Debt to the public but not public debt: Seeking legal solutions to Bangkok’s debt obstacles.

Abstract

Facing an unprecedented fiscal challenge stemming from the Bangkok
Mass Transit System (BTS) Green Line extension and lingering effects of
COVID-19, Bangkok bears a debt burden of THB 40 billion, exceeding that of
any other local self-governed organization in Thailand. Despite falling outside
the definition of public debt and its assets being legally immune from seizure,
Bangkok remains obligated to repay this debt. However, its current financial
shortcomings and existing solutions, such as acquiring additional loans,
issuing bonds, seeking government intervention, negotiating with creditors,
or restructuring, are either practically infeasible or untested within the Thai
context, making finding a solution critically urgent.
Researchers suggest adapting principles akin to those enshrined in
Chapter 9 of the US Bankruptcy Code and integrating them into the existing
Thai bankruptcy statute. This approach could offer a valuable and structured
framework for effectively restructuring Bangkok’s debt burden while ensuring
the continued provision of essential public services. Notably, the proposal
includes an automatic stay provision, offering temporary relief from creditors.
Furthermore, concerns that typically deter American municipalities from
pursuing Chapter 9, such as adverse market reactions or population decline, are
deemed less relevant within the specific context of Bangkok