The governtment is urged to add the expansionary budget by another 10 per cent in both 2009 and 2010 fiscal years, to boost the economy, said former deputy prime minister Olarn Chaipravat.
In a seminar on "Northern economy's survival amid global crisis" in Chiang Mai on Monday, he also noted that the government must also be thorough in allocating the budget and ensuring that the money has been spent within 6-9 months.
"Roughly, the entire world has lowered interest rates to nearly 0 per cent, but in the next 1-2 years, the US, Europe and Japan would see minus 1-2 per cent in economic growth. Fiscal measures (including extra spending and tax cuts) are necessary," he said.
He noted that the crisis is unlike 1997, when the problem started in the homeland. Though the Thai baht weakened sharply against US dollar, the weak baht later boosted exports. However, this crisis was originated in other countries.
The crisis would hit the northern's exports particularly those of electronics and parts, of which orders have declined by 30 per cent on year, as well as tourism and agriculture. He said boosting exports would be the only wayout, while the government should intervene agricultural products prices.
Moreover, the allocation of the expansionary budget must not be concentrated. He suggested that the government should not preset the spending areas, but should let the locals decide what they need to increase income.
