IN A RARE MOVE, former World Trade Organisation chief Supachai Panitchpakdi yesterday criticised the Thai government on many big issues ranging from falling private investment to a potential bubble in the property market, and hinted that he frowned on the submarine-purchase deal.
He also urged caution on China’s One Belt, One Road initiative.
In an interview to a group of reporters on the sidelines of a seminar hosted by the Neighbouring Countries Economic Development Cooperation Agency (NEDA), Supachai urged the government to tell the Thai public the truth about the current state of the economy.
“Politically the government wants to project good news in order to win the people’s confidence, but the government needs to tell the truth,” said Supachai, who was director-general of the WTO from 2002 to 2005. He was also secretary-general of the United Nations Conference on Trade and Development (Unctad) from 2005 to 2013.
He said he was concerned about declining private investment in Thailand. He said listed companies were paying high dividends to shareholders but were not investing in building up their research and development capacity.
His comments came after the National Economic and Social Development Board revealed that private investment had contracted by 1.1 per cent in the first quarter of this year.
Foreign direct investment in Thailand has also been declining for several years, Supachai said.
He also expressed concern about a potential bubble in the property sector.
When the private sector invests too much in only one sector there could be the risk of an oversupply of residential units, he warned.
Lower interest rates may be a major cause of over-investment in the property sector while at the same time household debt remains high against less saving, he said.
‘Build roads, not arsenals’
Supachai also said he was concerned about an escalating global arms race, with many countries including Thailand spending vast amounts of money on weaponry and military hardware.
“Not just Thailand, but the richer countries are buying more arms,” he told an audience at NEDA’s seminar. Thailand is in the process of purchasing submarines from China, a costly move that has sparked controversy, although Supachai made no direct reference to that deal.
Supachai said he strongly supported NEDA projects in Laos, Cambodia, Myanmar, Vietnam, Sri Lanka, Bhutan and East Timor. Development projects such as the building of roads benefit many people, he said.
One Belt, One Road caution
As the Thai government is upbeat about China’s New Silk Road project, Supachai said Thailand and other Asean countries were likely to benefit from the initiative but should not just stand back and let Beijing set the agenda.
“I don’t like ‘big brothers’, whether they are Chinese or American, in the region,” he said. He suggested that the Thai government strengthen cooperation under the Regional Comprehensive Economic Partnership, which comprises Asean and many other countries including Australia, Japan, India, New Zealand and South Korea. Where RCEP and China have common interests, then cooperation with Beijing should go ahead, he said.
He noted that the old Silk Road was not only about trade but also had cultural dimensions, so countries should also emphasise cultural cooperation under OBOR, which could lessen the tensions in the South China Sea.
China has been promoting the Belt and Road Initiative as a way to connect many countries via trade and investment. It held a summit on the project recently.