Private-Public Partnerships to make fiscal stimulus move faster: Plus direct subsidies to poor farmers
By Jon Fernquest
Privately
owned firms that can move faster on projects may get a
bigger piece of the pie in the second stage of
Thailand's fiscal
stimulus
programme. Bottlenecks have plagued the disbursement of government funds in the first stage (Read article).
The money that the government spends has to get into the economy quickly.
Once consumers start spending the money, multiplier effects can start to operate and get the economy moving and growing again.
Today's article is on the efforts by the current administration to get greater private sector involvement in government spending programmes.
(Photo below right of the western "handshake" used to close deals and agreements, of course in Thailand the "wai" is used instead, see above)
private public partnership (PPP) -
a government service or private business venture which is funded and
operated through a partnership of government and one or more private
sector companies (See Wikipedia)
direct subsidies - giving money directly to people to help them pay the expenses of something
bigger piece of the pie - a larger percentage of the total amount
fiscal stimulus - government spending programmes to get the economy moving and growing again
bottlenecks - problems that slow down the progress of something
plagued - made problems for
disbursement (noun) - the paying of money from a fund to a person or department (for some purpose)
multiplier effects - a multiplier effect - when an initial effect grows bigger and bigger as it moves through the system
the current administration - the current Prime Minister and his cabinet (group of ministers controlling government departments)
a handshake - a short western ritual, two people grab each other's and move the other person's hand up and down (See Wikipedia)
direct subsidies - giving money directly to people to help them pay the expenses of something
bigger piece of the pie - a larger percentage of the total amount
fiscal stimulus - government spending programmes to get the economy moving and growing again
bottlenecks - problems that slow down the progress of something
plagued - made problems for
disbursement (noun) - the paying of money from a fund to a person or department (for some purpose)
multiplier effects - a multiplier effect - when an initial effect grows bigger and bigger as it moves through the system
the current administration - the current Prime Minister and his cabinet (group of ministers controlling government departments)
a handshake - a short western ritual, two people grab each other's and move the other person's hand up and down (See Wikipedia)
a wai - traditional
Thai greeting, with the palms pressed together in a prayer-like
fashion, a slight bow (See Wikipedia)
Firms can vie for more state work
WORLD BANK URGES INFRASTRUCTURE FUND, SUBSIDIES FOR FARMERSBy WICHIT CHANTANUSORNSIRI
5/07/2009
SURAT THANI : The Finance Ministry will let the private sector bid for more state projects under the second phase of the 1.43 trillion baht Thai Strength economic stimulus package.
Finance Minister Korn Chatikavanij said government agencies had been slow to disburse the 1.16 billion baht funds earmarked for investment projects in the second phase, so the private sector should get a bigger role. The state sector had also implemented projects too slowly, he said.
Mr Korn was speaking after he and ministry officials held talks with representatives of the World Bank in Koh Samui about the government's efforts to put the battered economy back on its feet through the scheme.
For fiscal 2009, the government had increased the ratio of public-private participation to 10% of new infrastructure development spending, totalling 143 billion baht.
The
government had previously earmarked just 2.8 billion baht, or 2% of
total spending for this year, for PPP projects. The ministry and the World Bank agreed the ministry should reduce barriers preventing private firms from taking part in the government's investment projects.
It should also get a state agency to supervise joint investment programmes between the government and private firms.
The government's e-auction process had held up the government's investment plans, the ministry and World Bank agreed, as it had failed to cut poor spending or end bidding collusion.
The Abhisit government has used the e-auction process for all its procurement and hiring activities. Past governments used it only to buy office supplies.
The World Bank has suggested that the government also adopt other auction approaches for state projects, said Mr Korn.
The ministry will amend e-auction regulations to overcome the bottlenecks. The changes would be complete by the end of the month.
The World Bank also recommended the government set up a fund to invest in infrastructure development.
Talks have been held with the Chinese government about setting up such a fund which would pay for infrastructure projects that benefit both countries.
For example, a railway line would be built which would run from China all the way to Singapore.
The World Bank suggested private firms be encouraged to take part in the infrastructure fund, said Mr Korn.
Deputy Finance Minister Pradit Phataraprasit said the World Bank also wanted the government to offer more assistance to poor and small-scale farmers.
The government would draw up a list of needy farmers and use it as a database for deciding on future assistance.
Luck Wajananawat, senior vice-president for policy and planning of the Bank of Agriculture and Agricultural Cooperatives, said the World Bank had also urged the government to pay farmers direct subsidies to ease their plight, while allowing market forces to freely price farm produce.
