Govt policies 'increasing cost of living'

The government’s populist policies and the Commerce Ministry’s failure to curb prices of basic consumer goods are the cause of the steep increase in the cost of living, former commerce minister Narongchai Akrasanee said on Tuesday.

Mr Narongchai, a former senator, said the 300 baht daily minimum wage for labour and the 15,000 baht minimum salary for university graduates policies were the main causes of this problem.

Narongchai Akrasanee (Photo by Pattarachai Preechapanich)

These policies have caused hardship to more than 10 million independent career income earners, those working outside the system, including street vendors who do not gain any benefit from any wage or salary hike. On top of this the prices of basic fast food dishes are being controlled by the government, he said.

The ten million independent workers have also gained no benefit from the state social security system, he added.

The former commerce minister said regulations to curb food prices were the worst policies because they not only failed to settle the cost of living problem they have worsened the situation, leading to food shortages.

He said the street vendors had to raise the prices of their dishes in line with the rising prices of raw ingredients. They also take into account higher daily wages for staff in line with the wage hike policy.

He suggested that the Ministry of Commerce revoke its price control policy and tackle the problem at its root cause, such as eliminating the monopolies of large manufacturers and influential people who control various fresh markets.

The ministry failed to do this because it did not want the capitalist owners to be affected, he said.

Mr Narongchai said the central bank’s monetary policy committee, of which he is a member, is prepared to cut the repurchase rate from the current three per cent to stimulate the economy.

Economic expansion was hurt because of delays in the government’s investment in infrastructure development megaprojects. In addition, the export sector was still not fully expanding because of the impact of the great flood late last year that hit the production sector, he said.