Thai court okays flood-related decrees, avoids political crisis

Feb 22, 2012, 10:03 GMT

Bangkok - Thailand's Constitutional Court on Wednesday approved the government's emergency spending plan in the wake of last year's floods, avoiding a potential crisis of confidence in the administration.

Prime Minister Yingluck Shinawatra might have faced calls to resign if the court had ruled that her administration's emergency decrees were unconstitutional, observers said.

The central plains north of Bangkok were hit by the worst floods in five decades from October to November.

The opposition Democrat Party had petitioned the court, arguing that last year's flood was not a current emergency, and that flood rehabilitation spending should be disbursed by the normal channels.

But the nine judges ruled that the emergency decrees were 'in keeping with constitution because the nation had suffered a devastating natural disaster,' Constitutional Court judge Jalan Pakdithanakul said.

The first decree allowed the government to borrow 350 billion baht (11.3 billion dollars) for the projects. A second transferred the obligation of interest payments on debts left by the 1997 financial crisis from the government to the Bank of Thailand, lowering the country's official debt burden and making fresh borrowing easier.

The Democrats have said that the emergency decree was unnecessary, as public debt is a modest 42 per cent of gross domestic product, leaving plenty of margin to borrow.

They also expressed concern that the emergency status of the spending could lead to less transparency and accountability.