(Source: Bangkok Post, general news, Firms can vie for more state work, WORLD BANK URGES INFRASTRUCTURE FUND, SUBSIDIES FOR FARMERS, WICHIT CHANTANUSORNSIRI, 5/07/2009, link)
vie for - compete
for (many try to get one thing at the same time)
urge - try hard to get someone to do something, persuade someone to do something
subsidies - when the government gives money to help and pay part of the costs of an activity
pay farmers direct subsidies - pay poor farmers money directly (rather than through price support system that favours richer farmers with lots of irrigated land)
the private sector - the part of the economy that private businesses owned by individuals controls
the public sector - the part of the economy that the government controls
bid for state projects - offer to do a state project for a certain amount of money
economic stimulus package, fiscal stimulus - government spending projects or tax cuts to get the economy growing again
disburse (verb) - to pay money from a fund to a person or department (for some purpose)
funds earmarked for... - money kept or set aside for ...
implemented projects - do projects, carry out projects
World Bank - an international financial institution that provides leveraged loans[2] to poorer countries for capital programs with a claimed goal of reducing poverty (See Wikipedia)
battered - hit many times and badly damaged
put back on its feet - recover after failure or a big problem
ratio of public-private participation - public (government) participation in government spending projects as a percentage of private (business) participation
infrastructure development -
taking part in a project - being part of a project, participating in a project
barriers preventing private firms from taking part - regulations or rules that make it difficult or impossible for a private firm to be part of a fiscal stimulus, government spending programme
a state agency, a government agency - a government department that provides a particular service
supervise - be in charge of a project and make sure that everything is done correctly
joint - do some activity or project together
joint investment programmes - when both private businesses and the govnernment invest together in projects
an auction - selling things by competitive bids, selling to the person who offers that best price (See Wikipedia)
an e-auction - using computers and the internet to sell something to the person offering the best price
held up the government's investment plans
collusion - a secret agreement among people to do something dishonest or harmful
bidding collusion - a secret agreement to keep bids low
procurement - the official process of buying goods for the government or a company
a bottleneck - a problem slows down progress, particularly in business or industry
overcome the bottlenecks - solve the problems that slows down progress
needy farmers - poor farmers
Bank for Agriculture and Agricultural Co-operatives (BAAC) - Thai government bank specialising in microfinance and banking for farming households (See website, a case study [pdf], at the FAO)
a plight - a difficult situation full of problems
ease their plight - improve a difficult situation, make a difficult situation better
allowing market forces to freely price farm produce - when supply and demand in the market determines and sets the price for agricultural commodities
a commodity - a good bought in large quantities (many kilos) with every unit the same (every kilo of rice is the same)
urge - try hard to get someone to do something, persuade someone to do something
subsidies - when the government gives money to help and pay part of the costs of an activity
pay farmers direct subsidies - pay poor farmers money directly (rather than through price support system that favours richer farmers with lots of irrigated land)
the private sector - the part of the economy that private businesses owned by individuals controls
the public sector - the part of the economy that the government controls
bid for state projects - offer to do a state project for a certain amount of money
economic stimulus package, fiscal stimulus - government spending projects or tax cuts to get the economy growing again
disburse (verb) - to pay money from a fund to a person or department (for some purpose)
funds earmarked for... - money kept or set aside for ...
implemented projects - do projects, carry out projects
World Bank - an international financial institution that provides leveraged loans[2] to poorer countries for capital programs with a claimed goal of reducing poverty (See Wikipedia)
battered - hit many times and badly damaged
put back on its feet - recover after failure or a big problem
ratio of public-private participation - public (government) participation in government spending projects as a percentage of private (business) participation
infrastructure development -
taking part in a project - being part of a project, participating in a project
barriers preventing private firms from taking part - regulations or rules that make it difficult or impossible for a private firm to be part of a fiscal stimulus, government spending programme
a state agency, a government agency - a government department that provides a particular service
supervise - be in charge of a project and make sure that everything is done correctly
joint - do some activity or project together
joint investment programmes - when both private businesses and the govnernment invest together in projects
an auction - selling things by competitive bids, selling to the person who offers that best price (See Wikipedia)
an e-auction - using computers and the internet to sell something to the person offering the best price
held up the government's investment plans
collusion - a secret agreement among people to do something dishonest or harmful
bidding collusion - a secret agreement to keep bids low
procurement - the official process of buying goods for the government or a company
a bottleneck - a problem slows down progress, particularly in business or industry
overcome the bottlenecks - solve the problems that slows down progress
needy farmers - poor farmers
Bank for Agriculture and Agricultural Co-operatives (BAAC) - Thai government bank specialising in microfinance and banking for farming households (See website, a case study [pdf], at the FAO)
a plight - a difficult situation full of problems
ease their plight - improve a difficult situation, make a difficult situation better
allowing market forces to freely price farm produce - when supply and demand in the market determines and sets the price for agricultural commodities
a commodity - a good bought in large quantities (many kilos) with every unit the same (every kilo of rice is the same)
