Charoen Pokphand Group, the country’s largest agro-business conglomerate, said yesterday that it stood ready to increase minimum wages to Bt300 and new graduates’ salaries to Bt15,000 in line with the incoming government’s policy pledges, in order to drive the country’s growth and domestic consumption.
The company also suggested the new government should seriously invest in infrastructure development as well as in research and development, revamp the tax structure, and increase efficiency of the management of the Kingdom’s assets so as to ensure competitiveness and maximise benefits from investment.
Suparut Kawatkul, CP Group’s vice chairman, Finance and Investment Committee, said Thailand should no longer rely on low wages, as such a policy had dampened the country’s growth for too long.
“The economy has grown at a low rate due to low investment and low returns from the agricultural sector, and has relied more on exports. The country should focus more on attracting new investment and boosting the domestic economy, in particular the farming sector as it involves a major part of the population,” he said.
He added that minimum wages had increased slowly over the past 20 years. For instance, from 1997-2010, the daily minimum wage rose 1.31-fold from Bt157 to Bt206 per worker, while inflation rose 1.42-fold, and the average income per capita went up 1.92-fold.
The figures show that Thai labourers’ incomes are too low when compared with other workers and the overall economy. This has created a social problem and a widening of the gap between those in the lower and upper classes, Suparut said.
Meanwhile, the Kingdom’s revenue proportion from the farming sector dropped from 20 per cent in 1980 to 8 per cent last year. The sector employs more than 16.95 million workers, accounting for 43 per cent of overall employment.
Despite these numbers, the agricultural sector has been subject to low development in the past several years, he said.
To boost the country’s growth, he said the new government should focus more on increasing farm sector incomes, in particular in terms of crop values, research and development, irrigation systems and logistics development.
Currently, only 0.25 per cent of the country’s gross domestic product is allocated for R&D, which is very low when compared with countries such as Malaysia, for which the figure is 0.64 per cent, China (1.44 per cent) and Singapore (2.52 per cent).
Suparat added that the incoming Pheu Thai-led government’s promised policies meant careful management of the budget deficit would be required to support its projects. The government should borrow more money, which will increase its public debt, but it should not exceed 55 per cent of GDP, compared with 41 per cent currently.
He expressed concern that the government would allocate budget spending higher than the level of the investment budget, which would lead to a delay in the disbursement of funds for investment purposes. He said the administration should stimulate private investment by supporting companies via tax-policy facilitation.
The government should also set up a fund for increasing financial liquidity for small and medium-sized enterprises, he said. A restructuring of the tax system is also needed in order to promote investment overseas as well as attracting more foreign investment to the country.
To better promote inward investment, Suparut said the government should adjust its current conditions to facilitate investment and promote Thailand as regional headquarters for firms in the Asean Economic Community.
Moreover, the executive said the government should allocate some of the foreign reserves for setting up a sovereign wealth fund, to generate better returns from the Kingdom’s financial assets in the long run.
Source: The Nation