar. 28, 2013).)
The bill consists of 19 sections. The government has set down, under four main points, the key principles for the structuring of the investment:
1. make Thailand the hub of ASEAN connectivity;
2. encourage income distribution through reducing income disparities among major cities, suburban areas, and regions;
3. strengthen the Thai economy in a sustainable manner, reducing the cost and time of product delivery by connecting the production chains between the industrial, agriculture, and export sectors;
4. connect less traveled localities and popular tourist sites in Thailand to facilitate tourist visits to places beyond the current tourist sites, so that more areas will benefit from the tourist trade. (
The House of Representatives (the lower house of the Thai Parliament) voted on March 29, 2013, to approve the first reading of the loan bill, with 284 votes in favor, 152 votes against, and 7 abstentions. The bill has now been passed over to the 36 members of the vetting committee for analysis and to determine whether any sections of the bill need to be amended. (Id.)
The committee will have 30days to scrutinize the bill before forwarding it to the House of Representatives for the last two readings. (Two-Trillion Loan Bill Gets Through the First Reading with the Yes Vote 284-152 [in Thai], THAI RATH (Mar. 29, 2013).) At the second reading, House Members will review the bill to see whether they agree on the contents of the amended version. They will take a vote to approve of or reject the bill at the third reading. If the bill is approved, it will be sent on to the Senate, where it will also be subject to three readings. If the Members of the Senate agree with the bill's contents, they will send it back to the House for transmittal to the Prime Minister, who will present it to the King for his Royal Assent. (Chart on the Enactment of a Bill Under the Constitution of Thailand [in Thai], Senate of Thailand (last visited Apr. 16, 2013).)
The Democrats oppose the bill, saying that the government should finance its infrastructure spending, which is mainly for high-speed rail lines, from the regular fiscal budget, rather than by taking the loan, because the interest cost for a two trillion baht loan over 50 years would be about three trillion baht. That means that the total debt would be about five trillion baht. (Unfinished Debate on Two Trillion Baht Loan Bill, the Opposition and Government Discussions Continue [in Thai], MATICHON ONLINE (Mar. 29, 2013).)
Deputy Prime Minister Kittiratt Na-Ranong stated that the government would not use the fiscal budget for the infrastructure projects because any funds left over from it would be insufficient for other areas of development. (Mr.Varathep, Minister Attached to the Prime Minister's Office, Confirmed that the Two Trillion Loan Bill Is Not Against the Constitution, and Explained That for a Debt for 50 Years Thailand Can Enjoy the Use of the Property for More than a Hundred Years [in Thai], MATICHON ONLINE (Mar. 30, 2013).)
Written by Nichaya Soothipan, Intern, Law Library of Congress, under the guidance of Sayuri Umeda, Senior Foreign Law Specialist.
|Author:||Sayuri Umeda More by this author|
|Topic:||Economics and Public Finance More on this topic|
|Jurisdiction:||Thailand More about this jurisdiction|
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Last updated: 04/19/2013