Thai gov't to borrow 68 bln USD to build infrastructure

BANGKOK, March 20 (Xinhua) -- A Thai government proposed draft bill on spending 2 trillion bahts (about 68 billion U.S. dollars) in building infrastructure in the country will soon put before parliamentary screening.

The draft bill, initiated by the leading Phue Thai party, was approved by the cabinet Tuesday. It will be sent to the parliament to debate before being approved.

In the draft bill, approved by the cabinet, the 68 billion dollars budget will be spent in the government's three strategies: shifting Thailand's logistics from road to rail systems, linking the center of each region to neighboring countries and building infrastructure to serve main economic areas in the provinces.

Finance Minister Kittiratt Na-Ranong admitted Tuesday that the loans, which will be sought from domestic and international financial sources, will put Thailand's public debt at less than 50 percent of gross domestic product (GDP), a level that will not harm fiscal discipline. Repayment is planned over 50 years.

Kittirat said he was sure that the government can repay the debts before 50 years since the mega-projects could boost the Thai economy in the long run. He added that the investment will boost GDP by 1 percent a year on top of estimated annual economic growth of around 5-6 percent and create about 500,000 jobs.

"The infrastructure and assets funded by the loans, however, will exist for the country for some 100 years," Bangkok Post quoted the finance minister as saying.

The finance minister insisted the government needs to borrow because the annual budget is not sufficient to fund the mega- projects while Thailand has lacked massive investments in infrastructure for many years.

Prime Minister Yingluck Shinawatra confirmed that strict regulations and follow-up committees will ensure transparency in the huge spending. She added the spending would create national assets including high-speed trains and roads.

Meanwhile, a poll by Bangkok University conducted recently showed only 25 percent of 60 economists preferred the borrowing law to conventional financing. Another 22 percent indicated they had no worries about the public debt issue, saying the current debt ratio remains low and that investment would create jobs and enhance the country's competitiveness.

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