Accelerating Further Measures to Help Flood Victims and Flood-Hit Businesses

(07/12/2011)

The Government is accelerating financial measures to ease the hardships of flood victims, some of whom may turn to non-conventional financial sources. At the same time, assistance measures have been issued to bring quick recovery to both Thai and foreign businesses that have been affected. The Director-General of the Fiscal Policy Office, Somchai Sujjapongse, said that the flooding disaster in Thailand this year had a great impact on the Thai economy, covering agricultural, industrial, and tourism and service sectors. According to a preliminary survey, damage and losses are estimated at between 127 and 254 billion baht. He said that the flood disaster had also adversely affected the labor market, leading to a rising number of unemployed people. Mr. Somchai quoted figures issued by the Office of the National Economic and Social Development Board that, as a consequence of the flood damage, Thailand’s unemployment rate is likely to stand at between 1.8 and 2.3 percent, comprising 730,000-920,000 people, in the fourth quarter of 2011. He said that the rising unemployment rate would bring down people’s earnings, thus affecting their living conditions. Because of economic difficulties, a number of people might depend more heavily on non-conventional loans with high interest rates. Aware of this problem, Mr. Somchai stated that the Fiscal Policy Office had prepared measures to reduce the people’s dependence on non-conventional financial sources in order to ease their debt burden. The Office is working with five financial institutions in opening counseling service units to help tackle the problem of non-conventional debts and to offer credit to flood-hit people. The five financial institutions include the Bank for Agriculture and Agricultural Cooperatives, the Government Savings Bank, the Islamic Bank of Thailand, the SME Development Bank of Thailand, and the Government Housing Bank. Flood-hit persons interested in securing credit from these banks may contact the branches of these banks nationwide. The Ministry of Commerce, meanwhile, has offered soft loans totaling five billion baht to small and medium-sized enterprises and micro-businesses that were damaged by the flooding. As for the affected foreign businesses, the Ministry has relaxed its rules for their operations and offered guarantees for their loans on a temporary basis. A package of assistance measures has also been offered to flood-hit companies by the Office of the Board of Investment. The companies may seek import tax exemptions on machinery brought in to replace that damaged by the flooding. The affected firms will also be allowed to outsource some parts of the production process to maintain business continuity.