Apisak: Thai finance chief is boring, but not all bad

Few ministers have made less of an impact that the man supposedly in charge of Thailand's finance. But that's OK as the country prepares for yet another transition to democracy.

Our annual Finance Minister of the Year study tends to focus as much on what ministers fail to do as what they do. Normally inaction is a knock on a minister's performance – after all, ministers are supposed to be energising their economies and promoting growth by taking action.

In the case of today's entry, however, inaction isn't such a bad thing.


Apisak Tantivorawong’s reputation for being a boring finance minister with limited influence is exactly what Thailand needs as the country prepares for a handover of power from military rule to democratic government. Public elections are scheduled for November following a series of constitutional reforms endorsed by new King Maha Vajiralongkorn in April 2017. The path to free and fair elections has its obstacles, requiring the current regime to apply a steady hand to the wheel for the next six months.

Apisak, a former president of state-owned Krung Thai Bank, has been part of the junta’s economic council since 2015. He had a slow start and there were concerns he might weaken an already frail economy. Surprisingly, 2017 turned out to be a good year. Domestic product grew by 3.6%, higher than in recent years and above forecasts. 

Debt levels are low compared to other Southeast Asian countries with sovereign debt to total government revenue standing at 177% versus 225% in Indonesia and 245% in the Philippines. 

The economy still lacks breadth, however, and the incoming government faces an uphill battle to accelerate a recovery in private consumption and investment. 

Moody’s analyst Christian de Guzman said in a report that Thailand's fiscal policy has ensured a low debt burden and high affordability compared to peers.

“Public debt is low and is easily serviced by a large stock of foreign exchange reserves fiscal discipline has been maintained through political turmoil. If Thailand can make a successful transition to a stable civilian government there could be tangible gains in competitiveness as private domestic and foreign investment are restored,” said de Guzman.

Thailand has been in fiscal expansion mode for more than a decade and is likely to continue to run budget deficits until at least 2024. Public money is being spent on projects aimed at improving infrastructure and stimulating domestic demand – while reducing the popularity of former politicians who have been angling for a return to leadership. 

Hopes are being pinned on projects like the Eastern Economic Corridor (EEC) which calls for a $6 billion upgrade of U-Tapao International Airport, $6.7 billion investment in railways, $12 billion for new cities and hospitals, and $15 billion for industry. Apisak wants 80% of overall investment to come from the private sector and China.

Apisak has adhered to hard ceilings on budget expenditure and principal repayments on debt – ceilings he hit in January this year when he issued a supplementary budget of another 150 billion baht ($4.8 billion), bringing the 2018 fiscal budget deficit to 550 billion baht, the highest since 2014. Apisak told Reuters the budget deficit would help the economy “take off” this year, with “higher and sustainable growth”.

The next six months will be critical to the country’s future. Challenges to the legitimacy of the military government remain a real threat and there is uncertainty around how the November elections will be orchestrated. Apisak’s job is to hold tight, stay focused and keep out of the headlines. Now is not the time for ambitious moves. 

Doing very little is enough to lift Apisak above Taro Aso of Japan, Paul Chan of Hong KongMalaysia's Najib Razak and Taiwan's Sheu Yu-jer.

ON MONDAY: A minister who deserves little credit for a strong economy

This article has been corrected to clarify Moody’s analyst Christian de Guzman comments. 

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