Thaksin's debt plan raises concerns among academics

Academics have raised concerns about a debt relief plan proposed by former Prime Minister Thaksin Shinawatra. They warn that the plan might not address the real problems of household debt in Thailand and could even worsen the situation. Thaksin's proposal involves the government buying back individual debts from banks. The idea is to let people repay their debts slowly while removing their names from the National Credit Bureau, giving them a fresh start. This plan could involve private investment, not just government money. However, some experts suggest a different approach. Assoc Prof Wichai Witayakiattilerd from Thammasat University believes allowing asset management companies (AMCs) to buy bad debt could be a better way to deal with the situation. Currently, Thailand's household debt is 15.54 trillion baht, with around 620 billion baht as non-performing loans. Wichai suggests focusing on low-income earners with debts under 500,000 baht instead of trying to help everyone at once. He also warns that the program could fail if people do not change their spending habits. Nonarit Bisonyabut, a researcher at the Thailand Development Research Institute, disagrees with Thaksin's plan. He says it may only provide temporary relief and does not tackle the deeper issues causing the rising debt. He notes that banks are becoming more cautious about lending and people are saving money instead, which restricts economic activity. The Bank of Thailand is waiting for more information on the proposal. It emphasizes the need for better financial discipline to prevent future debt problems. Meanwhile, MP Sirikanya Tansakul expressed doubt about the effectiveness of Thaksin's plan. She pointed out that many debts are in the informal sector, and questioned how the AMCs would buy the debt if government funds were lacking.