June 20, 2014 5:55 am JST

Thai junta mounts blitz on economic front

TAMAKI KYOZUKA, Nikkei staff writer

The general wants to be seen as a steady hand on the economy. © Reuters

BANGKOK -- Thailand's military rulers have wasted no time trying to undo the economic damage from the monthslong political crisis that led up to the latest coup.

     Since taking power a month ago, the junta has also begun rolling back some of the ousted government's much-criticized populist measures. It is even showing zeal for tackling longer-term challenges, such as reforming state-owned enterprises.

     Back in action after an eight-month hiatus, the Board of Investment of Thailand approved on Wednesday support for projects worth a total of 123 billion baht ($3.85 billion), including investments by Toyota and other Japanese companies.

     The nation's economic outlook will brighten, BOI Secretary-General Udom Wongviwatchai assured reporters.

     Now under the junta's leader, Gen. Prayuth Chan-ocha, the BOI is ready to greenlight a backlog of some 700 projects worth more than 600 billion baht within two months.

     Prayuth has jump-started Thailand's stalled economic policymaking, starting with the national budget. The junta, which styles itself the National Council for Peace and Order, approved earlier this month a framework for a 2.57 trillion baht fiscal 2015 budget for a 2% increase on the year. Some 90 billion baht in back payments to rice farmers were pushed through in less than a month.

     Meanwhile, big infrastructure projects promised by the deposed government of Yingluck Shinawatra, including 800 billion baht for high-speed rail and 350 billion baht in flood control measures, have been shelved. The junta has chucked out more controversial policies, such as a rice-buying scheme and free tablet computers for schoolchildren.

     State-owned enterprises are also finding themselves in the general's sights. Senior executives at petrogiant PTT, Krungthai Bank, and Airports of Thailand, among others, have been shown the door as the junta sweeps away figures seen as owing their jobs to their support for Yingluck's party in the 2011 general election.

     This attempt to undo the legacy of the political movement led by Yingluck's brother, ex-Prime Minister Thaksin Shinawatra, has had unexpected consequences. More than 200,000 Cambodians working in Thailand bolted for home amid talk that the junta was out to arrest them. Many believed it, given the chummy relationship Phnom Penh had with the Thaksin-clan governments. Fearing a labor exodus, the junta had its hands full quashing the rumor.

     For now, Prayuth and company are enjoying favorable public opinion. A recent Bangkok University poll found that 70% of Thais say the economy and politics have improved as a result of the coup.

     Prayuth is playing up the "transparency" of the junta's economic policymaking as what sets it apart from the Thaksin camp, which was dogged by an image of cronyism and corruption. Military spending will provide a test of whether the general means what he says. After Thailand's previous coup in 2006, defense outlays doubled in three years. Prayuth insists that the fiscal 2015 figure will be in line with the previous budget.