The majority of the major political parties running in the general election on May 14 are putting a lot of effort into appealing to voters with populist policies including cash handouts, agriculture and energy subsidies, and quick fixes for pressing problems.The public sector in Thailand has long been criticized for being too large, ineffective, and opaque.
Due to this significant structural flaw, up to 75% of annual government revenue is set aside for routine expenses like wages and benefits for state officials, operating and utilities bills, and other maintenance-related expenses. For instance, the government has planned 3.185 trillion baht in expenditures for fiscal year 2023, yet only 695 billion baht, or 21.82 percent of the whole budget, goes toward capital spending, whereas 2.4 trillion baht, or 75.26 percent of total revenue, goes into current spending.
40 percent of the total annual budget is spent on the salaries and benefits of state employees alone. This heavy financial load has been partially attributed to an overgrown and ineffective bureaucracy.
Pheu Thai states his intentions
If elected, the Pheu Thai Party, which is now dominating the polls, has pledged to implement public sector reforms. The policy declaration lacked specifics, with the exception of a promise to use more digital technology to improve the effectiveness, transparency, and anti-corruption of the public sector.
Top party officials have also pledged to reduce military spending and use the savings to bankroll a 10,000 baht digital wallet giveaway to all adults over the age of 16 within months of taking office.
The Move Forward Party has promised to eliminate conscription in order to cut back on military spending and the strength of the armed forces.
The two liberal parties have pledged to decentralize the public sector by limiting the administrative reach of the federal government and increasing the role of local governments. The state-owned power Generating Authority of Thailand (Egat), which now maintains a monopoly on the power market, has committed to liberalize it under the leadership of the Move Forward Party.Changing the energy industry
Chart In response to rising oil prices and soaring electricity prices, the Pattana Kla Party is running for office with a commitment to overhaul the energy industry. The party proposes to levy a windfall tax on oil refinery businesses that are seeing exceptionally large profits as a result of the elevated price of crude oil on the world market, which was primarily brought on by the conflict in Russia and Ukraine and the sanctions put in place against Moscow.
Two enormous state-owned companies, PTT and Egat, essentially control the entire energy sector.
The political groups who made up the governing coalition that is leaving office haven’t been very open about revamping the public sector.
According to Athiphat Muthitacharoen, an associate professor at Chulalongkorn University’s Faculty of Economics, “reforming the public sector is a long-term issue and most of the political parties may not have the vision for such a challenging task.”
According to him, they want to start initiatives right now that may be finished during the following four years of their mandate.
overgrown bureaucracy
The future administration will need to start by reducing the number of state employees if it wants to make the public sector more efficient. If the government intends to reduce the skyrocketing cost of healthcare for state officials, he believes, the nation’s healthcare system will also need to be reformatted.
In order to stop the drain on taxpayer money, Veerathai Santiprabhob, a former governor of the central bank, has also called for the general reform of the public sector, with a focus on state companies. He believes that a bloated public sector will use up more public resources.
Following the financial crisis of 1997, Thailand undertook significant reforms; however, the country has not yet been successful in changing the fundamental state-owned enterprises.
The State Railway of Thailand continues to be heavily indebted. Following its bankruptcy filing in 2020, Thai Airways International is still working to restore its business. Due to its monopoly on the electricity trading market, Egat has been held partially responsible for the high cost of electricity that homeowners and businesses must pay.
In order to remove Egat’s monopoly, economists have argued for the deregulation of energy generation and transmission.
According to independent economist Praipol Koomsup, “the production of electricity needs to be further liberalized and more small producers or individuals should be allowed to trade in electricity.”
overly strict regulations
The overhaul of the regulatory framework and bureaucratic structure is another crucial issue. Critics claim that exorbitant prices are imposed on both firms and customers by a sluggish bureaucracy and out-of-date laws and regulations.
A reform of Thailand’s bureaucracy and out-of-date legislation, according to the Thailand Development Research Institute (TDRI), an independent think tank, would increase GDP growth by 0.25 percentage points yearly.
Costs associated with licensing laws and regulations totaled roughly 200 billion baht. The private sector would be able to save spending 130 billion baht annually, or 0.8 percent of GDP in 2018, if needless legislation were repealed.
According to a Bank of Thailand research released in 2017, efforts to repeal numerous antiquated laws and regulations or simply streamline them would result in annual savings for businesses and common citizens of up to 130 billion baht. Regulations have imposed significant costs on firms and individual consumers, such as the convoluted licensing process or tax reporting requirements.
High cost of ineffectiveness
According to the TDRI, lengthy delays in the vaccine procurement process during the early phases of the COVID-19 pandemic were partially the result of bureaucratic red tape. These delays have been linked to avoidable deaths and significant financial losses.
Recently, critics have pointed the finger at government inefficiency for the government’s failure to combat the regular occurrence of forest fires and their direct impact on air quality and public health.
