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Thailand's military junta on a spending spree

Thailand's military junta on a spending spree Anthony Harrington

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If and when Thailand's military ruler General Prayuth Chan-ocha finally hands over to a civilian elected government, that government is clearly going to have a debt problem of serious proportions. As The Economist noted recently, one of the big ironies of Prayuth's regime is that having ousted a civilian regime that was big on populist policies, it has decided to charge down the same route.

Seemingly no expense is too much in Prayuth's bid to win over the populace. As the BBC reported in June, the junta instructed TV regulators to ensure that the football crazy Thai fans could watch all the World Cup games on free channels. The population is also enjoying free haircuts and a series of concerts staged at the behest of the regime.

This is all part of Prayuth's "Happiness" campaign and apparently  went down a treat with the fans, about a third of whom could not have afforded a decoder to watch games screened only on encrypted channels. The broadcaster RS, which had planned to screen only a third of the games for free, is said to be claiming $21.5 million in compensation.

However, that is only the start of Prayuth's spending spree. He has taken up promises by the ousted regime to pay subsidies to farmers and to cap the price of certain foods. According to The Economist, Prayuth has already paid out some $2.8 billion to rice farmers under the subsidy scheme. It's infrastructure spending plans, mainly in the field of transport, are said to be worth some $72 billion. Plus it is committed to clearing a $21 billion backlog of projects waiting for approval from the Board of Investment, which Prayuth now chairs.

As proof positive that you really can fool some of the people most of the time, the coup leader's popularity, as registered in a recent survey, is on the up and up. The Thai consumer confidence index is on the rise finally, reversing a 13 month, month-on-month decline. Thailand's SET stock market index is up some 17% since the start of the year.

According to a recent Bloomberg article, Prayuth’s “same-old-same-old” approach, coupled with a dose of “get happy” (the regime’s Happiness push), is having the desired effect. The Thai economy, which had gone into a tailspin after months of street protests before the coup, is picking up. In mid-June The junta lifted the curfew that had been in place in Bangkok since the coup, raising it not just for Bangkok but nationally, in order to “boost tourism and ease the impact to daily life”, the junta commented. The move was favorably received by foreign investors, who pumped some $840 million into Thai stocks and bonds in June. This pushed the bhat up 0.2 percent to 32.383 to the dollar. The SET index is up 3.6% since the coup.

Bloomberg cites Bank of Thailand director for macroeconomic policy, Don Nakornthab, saying that the economy will start to recover in the current quarter and will gain momentum in the three months through September. A warning shot across the bows of the junta, however, is the fact that on latest figures, despite the anticipated upturn, the Thai economy actually shrunk by 2.1% by comparison with the prior three months.

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Tags: agricultural subsidies , Board of Investment , General Prayuth Chan-ocha , Thailand , transport
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