This audio is generated by an AI tool.
This audio is generated by an AI tool.
BANGKOK: Thailand was in the very final stretches of the wet season in late 2011 when the levees broke. Bangkok was exposed to a rush of floodwaters from the north, a deluge that would engulf the capital and impact an estimated 13.6 million people.
Countless homes, vehicles, businesses and fields were left in ruin. For some victims, it would take years to recover.
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MONEY IN THE HANDS OF THE PEOPLE
It was not always like this for Thailand. While household debt had been elevated in the past, it hovered around a much more manageable 60 per cent before the “flood of a century”.
But it was a “coincidence” that the major shock of the flood occurred during a period of political populism and spending policies that resulted in runaway debt levels, Sommarat said.
The prime minister at the time was Yingluck Shinawatra, the sister of political doyen and former leader Thaksin Shinawatra who was in power from 2001 to 2006 before his removal from office by a military coup.
Yingluck initiated the First Car Buyer policy just months before the flood. It was an initiative that offered tax rebates of up to 100,000 baht (US$3,300) for first-time buyers of new passenger vehicles.
The intention was to encourage car ownership and borrowing while stimulating the economy, especially Thailand’s critical automotive industry. By the time it ended in 2016, about 1.1 million cars had been sold under the scheme and household debt had reached record levels.
“Giving money into the hands of the people” had become a political tool under both Thaksin and Yingluck, explained Pavida Pananond, a professor of international business at Thammasat University.
Since then, she said, governments of all persuasions have largely maintained a similar approach to spending, consumption and stimulus.
“That's one of the key structural issues in the political sense, that we haven't had political parties really looking at the structural problems of Thailand,” she said.
Political instability has continued to plague Thailand ever since Yingluck too was removed from office in 2014. While other countries may have designed economic plans to manage debt, Thailand has largely failed to do that, she said.
“We have been too bogged down by political conflicts to the point where the idea of having to sit and think through what kind of economic visions we need has been missing over the past two decades.”
