Danucha Pichayanan, 50, became the new secretary-general of the National Economic and Social Development Council (NESDC) on Oct 1. His predecessor, Thosaporn Sirisamphand, retired on the first day of fiscal 2021.
Mr Danucha says the pandemic is completely different than any crisis he has seen in his 24 years at NESDC. (Photo by Chanat Katanyu)
Mr Danucha, who holds a master's degree from George Washington University in the US, has worked for the prestigious state planning agency since 1997, making his way over a span of nine prime ministers.
The Bangkok Post sat down for an exclusive interview with the new secretary-general about his new, heftier responsibility during a pandemic that has battered the economy and tourism.
What are the challenges for the secretary-general of NESDC amid a global economic crisis caused by the pandemic?
Working at NESDC, which is a secretariat office of the Centre for Economic Situation Administration (CESA), during this time is very challenging. This virus crisis differs completely from the Asian financial crisis in 1997 and the subprime crisis in 2008-09 because they affected only some business sectors. Thailand made it through the 1997 crisis because of high export growth driven by baht depreciation.
For the economic crisis in 2008-09 that spread across the US and Europe, the Thai government implemented stimulus measures to spur domestic consumption and keep the country afloat.
This pandemic has affected most nations in the world and there seems to be no foreseeable end to it. Many countries have announced a second round of lockdown measures to curb the contagion, as a second wave was reported in some and there is a possibility of a third wave.
Fortunately, Thailand is a food supplier to the world and still has income thanks to higher demand for food from trading partners.
The tourism sector, which accounts for 18% of GDP, looks to be in for a rough time because of a sharp and frenetic plunge, both for foreign and domestic tourists. The pandemic has caused the economy to crater in terms of exports and domestic consumption.
The country's lockdown measures and a sharp fall in foreign visitors can be blamed for the 12.2% GDP contraction in the second quarter.
However, in the third quarter we are likely to register a smaller contraction than the second quarter because the latest statistics have shown improving trends for the economy.
The agency is keeping a close watch on the economy in the third quarter.
The NESDC reported to CESA statistics indicating improvements in August after the relaxation of lockdown measures.
Private investment shrank by 4.6% in August, slightly improving from contractions of 7.5% and 10% in July and June, respectively, while private consumption dropped by 1.1% in August, compared with contractions of 0.1% and 4.5% in July and June, respectively.
Exports declined by 8.2% in August after falling 11.9% in July and 24.6% in June.
Agricultural production rose by 7.7% in August, up from a 2% rise in July and against a contraction of 4.5% in June.
Farm income contracted by 2.6% in August, improving from 3% and 3.9% contractions in July and June, respectively.
The manufacturing production index contracted by 9.3% in August, improving from contractions of 12.9% and 17.8% in July and June, respectively.
The hotel occupancy rate was 26.9% in August, up from 25.4% in July, 13.4% in June, and 3.8% in May.
Despite these small improvements, there has not yet been a recovery in foreign visitor arrivals.
The number of workers who claimed unemployment compensation from the Social Security Fund under Section 75 of the law totalled 79,000 in September, improving from 176,000 in August and 275,000 in July.
How should the government tackle rising debts?
The agency is closely monitoring household debt, which accounted for 83.8% of the GDP in the second quarter, up from 80.2% in the first quarter. The proportion of non-performing loans to total loans was 3.08% in the second quarter, up from 3.04% in the first quarter, while public debt made up 44.8% of GDP in the second quarter, up from 41.7% in the first quarter.
The government is also monitoring small and medium enterprises' (SMEs) debts because their debt holidays will end in October and November.
On Oct 7, Prime Minister Prayut Chan-o-cha ordered related agencies at CESA meeting to seek solutions for SME debts.
The next CESA meeting, to be chaired by Deputy Prime Minister Supattanapong Punmeechaow is scheduled for today, with representatives from the NESDC, the Bank of Thailand, three private sector associations, the Federation of Thai SMEs and the Federation of Thai Capital Market Organizations participating.
As an initial solution, Mr Supattanapong wants commercial banks to speed up implementing debt restructuring programmes, especially among their debtors who have the potential to continue operations and extend their debt holiday period. The central bank may consider implementing additional measures for SMEs.
The government also needs to seek an appropriate solution to the request for soft loans from airlines and tour operators.
CESA will consider petitions from the private sector such as a car trade-in scheme worth 100,000 baht for individual car owners who can use the expense to reduce income tax. The scheme would be applicable only to owners of cars older than 10 years, or to those who purchase electrical vehicles.
What is the progress of the state's 400-billion-baht spending plan for social and economic rehabilitation?
A budget allocation of 92.4 billion baht was approved by the cabinet in July for the first phase of the 400-billion spending plan, aimed at creating 410,000 jobs.
The cabinet already approved 45.1 billion baht to finance 69 projects in the first phase, with the remaining 47.3 billion scheduled for cabinet approval possibly this month. Of the remaining funds in the first phase, the agency is about to propose to the cabinet approval of 20 billion baht for the National Village and Urban Community Fund Office to implement community tourism projects and promote domestic tourism.
The second phase worth 120-130 billion baht is about to be tabled for the cabinet to approve.
This new phase will focus on water resource development, community road construction, Otop and community product promotion, and upskilling and reskilling programmes for workers in the automotive, digital, automation and other targeted industries.
The agency expects to approve projects for the second phase in early November and December.
What is the role of the agency in monitoring and evaluating the progress of planned infrastructure development and regional development projects?
The agency monitors planned infrastructure development projects made both through state investment and state-owned enterprises. CESA has established a working panel to monitor infrastructure development projects.
The Southern Economic Corridor and other similar regional developments will move ahead, but most projects remain at the stage of a feasibility study.
The government has budgeted 18 million baht in fiscal 2021 for the NESDC to conduct public hearings and feasibility studies for the so-called Thai Canal, which would run from Krabi on the Andaman Sea to Trang, stretching to Nakhon Si Thammarat and Songkhla, next to the Gulf of Thailand.
The agency is expected to take about 10 months for hearings and studies on the project.
