Thai opposition aims to keep baht 'competitive', raise incomes

[Jasonkoh82]

Thai opposition aims to keep baht 'competitive', raise incomes
04:47 AM Jun 29, 2011

BANGKOK - Thailand's main opposition party, leading in polls ahead of the election this Sunday, will seek to keep the country's currency "competitive," according to its economic chief, Mr Suchart Thadathamrongvej.

"The baht has to be competitive," Mr Suchart, who was Thailand's finance minister in 2008, said in an interview at Pheu Thai Party headquarters in Bangkok on Monday.

Most studies show "if you have a managed fixed-exchange rate, it's better than a flexible exchange rate," he said.

Pheu Thai, headed by the sister of former Prime Minister Thaksin Shinawatra, has the lead in opinion polls ahead of the elections.

It has pledged to raise minimum wages, extend tax incentives and guarantee rice prices for farmers.

Mr Suchart said the party aims to raise incomes for the lowest-paid workers and create more domestic demand to reduce the country's reliance on exports.

Thailand's foreign exchange reserves have increased more than 7 per cent to US$185.42 billion (S$230.35 billion) this year, according to central bank data, a sign the monetary authority bought US dollars to stem the baht's appreciation.

The baht has climbed 4.7 per cent against the US dollar in the past year, and is down 3.1 per cent this year.

A stronger currency makes exports more expensive, and overseas sales account for about two-thirds of South-east Asia's second-largest economy.

Thailand's export growth slowed to 17.6 per cent in May.

The baht touched its strongest level since 1997 in November, prompting the government to remove a 15 per cent tax exemption for foreigners on income from domestic bonds to curb gains.

Pheu Thai has also pledged to raise the minimum wage to 300 baht (S$12.05) per day should it become the government.

The daily minimum wage in Thailand ranges from 159 baht in the northern Phayao province to 221 baht in the resort island of Phuket, according to the Labour Protection and Welfare Department's website.

"If you start redistributing the money from you to the poorer part of your family, then you will become richer," Mr Suchart said.

The party aims to raise the wages within six months, he said.

Prime Minister Abhisit Vejjajiva's Democrat Party has promised to raise wages by 25 per cent in two years. Bloomberg

Source
http://www.todayonline.com/World/EDC...-raise-incomes

[Jasonkoh82]

I wondered are there any figures or chart of the incomes per resident employed? Here are the eg given in singapore straits times dated 11 December 2010, Widening wage gap. Does it matters? Notice the changes of the top 20% and bottom 20%.

Widening wage gap. Does it matters Straits Times 11 December 2010.jpg

[paul_au]

Most studies show "if you have a managed fixed-exchange rate, it's better than a flexible exchange rate," he said.
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That seems a strange rational, since most western currencies have done the reverse, floating the currency to allow supply and demand to control the value. Australia in fact floated the Australian dollar back in 1983 and it instantly dropped, once the Australian economy increased due to increased productivity from liberalization of the market place, the Australian dollar has since risen again.