The return of pork barrel
Problems with Thailand's 2009 fiscal budget
By Jon Fernquest |
Thailand's parliament is currently debating the annual government budget for the fiscal year 2009.
How government spending is distributed among projects in the annual budget and especially the return of notorious pork-barrel populist spending programmes that were all the rage during the controversial Thaksin era, is the focus of today's article.
The declaration of a state of emergency in Bangkok has also resulted in a jump in foreign borrowing costs for the Thai goverment (Read article).
Here is the fiscal budget article in full:
POLITICAL SHOWDOWN
'Populist' budget comes under attack
WICHIT CHANTANUSORNSIRIThursday September 04, 2008
The fiscal 2009 budget aims to boost economic growth by increasing funds on infrastructure investment and community development plans, according to Finance Ministry officials.
But sceptics argue that the budget, now under deliberation in Parliament, continues the pork-barrel populist policies initiated by the Thai Rak Thai government and later extended by the current People's Power Party.
Given the legal troubles facing Prime Minister Samak Sundaravej and the PPP, critics suggest the budget represents a last gasp by the government to push its provincial-growth agenda and consolidate its upcountry power base in anticipation of new elections soon.
Sondhi Limthongkul, the media owner-turned-activist leader, has even stated that halting the 2009 budget was one of several demands set by the People's Alliance for Democracy before it considers ending its months-long vigil outside Government House.
The budget, which starts this October, calls for spending of 1.835 trillion baht, equal to 17.9% of gross domestic product. This represents an increase in spending of 10.5% from the current budget.
Revenues under the budget are projected at 1.586 trillion baht, leading to a projected deficit of 249.5 billion, or 2.4% of GDP.
Some 124 billion baht, or 6.8% of the budget, is allocated for community development programmes, including 10.4 billion in supplemental money for village investment funds and 21.1 billion baht for the SML grant programme.
Funding for community marketing initiatives and development schemes to support job training, the One Tambon, One Product programme, "local wisdom" initiatives and debt forgiveness for small farmers and the poor also will increase under the new budget.
Benefit programmes and housing initiatives for the poor under the Ua-arthorn programme will receive 4.8 billion baht under the budget. The Ua-arthorn programme, aimed at providing low-income residents with flats and small homes, was suspended under the Surayud Chulanont government amid allegations of corruption and poor transparency.
Other funds will be allocated for infrastructure development, including 4.18 billion baht for land expropriation for constructing several new mass-transit routes in Bangkok.
Ironically, 264 million baht has been allocated for programmes aimed at supporting national reconciliation and democracy in the country.
Kiat Sittheeamorn, a member of the opposition Democrat Party, said many programmes outlined in the new budget deserved greater scrutiny and review.
He pointed to the 60-billion-baht programme to procure 4,000 new NGV-powered buses for use in Bangkok as one example of a procurement deal that raised more questions than it answered.
"The SML programme, for instance, has no details at all on how the money will be spent. The fear is that these funds will only go to support the government's political allies, the same as with the village investment funds," Mr Kiat said.
He said key assumptions in the 2009 budget also looked optimistic, particularly estimates of 5.5% annual economic growth and inflation forecasts of 3.5%.
"Oil price volatility and political risk could cause the economy to fall well short of these targets, affecting government tax revenues," Mr Kiat said.
"I don't see why the government must rush to pass the budget, particularly considering the current political situation in the country."
(Source: Bangkok Post, business, page B1, WICHIT CHANTANUSORNSIRI, 04-09-08, temp-link)
Vocabulary:
Government budget vocabulary
fiscal - related to government spending and taxes
the fiscal budget - the government budget for the year, planned spending by the government during the next year
the fiscal year - the 12 month year used by the government and business for budgeting, accounting, and reporting financial performance (also called the "financial year")
fiscal spending - government spending
fiscal policy - government spending and tax policy
fiscal discipline - controlling government spending and taxation (and its impact on the economy)
the country’s fiscal position - whether the government of a country runs a budget deficit or surplus in any given year
fiscal stability - when government spending does not change suddenly and unpredictably (from large populist programs near election time, for instance)
pork-barrel - spending a lot of money on local projects to win the votes of the people who live there
populist - claiming to represent and defend the rights of the common people (note that the claim may not match reality, populist political platforms can also be used for personal gain)
notorious - famous in a bad sort of way
pork-barrel populist policies
notorious pork-barrel populist spending programmes
a last gasp - the last breath of air taken by a dieing person
debt forgiveness - when a lender no longer requires that part of all of a loan be paid back (write off loan)
poor transparency - can not see everything that is happening in a situation, some important parts are hidden
scrutiny - carefully examining and looking for flaws and problems
review - consider a situation or system carefully to see how it could be improved
deserve Y - should get Y
deserved greater scrutiny and review - should get
procure X - obtain X
procurement - obtaining supplies for a large organisation
a procurement deal - a contract to obtain supplies for a large organisation
projected - what people expect in the future, forecast, predicted
deficit, government budget deficit - when government spending is greater than government income from taxes
the projected deficit - the expected government budget deficit
supplemental money - additional money
village investment funds - "the village fund scheme provided one million baht to each village as a revolving fund, managed by a village-level committee that could normally make loans of up to 20,000 baht per debtor. Some 71,102 villages and 2,339 urban communities qualified to enter the scheme, adn 5.3 million loans were made by September [2001], mostly for agricultural production or local commerce" (Pasuk, 2004, The Business of Politics in Thailand, p. 93, citing Worawan Chandoevwit, 2003, "Thailand's Grass Roots Policies," TDRI Quarterly Review, 18, 2)
a grant - an amount of money given to a project, that doesn't have to be paid back (not a loan)
an initiative - a new plan or idea to solve a problem (See glossary)
General vocabulary
a showdown - a final conflict to settle a dispute that has lasted for a long time
all the rage - very popular
controversial - the subject of intense public argument, disagreement, and disapproval
sceptics - people who question what others believe to be true
under deliberation - the issue is being carefully discussed, before a decision is made
an agenda - the things that someone is trying to get done
push its provincial-growth agenda - trying to get its plans for provincial growth accepted and adopted
consolidate - bring together, join together, make solid, secure, and complete
upcountry - northern Thailand and northeastern Thailand (Isan)
a power base - where someone gets most of their power from
consolidate its upcountry power base in anticipation of new elections -
a vigil - remaining quietly in a place during the night (to protest or pray)
allegations - bad things that people claim happened, but not yet proven
expropriation - taking something away from someone
land expropriation - taking land away from someone
reconciliation - becoming friends again after quarrelling
national reconciliation - when everyone in a country becomes friends again after quarrelling
oil price volatility - when prices move suddenly and unpredictably by large amounts
fall well short of targets - not reach or achieve (fall short) what you hoped to achieve (targets)
