Published on October 31, 2007
Finance Minister Chalongphob Sussangkarn has abandoned his plan to resubmit the revised draft of controversial amendments to the Currency Act to the National Legislation Assembly (NLA).
He will instead leave it for consideration by the next government.
However, the Cabinet approved draft amendments to the Frequency Allocation Act providing for the establishment of a single telecom and broadcasting regulator to be called the National Broadcasting and Telecommunications Commission. The draft will be forwarded for NLA consideration.
After yesterday's Cabinet meeting, Chalongphob said he had given up his effort to push the amendments to the NLA, in order to reduce conflicts within society.
"The issue has been politicised," he lamented.
Bank of Thailand (BOT) Governor Tarisa Watanagase said it was okay if the draft could not be approved during this government's term, because it was a big issue that required thorough discussion.
Prime Minister Surayud Chulanont has asked the Finance Ministry to organise another public hearing before resubmitting the draft for Cabinet consideration. He said he did not want the Currency Act issue to cause public conflict with the election drawing near.
Many people no longer trust the central bank, because it made a big mistake in defending the baht and triggering the 1997 economic crisis, he said.
Chalongphob said he wanted the new government and the BOT to create a better public understanding of the issue.
"Then the country can move forward," he said.
However, he said even though the draft was not approved, the BOT would still be able to manage international reserves efficiently and cope with the current volatility of the global market.
Last week, Chalongphob insisted he would resubmit the draft amendments to the Cabinet for a third time after twice withdrawing them from the NLA.
The amendments would allow the central bank greater flexibility in managing the country's international reserves, which currently amount to US$80 billion (Bt2.72 trillion).
The BOT wants the Currency Act amended so it can improve the management of its resources and change the way it accounts for its activities. However, critics and followers of revered monk Luangtha Maha Bua strongly opposed the move.
They argue the central bank would take excessive risks that could deplete Thailand's international reserves in a fashion similar to its actions prior to the 1997 crisis.
The Finance Ministry believes the amendment could also allow the government to use the country's international reserves to repay the debts of the Financial Institutions Development Fund (FIDF), incurred when it bailed out the banking system after the 1997 crisis. The fund's remaining debt is about Bt1 trillion.
Without the amendments to the Currency Act, the FIDF's huge debts remain unsettled.
As for draft amendments to the Frequency Allocation Act that provide for the establishment of a single telecom and broadcasting regulator to be called the National Broadcasting and Telecommunica-tions Commission, they will be forwarded for NLA consideration.
The proposed amendments, initiated by the NLA's science and communications panel, comply with Article 47 of the new Constitution, which provides for the creation of one state telecom and broadcasting regulatory body.
Currently, Thailand has a National Telecommunications Commission, but its sister organisation, the National Broadcasting Commission, was never successfully formed.
In 2005, the Central Administrative Court nullified the process of selecting 14 candidates for seven seats on the broadcasting commission, ruling that the process was unconstitutional.
The draft amendments stipulate the proposed broadcasting and telecommunications commission will consist of nine commissioners: three representing the broadcasting industry and three the telecommunications industry, plus a legal representative, an economist and a consumer-protection advocate.
The proposed commission's main roles will be creating a frequency-management plan, allocating telecommunications and broadcasting spectra, defining types of telecom and broadcasting businesses, issuing licences and determining interconnection regulations.