470. Despatch From the Embassy in Thailand to the Department of State1

No. 492

REF

  • Embassy Despatch 458, March 24, 19552

SUBJECT

  • Prime Minister’s Response to U.S. Ambassador’s Suggestions Concerning Thai Economic Policy

The referenced despatch transmitted a copy of my letter of March 21 addressed to the Prime Minister, recording at the latter’s request the suggestions which I had orally proffered to him on March 18 as to measures which the Government of Thailand might appropriately take to assure the more effective use of its economic resources. As indicated in the referenced despatch, these suggestions had been favorably received by the Prime Minister when orally outlined to him.

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I have just received a letter dated April 13 signed by the Prime Minister3 expressing appreciation for my suggestions and indicating that these “coincide with the policy of the Government to improve upon public administration” in Thailand. A copy of this letter is transmitted herewith. Attention is invited to the fact that the Prime Minister is not entirely persuaded of the necessity of creating a Budget Bureau, as I had proposed, “under the direction of the Ministry of Finance for the purpose of examining budget requests prior to their presentation to the National Assembly and of supervising the expenditure of funds already appropriated”. He says, in this connection, that the Comptroller General’s Department within the Ministry of Finance is now charged with precisely these responsibilities. While this is very largely true as a matter of law, the fact is that large sums of revenue and expenditure are actually outside the controls exercised by the Comptroller General. My suggestion, therefore, was put forward after informal consultations between representatives of the Ministry of Finance and those of my Embassy and USOM precisely to emphasize the importance of such functions. Nevertheless, as the Prime Minister indicates, whether or not a new “Budget Bureau” is created or the Comptroller General’s Department is reenforced is a matter of form rather than substance, provided the power of review of requests and supervision of expenditures is vested in a semi-autonomous governmental body. It is encouraging in this connection to observe that the Prime Minister refers, as had the referenced despatch, to the recent request of the Minister of Finance to earmark part of U.S. defense support funds to finance a study by U.S. experts of means by which Thailand’s system of public finance and fiscal management may be improved.

Despite the Prime Minister’s view that my suggestions coincide with the policy of his government in economic matters, it is obvious that many of these policies have still to be translated into action. With the formal indorsement which his letter now offers, we intend on every appropriate occasion to encourage Thai Government officials to carry out those policies.

John E. Peurifoy
  1. Source: Department of State, Central Files, 792.5–MSP/4–1855. Confidential.
  2. Supra.
  3. Attached but not printed.