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Published on February 11, 2008

Under pressure to fulfil pre-election promises made to party supporters, the Samak government has announced plans to implement a wide range of populist policies similar to those that were so expertly exploited by the now-defunct Thai Rak Thai Party to grasp political power and maintain loyalty. The new government is losing no time assuring the public that it intends to make good on most, if not all, of its promises, which include some utterly ludicrous ones that would require a huge amount of taxpayers' money without any evidence that they would benefit the general public.

Even before the six-party coalition government led by the People Power Party presents its policy statement to the House of Representatives, ministers have already mentioned programmes such as debt suspension for farmers, village funds and a host of mega-projects related to urban infrastructure development, particularly the expansion of rail-based mass-transit systems in Bangkok and its environs. Other quick-fix programmes that have proven popular among the rural masses, including low-cost computers for schools, student loans and scholarships for poor students upcountry, will also be on the Samak government's agenda.

Finance Minister Surapong Suebwonglee said such populist policies, designed to promote domestic private consumption and boost public investment, were justified. The government aims not only to restore foreign investors' confidence in Thailand but also to ratchet up the country's economic growth.

To be fair, not all of the so-called populist policies are inherently bad. Depending on public perception and how they are put into practice, some policies may have started out as populist, but then went on to become accepted by the general public. The universal healthcare scheme promoted by Thai Rak Thai prior to the 2001 general election is an obvious example of a populist policy that has become accepted by mainstream society. The truth is that Thaksin relied heavily on the good work done by public health planners, who had spent years working in the background to devise sound financing arrangements to ensure the sustainability of providing healthcare for all. Thaksin's reliance on the meticulous planning of public health planners is the reason why the universal healthcare scheme is the exception to the rule among Thaksin's numerous populist policies.

The Samak government must learn from the mistakes made during Thaksin's term that had to do with other, more damaging populist policies, of which there were many. The telltale signs of these types of policies include the half-baked nature of their conception, their obvious aim to cater to the unprincipled wants and needs of the people, and the absence of a realistic source of funding.

The reason manipulative governments, such as the Thaksin administration and now the Samak government, are likely to initially get away with introducing these types of policies, which fly in the face of the government's duty to provide the country with sound economic stewardship, fiscal discipline and public accountability, is because the quality of public debate in this country has remained poor.

Conspicuously absent from the ruling party's platform has been any sort of discussion on fiscal discipline, sources of funding and the huge impact that past populist policies have had on the country's long-term financial liability.

One of the ways that governments hide the downside of populist policies is to sweep the rubbish under the rug by forcing state-owned banks to lend or underwrite debts to finance them. This hurts not only the shareholders of those banks, but it also sets a negative precedent that tends to increase loan risks and raise banks' operating costs.

Sooner or later, the unthinking spending of taxpayers' money will begin to contribute to a looming public debt that must somehow be paid for either by the current generation of taxpayers or those in the future. The level of public debt incurred by populist policies can be kept manageable so long as the country's economy keeps growing.

Just after the interim Surayud government attempted to clean up the financial mess left behind by Thaksin, the Samak administration steps forward planning to unleash another wave of copycat populist policies. The new government must proceed carefully with its populist policies based on a careful cost-benefit analysis, with the long-term interests of the public foremost in mind.

The Nation