Move Forward party-list MP Chaiwat Sathawornwichit has claimed that the government has over-estimated the benefits of the “digital wallet” scheme in boosting the economy, as the timing is not right for its implementation.
During his speech in parliament today (Monday), he said populist schemes, such as the digital wallet, should be implemented at a time when the economy is contracting, not when it is expanding, as it is now in Thailand, although the expansion is minimal.
Like the application of an electric shock to a patient having a heart attack, Chaiwat said that the government’s plan to use the digital wallet to kick-start the economy is like applying an electric shock to a healthy person, the result may be fatal.
He also pointed out that populist policies, to inject money for people to spend, will produce a fiscal multiplier of just 0.2%, instead of three times the amount to be spent under the scheme, estimated at 560 billion baht, as claimed by the Pheu Thai party, which is unrealistic. He claimed that similar schemes implemented in Japan during the COVID pandemic resulted in less than a 1% fiscal multiplier.
Chaiwat said that the slowdown of the Thai economy is mainly due to the drop in Thai exports over the past 10 months consecutively, mostly due to economic contraction in China, which is one of Thailand’s main trading partners.
The misuse of funds for the digital wallet scheme will also mean a loss of opportunity for the other projects which are badly in need of funding, he said, as he expressed doubts about from where the funding will come.
Chaiwat also pointed to the restrictions on the use of the 10,000-baht handout under the scheme. For instance, the money must be spent within a 4km radius of the residence of the recipient, he said, adding that there are many people who do not live in their registered residences and, in the countryside, there may be just a handful of stores in the area.
In the end, most of the money will end up with convenience stores, operated by giant corporations, instead of SMEs.