BANGKOK -- Prime Minister Prayuth Chan-ocha's government on Thursday announced it had handed key positions in the energy and finance departments to former executives in a state-owned company and a commercial bank, in a reshuffle it hoped would quell public criticism after it sacked the economic team headed by former Deputy Prime Minister Somkid Jatusripitak.
The cabinet moves were announced in the government's public journal, Royal Gazette, on Thursday, after nearly three weeks of political vacuum left by the departed economic team.
Among the incoming leaders is Supattanapong Punmeechaow, former president and CEO of state petrochemical enterprise PTT Global Chemical, who will become a deputy prime minister and energy minister. Predee Daochai, previously a Kasikornbank co-president, will take over the portfolio of finance minister.
The two are expected to play key roles in the new economic team, replacing Somkid's group that included former Finance Minister Uttama Savanayana and former Energy Minister Sonthirat Sonthijirawong.
Although Somkid's team had been praised for its expertise in economic policymaking, it failed to address sloppy management of state enterprises. This made Thai Airways International the first national carrier to file a rehabilitation petition to the local bankruptcy court.
It is hoped that Supattanapong, with his background in managing a government enterprise, will be able to lead his team to implement reforms in the state sector.
PTT Global Chemical is a subsidiary of oil and gas giant PTT, which is 51% owned by the Thai government. State-owned enterprises contribute roughly 5% of government's revenue every fiscal year. As such, any improvements made to state-owned enterprises will have a direct impact on the funding of government policies and investments.
In the reshuffle, incumbent Minister of Foreign Affairs Don Pramudwinai will concurrently serve as a deputy prime minister. Suchart Chomklin, deputy leader of Palang Pracharat Party, will take over as labor minister.
Palang Pracharat is the leader in the government coalition that comprises over 20 political parties. The minister of higher education, science, research and innovation was assigned to Anek Laothamatas, an executive member of the Action Coalition for Thailand, one of Palang Pracharat's allies.
Prayuth had repeatedly said the reshuffle will be unveiled mid-August, but that announcement was brought forward as Southeast Asia's second largest economy is in desperate need for an economic boost after the havoc wreaked by the novel coronavirus pandemic.
The new team, which must be sworn in by King Maha Vajiralongkorn, faces high expectations from the people and businesses, who will be watching the performance of the economy that the Bank of Thailand has forecast will contract by 8.1% this year.
"The old economic team had a good understanding expertise in economic policymaking," Federation of Thai Industries Chairman Supant Mongkolsuthree told the Nikkei Asian Review. "The incoming team is new. We don't know how they will turn out to be. They must work in unity as a team," he added.
Supant called on the new team to set up a working group with the private sector to collaborate on regulatory reform. "The government's economic stimulus measures must be strengthened to stimulate more consumer spending," he added. "The government must spend more quickly to support Thai industries."
Under the former economic team, the Thai government approved a stimulus package worth 1.9 trillion baht ($61 billion). Of that, 600 billion baht was used to ramp up financial aid to temporary workers, contract workers and the self-employed whose incomes were hit by the virus outbreak and business shutdowns. Another 400 billion baht was invested in the construction of infrastructure with the aim of creating jobs.
The rest of the stimulus package came from the central bank, which allocated 500 billion baht as soft loans to small- and medium-sized enterprises, and 400 billion baht to the Thai corporate bond market by setting up a bridge-financing fund. Commercial banks and other nonbank institutions gave SMEs moratoriums on principal and interest payments for six months on loans of up to 100 million baht.
"The government and the banks should oversee cash flow of business operators and extend the repayment of debt for another two years as the COVID-19 is still causing business issues," said Supant.
Exporters share similar concerns. "I see a chance to draw foreign direct investment as a bit tough during this period, now that almost all countries across the world are encountering the same economic difficulty because of the deadly virus crisis," Thai National Shippers' Council Chair Ghanyapad Tantipipatpong told local media.
"The government should then focus on beefing up domestic investment, particularly in the agricultural industry, food, and medical supplies during this critical period," she said.
The former economic team also put in place a new program called Thailand 4.0 that was aimed at realigning dependence away from heavy industry toward a value-based economy driven by innovation, technology, and creativity over the longer term.
The Eastern Economic Corridor, a special economic zone of three provinces in eastern Thailand, is expected to play a key role in transforming the country from an export-dependent economy to one led by domestic demand and innovation.
Despite these policies at work, the government should always seek room for improvement on its projects, said Thai Chamber of Commerce Chair Kalin Sarasin. "What we want to ask from the new economic team is to carry on good development schemes, while improving projects deemed bad or impractical," he told local media.
Thailand has signaled its interest in joining the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, the trade pact between Japan, Australia, Canada, Mexico and seven other countries. Despite Somkid's push to join the bloc, the kingdom has yet to decide.
A parliamentary committee said it would need to study the costs and benefits over the next month after the plan to join the bloc met fierce opposition from civil groups that argued that the deal will harm food security and access to medicines. The study will not end in time for this year's meeting of the CPTPP commission, set for Wednesday, in Mexico.
Kalin called on the new economic team to proceed with international negotiations, while Supant said the private sector was conducting its own research on the deal, which will be reported to the government.