Thais must prepare for downturn like 1997: economists

Leading economists have warned that Thailand could face a new round of economic problems in light of world economic uncertainty and Thais should prepare in advance to cope with the possibility of another economic downturn similar to the 1997 crisis, according to local media reports on Sunday.

Speaking at the Thai Strategies in the Global Trend seminar on Saturday, the economists was quoted by the Bangkok Post as saying that capital flows into and out of Thailand have increased in volume and the economical situation has become more unpredictable.

The economy was on the decline because of world economic uncertainty, particularly in the financial sector, former finance minister and deputy prime minister Virabongsa Ramangura said, adding "we are worried that if Thailand can't cope with this economic situation in time, the country could run into a new round of economic crisis."

He called on the government to come up with austerity programs to encourage Thais to economize and stop spending lavishly.

He said apart from the uncertainty of the world economy, the rise in energy costs and terrorism threats would also affect domestic growth.

Varakorn Samkoset, rector of Dhurakijbandit University, said the country urgently needed to pay more attention to human development to enable people to cope better with international uncertainty.

The government, he said, will need to find a way to measure the national economic condition more accurately.

The use of GDP figures did not always accurately reflect the economic success people were enjoying, Varakorn said.

Paiboon Wattanasiritham, chairman of the Center for the Promotion of National Strength on Moral Ethics and Values, said the King's self-sufficiency economic policy was an answer as Thailand faced a looming economic crunch.

Somkid Jatusripitak, caretaker deputy prime minister and commerce minister, conceded that the government would need to place more emphasis on human development to enable the country to compete with other countries.

The government's ability to develop its people to enable them to attain equality, socially and economically, would be the key to long-term national economic development, he said, adding that the government will need to promote domestic consumption to enable the economy to be less dependent on exports.

Supachai Panitchpakdi, Secretary-General of the UN Conference on Trade and Development, warned the government to be more careful in entering free trade agreements with developed countries to prevent undesired impact on the economy.

Supachai said he was very concerned that the government's Free Trade Areas (FTA) policy could put the country at a disadvantage if the agreements were not carefully studied beforehand.

He said he was not saying FTA were good or bad, but he believed agreements should be limited to countries in the same region because their economies were more or less the same size as Thailand's and the agreements were more likely to be mutually beneficial.

Source: Xinhua