6 June 2024

The government’s legal advisers have issued a very polite warning about the massive borrowing plan which is necessary if the ruling Pheu Thai Party is to keep its controversial election promise. Problem is “being nice” can always be misinterpreted and that is exactly what happened over the past few days.

The Council of State’s opinion on the Bt500 billion borrowing bill was first considered a nod but then not quite so when the respectful wordings were carefully scrutinised. The advisory body actually warned that the government must strictly comply with the Fiscal Discipline Act, citing Section 53, which states that a loan bill can be issued only when there is a crisis or an urgent necessity, and Section 57, which states that the borrowing must be spent on a plan or project which is economically or socially worthwhile.

More sections of the Fiscal Discipline are coming into play as more and more experts look into the Council of State’s words and complications of the digital wallet programme. Those sections basically demand absolute prudence regarding how the state deals with its own or borrowed money.

In a matter of hours, government leaders have gone from “See? The borrowing bill has been approved” to “The Council of State’s job description is about giving opinions, not greenlights”. But Jatuporn Prompan, a former Pheu Thai street warrior who has become the party’s sworn enemy, insisted it was an unmistakably “No” said in the most covert way.

He is not only one, though. Columnists, academics and newscasters have also read between the Council of State lines and said it was as polite a “No” as it can get. This adds to the previous rumbling against the enormously-expensive plan, a resistance so strong that Prime Minister Srettha Thavisin had to ask digital wallet proponents to stop being passive and be more vocal.

To Veera Theerapat, financial expert and journalist who is also familiar with government works and mechanisms, digital wallet is as much political as it is economic. He noted during a TV programme that support for and opposition to digital wallet are equally aggressive.

The Council of State actually hinted at legal troubles when talking discreetly about financial discipline. It did not mention the possibility that the prime minister could also have problems with the Bank of Thailand and digital wallet can converge with unrelated troubles with the central bank to form a political tsunami.

“Soon enough, Constitutional Court judges will be very busy,” Veera said. The Bt500 billion borrowing bill will put the government on a long and winding road strewn with booby traps. Even whether it should be called a coupon (which can be used to get only specific goods) rather than money (which can be used to buy anything anywhere) will be fiercely debated.

As the opposition’s leader, Move Forward is virtually obliged to vote against the borrowing bill. Yet arguably its most credible critic of the bill, Sirikanya Tansakun, the party’s candidate for the finance portfolio, has made a strong point which the prime minister will find difficult to rebut: If the bill is really related to economic “emergency”, why not now? Why does the government choose to wait until things could become too late?

She said that there are various kinds of “economic crisis” requiring different fixes. So far, she insisted, the Srettha government has failed to define the current “crisis”, so nobody knows for certainty if it involves lower-than-target export, or extremely-low treasury reserves, or skyrocketing NPLs, or massive unemployment, or currency that is too weak or too strong, or a mixture of some of them. To say that digital wallet would solve an economic crisis is simply not enough, she stated.

By saying so, she joined Veera and many other people in pointing out that there were no technical defense of digital wallet and all the Thai public have heard is the prime minister and maybe three more top government politicians talking vaguely about economic stimulation. The opponents, meanwhile, is an army well equipped with expertise, economic principles backed up by relevant data.

The dilemma is tightening its noose. On the one hand, Pheu Thai is putting its own future and those of allies at risks if it wants to push ahead with the bill. On the other hand, it needs to maintain electoral loyalty at a time when Pita Limjaroenrat, despite legal uncertainties shrouding his future, is far more popular than Paetongtarn Shinawatra, despite what looks like a solodified political status following her appointment as the Pheu Thai leader.

One way to hold on to support base amid the rise of Move Forward, which shares Pheu Thai’s political market, is direct financial handouts. Granted, the Half-Half programme of the Prayut government was generally lauded but it did not quite work electorally, yet Pheu Thai will be in danger of losing everything to Move Forward if it does nothing.

Pheu Thai is no stranger to “populist” programmes and seeking or spending huge amounts of money to please the populace citing poverty or the necessity of funding mega projects. However, critics say it has to keep in mind that its rice

pledging scheme led to a highly-volatile situation when the political environment was far less complicated, with a solidly-united government supported by the grassroots. Although it had not as many legal questions, rice pledging played a big part in the Yingluck government’s downfall, never mind the fact that the biggest trigger was a controversial amnesty bill suspected of being drafted with a hidden agenda.

Pheu Thai is apparently walking into a dead end. Even the Council of State’s carefully-crafted wordings have done little to change the perception that it is doing so virtually alone.

By Tulsathit Taptim