THAILAND’S parliament will put to vote an initial draft of the $93 billion annual budget on Thursday, posing a key test to coup-leader-turned Prime Minister Prayuth Chan-Ocha whose ruling coalition is coming under some strain from internal divisions.
The fate of the budget hangs in balance as some smaller parties try to extract concessions and distance themselves from Prayuth’s government, which has struggled to revive the pandemic-battered economy ahead of elections that must be called by March next year.
About three dozen lawmakers, including those from a party joined by a breakaway faction of the ruling Palang Pracharat Party, are keeping their options open on the vote. Coalition managers are now working overtime to ensure the passage of the 3.19 trillion baht ($93 billion) budget plan for the year starting Oct. 1, which also includes a deficit of 695 billion baht.
“The noises from the different factions are just to push for more budget for their groups so they could mobilize votes for the next election, rather than a real effort to bring down the government,” said Titipol Phakdeewanich, dean of the political science faculty at Ubon Ratchathani University.
In the unlikely event the house votes down the budget bill, Prayuth may be forced to resign or call an early election. Tim Leelahaphan, a Bangkok-based economist at Standard Chartered Plc, said the risk was low and “political noise is likely to rise in the second half as pre-election activity begins.”
The opposition has also joined the fray and is targeting Prayuth for taking on more debt to finance routine expenses as opposed to investing in projects that can create long-term benefits for the economy. They also worry the ruling parties will use the money to promote projects that will benefit them electorally.
“Allowing this budget to pass will create a crisis for the next government,” Chonlanan Srikaew, the opposition leader and head of the Pheu Thai party, told the parliament. “This budget will be a trap. This government will leave a debt legacy — public debt, household debt and bad debt.”
Prayuth has defended the budget, saying the proposals are meant to support the post-pandemic economic and social recovery. A large deficit financing is needed again as Southeast Asia’s second-largest economy continues to face threats from a volatile global financial and economic system, he said.
Thailand is set to post the slowest pace of growth in the region this year as it still grapples with the devastating impact of the pandemic on its tourism industry and high inflation. Its public debt has ballooned to about 61% of the gross domestic product from about 41% before the pandemic as it borrowed about 1.5 trillion baht to fund Covid stimulus measures.
Even if the budget passes the parliament hurdle, the path ahead is rocky. Opposition parties are planning a no-confidence motion later this month to expose what they say is the government’s alleged mismanagement of the economy, failure to contain soaring prices and inadequate pandemic relief measures.
The government will survive the budget debate and any no-confidence motion as it has the support to stay in office until the end of its term next year, according to Deputy Prime Minister Prawit Wongsuwan.
“With the infighting in the ruling coalition and the opposition’s growing threats of “no” votes, we think the political developments warrant close monitoring in coming months,” Nomura Holdings Inc. analysts Charnon Boonnuch and Euben Paracuelles said in a note. “The government’s sharply falling popularity also suggests a highly uncertain outcome at the upcoming elections.” — Bloomberg