Bangkok (The Nation/ANN) - Experts have urged the Thai government to rethink its interest rate policy, public investment, production, services, consumption and social welfare if the country has to achieve a green and sustainably growing economy.
The Finance Ministry is preparing to introduce carbon and environment taxes.
Kosit Panpiumras executive chairman of Bangkok Bank, yesterday called for a rethink of the interest rate policy and public investment. "It may not be fair if the rate policy serves only investment incentives," he said at the annual conference hosted by the National Economic and Social Development Board (NESDB), a state think tank.
He pointed out that as the country is entering an ageing society, the financial burden would also increase.
"The interest should be high enough to provide support for the elderly who bank on their savings," he said.
The interest rate should not be too close to or below inflation rate, he said, referring to the current low interest policy.
The NESDB estimates that in the next 30 years the number of the elderly population will increase from 14.2 per cent of total population today to 26.6 per cent of the population in the next three decades.
Currently the ratio of the elderly-to-work force is 1:5, then it will reduce to 1:2, he said. The cost of taking care of the elderly will increase significantly.
"With the lower number of children, estimated to be 8 million over the next 30 years, we have to think about the quality of the people," he said.
The number of children will drop from 19.1 per cent to 14.8 per cent of total population in the next 30 years. The total population will drop from 64.36 million this year to 63.87 million in 2040, he said.
In the past, development focused on mobilising more workforce but that won't be viable as the country enters an ageing society, he warned.
He also attacked the government plan to invest Bt2.2 trillion over the next six to seven years as the plan largely give priority to size of projects not quality, he said.
The government should invest more in education instead of investing only in physical infrastructure like roads, rail and airports, he suggested.
Somchai Jitsuchon, research director at the Thailand Development Research Institute, said the government was spending only Bt83 billion a year on social welfare for the poor. It was not much money compared to the rice-pledging budget of over Bt100 billion, he said.
If the government gives welfare to targeted groups, such a fund will be adequate to help those who are in need, he said, whereas a large part of the rice-pledging scheme ends up in the hand of rich farmers, he lamented.
NESDB secretary-general Arkhom Termpittayapaisith said that Thailand ranked 24th among the biggest carbon-dioxide emitters in the world but the country is the most polluted among Asean nations due to the large industrial base here.
He suggested that the public and the business sector have to rethink about ways of production, service and consumption. Each year, garbage is about 16 million tonnes and the country can recycle only 20 per cent of this, far short of the targeted 35 per cent targeted, said Arkhom.
Meanwhile, the Finance Ministry is looking at excise tax reforms for automobiles, with the aim of cutting emissions, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said.
The government will allow carmarkers to adjust themselves in three or four years. The new tax rates will depend on how much carbon each car model emits, and will not be based only on horsepower as is done now, he said.
Cars emitting lesser carbon than others will be subjected to lower tax rates, he said. Currently, some large cars emit lower carbon than some small cars, but they are still taxed higher, he said.
The government will also provide additional incentives to motor bikes powered by electricity as the zero tax rate does not encourage consumers to use more electrical motor bikes, he said. As there are no gas stations they could provide electricity charging facility for motor bikes, so tax incentives does not work, he said.
The Finance Ministry is also currently consulting other state agencies to introduce environment taxes in order to achieve a green economy, he added.
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