Image credits - CNA
Prime Minister Srettha Thavisin’s ambitious plan to revive Thailand’s sluggish economy through a massive $14.3 billion handout scheme has suffered a major setback, with the launch now postponed beyond May. The controversial “digital wallet” program, touted as a lifeline for millions of Thais, has been plagued by concerns over funding and practicality, forcing the government to pump the brakes on its rollout.
Originally slated for February, the program was first shifted to May to address logistical challenges. However, even that revised timeline appears untenable, Deputy Finance Minister Julapun Amornvivat conceded on Wednesday. “Today, looking at the timeframe, it’s unlikely for May,” she admitted, without offering any concrete alternative date.
This latest delay casts a shadow over Prime Minister Thavisin’s flagship economic policy, one he has passionately championed as a means to stimulate domestic spending and combat rising poverty. The program, dubbed “Rao Rak Kan” (We Care for You), proposes transferring 10,000 baht (approximately $285) to each of 50 million Thais, totalling a staggering $14.3 billion in direct handouts. The digital wallets, accessible through a mobile app, would be restricted to spending at local businesses, aiming to inject cash directly into Thailand’s grassroots economy.
While the government maintains its commitment to the scheme, Julapun’s candid admission of lacking a backup plan in case of further delays raises eyebrows. Experts and critics have already voiced concerns about the program’s feasibility, questioning its funding mechanism and potential impact on inflation.
The “cascaded borrowing” structure outlined by the government, involving loans from state-owned enterprises and financial institutions, has fueled concerns about fiscal irresponsibility. Critics argue that such borrowing could burden future generations with debt and exacerbate Thailand’s already elevated public debt ratio.
Furthermore, the digital wallet concept itself faces logistical hurdles. Millions of Thais, particularly in rural areas, lack access to smartphones or reliable internet connectivity, raising questions about their ability to participate in the program. Concerns also linger regarding potential technical glitches and cybersecurity risks associated with handling such a large volume of digital transactions.
Beyond the logistical and financial challenges, the scheme’s potential inflationary impact is another major concern. With 50 million Thais suddenly receiving a financial windfall, analysts warn of increased demand for goods and services, potentially driving up prices and negating the intended economic boost.
The program’s delay leaves many Thais, struggling with rising costs of living and economic uncertainty, hanging in the balance. While the government continues to assure the public of its commitment to “Rao Rak Kan,” the mounting concerns and lack of a concrete timeline cast a cloud of doubt over the scheme’s ultimate success.
As economists and analysts dissect the complexities of the program, and Prime Minister Thavisin faces mounting pressure to deliver on his economic promises, the fate of Thailand’s $14.3 billion handout scheme remains teetering in the balance.
Positive Impacts:
- Short-term economic boost: If successfully implemented, the scheme could inject a significant amount of money into the local economy, leading to increased consumer spending and potentially spurring economic growth. This could benefit small businesses and local communities, particularly in rural areas.
- Reduced poverty and inequality: By directly transferring cash to millions of Thais, the program could alleviate poverty and reduce income inequality. This could lead to improved living standards, increased access to education and healthcare, and a more inclusive economy.
- Increased confidence and consumer sentiment: The scheme could boost consumer confidence and optimism, encouraging Thais to spend more and invest in the economy. This positive sentiment could further contribute to economic growth.
- Digital economy expansion: The program’s reliance on digital wallets could accelerate Thailand’s transition towards a more digital economy. This could benefit various sectors, such as e-commerce, fintech, and telecommunications.