Thaksin Pitches Strategy to Rescue Thailand From Debt Trap

(Bloomberg) — Thailand needs to urgently tackle its high levels of household and public debt, and focus on policies that can propel the country’s growth rate to match some of its Southeast Asian neighbors, according to former prime minister Thaksin Shinawatra.
A debt restructuring initiative to cover the households and businesses should be undertaken as “Thailand and its people are trapped in debt,” the two-time premier and father of newly elected leader Paetongtarn Shinawatra said Thursday in a talk titled “Vision for Thailand.”   
The finance minister and others should take the lead in addressing the chronic debt burden along with the central bank, Thaksin, seen as the de facto chief of the ruling Pheu Thai Party, told a gathering of more than 1,400 bankers, business executives and politicians in Bangkok. The event marked the first anniversary of Thaksin’s dramatic return to Thailand from a self-imposed exile after he fled corruption charges in 2008. 
While Thaksin is unlikely to assume any official or political position in the new government, he’s expected to wield considerable influence on Paetongtarn administration’s policies. A popular and polarizing figure in Thai politics for over two decades, his years in power saw populist policies dubbed as “Thaksinomics” to drive economic growth. He introduced a debt moratorium for farmers, fuel and electricity subsidies and a universal healthcare scheme that propelled annual growth rate to above 5%.
Paetongtarn, who is still in the process of finalizing her cabinet, faces the challenge of reviving an economy stifled by a near record-house hold debt, sluggish exports and the high cost of living. While her predecessor Srettha Thavisin pushed ahead with a $14 billion cash handout to shore up growth from a decade of average sub-2% growth, she’s ordered a review of the payout amid concerns of legal challenges to the controversial plan.
Thailand’s household debt has soared to almost 91% of the nation’s gross domestic product and has been seen as one reason behind the central bank’s reluctance to reduce interest from a decade high 2.5%. As the key rate remains high, a reduction in the bailout fee paid by commercial banks may be explored to ease the burden on those struggling with car and housing loans, Thaksin said. 
The billionaire politician said the government should respect the central bank’s independence and opt for more talks with it on lowering interest rates. He said greater coordination between fiscal and monetary policymakers was needed to address Thailand’s economic problems. 
Paetongtarn’s government plans to tweak the so-called digital wallet program and focus on providing financial relief first to the fragile groups in the society, Thaksin said. The new administration may give 10,000 baht ($289) each to about 14.5 million people, including 1 million disabled, in September before taking a call on extending the benefit to another 30 million, he said. 
“We’re in capitalism whether we like it or not,” Thaksin said. “But without empathy for those without economic power, we will be crippled.”
Thaksin defended Pheu Thai’s coalition with a clutch of establishment parties to form the government last year, and said Paetongtarn’s new administration will be stable and help the party emerge once again as the largest group in the next election due in 2027.
Paetongtarn was chosen as the premier after the country’s Constitutional Court dismissed Srettha in an ethics violation case, cutting his time in office to only less than a year. Srettha’s elevation as the premier was seen as part of a deal that Thaksin cut with the royalist establishment to help pro-military and conservative parties stay in power and pave the way for his return.
What to Know About Thailand’s Youngest Prime Minister: QuickTake
On Thursday, Thaksin denied there was any deal with the establishment, and said the constitution should be amended to return Thailand to true democracy and vest parliament with the sole power to appoint and dismiss a government. He also called for steps to end judicial overreach.
Thaksin’s Other Remarks…
On the economy: “I think the Thai economy hasn’t hit the bottom yet but it’s unlikely to slide any further. The government has done many things and that will help control the situation. The government needs to take the lead and the private sector should also help.”
On interest rates & BOT: 
On legalizing casinos: 
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