"What will happen next year? Good luck to the next finance minister," Finance Minister Thanong Bidaya told a meeting of University of Southern California alumni at the Foreign Correspondents Club of Thailand this week.

He explained that putting back the general election until October would delay the passage of vital fiscal legislation for nearly a year, possibly causing untold damage to the economy.

"This delay will hurt the business community. I pray they [his successors] know what they are doing."

Despite the economy being in a relatively strong position, Thanong said it faced a sharp downturn, largely because of high interest rates, the inflated value of the baht and the political crisis, which was deterring foreign investors.

"I have been to Japan and the feedback is not promising. They don't understand what is happening with the political crisis," he said.

"They are very nervous: if they see a wave, they think it's a tsunami. We have a very strong economy with high consumption but investment has been declining every month."

Thanong, speaking before the Bank of Thailand's monetary policy commission decided to raise interest rates, accused the central bank of endangering the nation's economic growth.

He said his ministry officials had repeatedly told the central bank that high interest rates were hurting businesses, mortgage borrowers and consumer confidence, when coupled with the rising fuel prices and the high baht value.

The effects of the rate hikes were yet to hit home, he warned, as economic growth has remained high.

Thanong defended caretaker Prime Minister Thaksin Shinawatra, claiming the controversial politician had worked harder than anyone in Thailand's democratic history.

"He spends all his time flying around the world on Thailand's behalf, working hard.

Thaksin's so-called populist policies to help the rural poor also met with Thanong's approval.

"Helping the poor is the cheapest way of helping the country."

He claimed that Bt200 billion invested in helping the rural poor would benefit the entire nation through higher consumption and increased productivity.

Thanong said the effects of rising oil prices would be reduced in the long term with the introduction of 2,000 gas-driven public buses.

William Baldwin

 The Nation