Executive Summary

The onset of the economic crisis in 1997 has propelled the Ministry of Finance to accelerate fiscal, financial and macroeconomic strategies coupled with role adjustment of the state through support of economic policies that are lucid and in tandem with government policies in a resolute and uninterrupted manner. In the end, Thailand was able to emerge from the crisis with economic expansions and is progressing towards challenges that lie ahead.

In order for Thailand to maintain its strengths and to steer the economic engine through the future waves with sustainability, MOF has instructed a clear vision that it intends to be:

“The Ministry that builds on fiscal and financial sustainability, maintain economic status, ensure sustainable economic and social development so to increase the country’s competitiveness and to increase the benefits of Thai citizens”.

In order to thrust the economy (2004-2008) forward, four main strategies have been formulated as follows:

Strategy 1: Development of fiscal sustainability

The MOF shall perform the following tasks:

1. To adjust tax base and to monitor tax collection of those outside taxing system for complete coverage and equitable purposes as well as to create sustainable revenues for the government and to reform tax system for enhancement of industrial sectors and exports.
2. To create an integrated plan for utilization of government properties and to promote a plan of asset capitalization for social benefits and grass-root citizens.
3. To revise the nation’s role from being a net debtor into a net lender for various countries while undergoing public debt management under low cost of capital with appropriate risk and to adopt sound public debt management strategy for budgetary and non-budgetary disbursement.
4. To promote state-owned enterprises (SOEs) to undergo transformation into private entities with professional management, and to allow private sector to partake in management and become owners of those enterprises.

Strategy 2: Strengthen the financial system to delimit possibilities of further economic crisis

The MOF shall perform the following tasks:

1. To establish measurements for an integrated and dynamic financial system and to eliminate financial transactions outside the system.
2. To assign special financial institutions^[1] to comply by Public Service Account (PSA) and to install monitoring system and analysis of special financial institutions.
3. To strengthen bond market through consistent issuance of government bond alongside development of Asian Bond market.
4. To foster equity market by boosting efficient demand and supply in the market while, at the same time, broaden derivatives market and amend Securities and Exchange Act for sustainable development of equity market.

Strategy 3: Sustainable socio-economic development

The MOF shall perform the following tasks:

1. To extend the capability of small and medium enterprises (SMEs) and community-based enterprises in order to build on the strength and competitiveness of the country.
2. To undergo structural reform on government revenue and increase the ability of revenue collection and fiscal management of local administrations.
3. To step up environmental tax measures; to provide social safety nets; and to create opportunities for households, grass-root businesses, and SMEs in order to obtain access to capital.
4. To establish mid-year budgetary expenditure for fiscal year 2004 to stimulate investment in basic infrastructure and accommodate economic expansion.
5. To coordinate and determine fiscal policy, monetary policy, exchange rates policy, and interest rates policy to create economic stability.
6. To integrate policies under the MOF and to facilitate fiscal database so to satisfy the demands of other related agencies.
7. To enhance the monitoring system and warning system for the economy as well as reporting economic movements to the public via the website http://www.thailandoutlook.com/
8. To position Thailand as a leader at regional and international forums and to establish fiscal partnerships for sustainable economic development and to upgrade the Economic Assistance Fund for Neighboring Countries to become Public Company within 6 months.
9. To generate government CFOs as means to assist government CEOs of respective regional government offices in accomplishing various tasks which, in hindsight, is to install progress and prosperity into regional areas.

Strategy 4: Modify the management system of MOF to become more efficient, advanced, and operate with greater transparency

The MOF shall perform the following tasks:

1. To adjust the structure of MOF and to heighten the standard of MOF into knowledge-based institution to ensure that capability of personnel is widely accepted and to raise the effectiveness of public services.
2. To facilitate and speed up the services for taxpayers.
3. To emphasize on transparency of the budget disbursement and procurement management.
4. To develop the finest fiscal and economic database in Thailand and to operate as the chief economic information provider for Prime Minister Operation Center (PMOC)^[2]
5. To inspect and evaluate public sector’s performance in order to install warning system for government administration, an important task that still lacks responsible agency.

With this firm strategy alongside tangible and clear indicators, the MOF is adamant that within 5 years, Thai citizens will witness the following economic progress:

• Thai economy shall expand at least 6.5% per year.

• GDP per head will increase from US$ 2,300 to US$ 3,700 by the year 2008.

• Current Account will be in surplus.

• Inflation shall not exceed 2.5%.

• Problems of economic bubbles in property sector and equity market will not occur.

• Thailand’s competitiveness ranking will surpass the rankings prior to crisis in 1997.

• Income distribution will be improved.

• Population under the poverty line will be eliminated by the year 2008.