A ‘Dream’ Government Goes Sour in Thailand

http://www.nytimes.com/2007/01/11/business/worldbusiness/11baht.html

By THOMAS FULLER
Published: January 11, 2007

HONG KONG, Jan. 10 — When Thailand’s military-appointed government took office in October, it was hailed in the country as a dream team, with experienced Western-educated technocrats who had the rare quality of being “above politics.”

But after a series of botched policies and reversals, the latest on Wednesday, in managing the economy — the very area where the government was supposed to excel — investors and political analysts seem to be counting the days until democracy is restored and a fresh government can take its place. This government, analysts say, has shown none of the disciplined efficiency that was expected from a cabinet picked by generals who voided the Constitution and ousted the elected prime minister, Thaksin Shinawatra, on Sept. 19.

“It looks to me like technocratic incompetence,” said Thitinan Pongsudhirak, a professor of political science at Chulalongkorn University in Bangkok. “We have seen very haphazard and ad hoc measures. You don’t know what they’re going to do tomorrow.” The most recent confusion came with an announcement Tuesday that Thailand would tighten rules for foreign companies operating in the country. But according to The Associated Press, Finance Minister Pridiyathorn Devakula told foreign investors in Bangkok Wednesday that the new, more restrictive rules would not apply to telecommunications companies, a reversal of Tuesday’s announcement.

By exempting telecommunications companies, the government seemed to be undercutting the ostensible impetus for the change in rules: forcing a Singapore-controlled company, Temasek, to reduce its stake in largest Thai mobile phone operator.

The first in this series of reversals began last month, when the central bank’s governor, Tarisa Watanagase, announced what was effectively a tax on foreign money invested in stocks and bonds. But after the main stock index fell 15 percent, the finance minister revised the measure to exclude stocks.

Thais who seemed willing a few months ago to overlook the government’s lack of democratic credentials are now urging quick elections, even before a new constitution is drawn up.

“The main role of this government should have been interim, to change some of the rules and to make sure that law and order are established,” said Jon Ungpakorn, a former member of the defunct Thai Senate. “I don’t think they have a political sense of what is really needed — a quick move toward elections. The promise of the coup leaders to return to democracy within one year does not look realistic.”
Bombings in Bangkok that killed three people on New Year’s Eve have also dispelled the notion that Thailand under a military-installed government is any more secure.

Meanwhile, Mr. Thaksin, the ousted prime minister, seems to be abandoning any attempt to return to power, according to his lawyer. “He no longer wants to be involved in politics,” the lawyer, Noppadon Patama, told reporters in Bangkok. “He will not run for the next general election because he does not have any more political ambition to be the prime minister again.”

Separately, a Bangkok newspaper, The Nation, reported Wednesday that the government had revoked the diplomatic passports of Mr. Thaksin and his wife, Khunying.

————————————-

Economist

Thailand

Rebranding Thaksinomics

Jan 11th 2007 | BANGKOK
From The Economist print edition

And wrecking the economy, with the UN’s ill-judged backing

IGNORING warnings that foreign firms might pull out, on January 9th Thailand’s military-backed government announced tighter restrictions on foreign ownership of local companies. The stockmarket, battered by December’s botched curbs on currency inflows, a spate of bombs in Bangkok and rumours of power struggles in the army, fell further. So the government backtracked on some of the changes, further denting its credibility.

The government’s espousal of a “sufficiency economy” theory, developed by King Bhumibol, further fuelled suspicions that it plans a partial retreat from Thailand’s hitherto liberal economic stance. No, insisted the prime minister, General Surayud Chulanont, the sufficiency economy “does not by any means imply a rejection of globalisation”. So what does it mean? The general was launching a report on Thailand by the United Nations Development Programme (UNDP), which promised to answer that very question. It explains that the sufficiency theory is for sustainability, moderation and broad-based development; and against excessive risk-taking, inequality and other evils.

The king developed his theory during the 1997 Asian economic crisis, when the consequences of years of reckless growth caught up with Thailand. But Thailand’s finances are now much more solid and great progress has been made in bringing health care and education to the rural poor—as the royal theory proposes. Like so many generals, the leaders of last September’s coup seem to be fighting the last war.Judged by the sufficiency theory’s own tenets, the five-year government of Thaksin Shinawatra, the deposed prime minister, was wondrous. His “30-baht health plan”, offering treatments for less than a dollar, helped cut poverty sharply. Yet his government ran a surplus most years (the new one plans a deficit), cut public debt and built big currency reserves. There were extensive programmes to help rural villagers find new sources of income.

However, the UNDP report goes out of its way not to mention the Thaksin government or its policies. There is no discussion of how the new “sufficiency” policies will differ from Mr Thaksin’s—just an uncritical lauding of the new government’s five-year plan as “the biggest shift in Thailand’s economic orientation in over two decades” and much praise for royal projects.

The sufficiency theory talks of “immunising” the national economy against shocks. So far, the military government only seems to be creating shocks. As a result, growth is set to slow, and with it Thailand’s progress in cutting poverty. Neither the UNDP‘s report, nor the many speeches launching it, discussed such awkward truths. The generals, having struggled to pin charges on Mr Thaksin, now want to airbrush him from public consciousness, to thwart any comeback. This week they told Thai broadcasters to stop quoting him.

The autocratic businessman-turned-politician was careful to attach a personal brand to his popular policies. Many are now having the label removed: the 30-baht treatment fee is being dropped, so cheap or free health care can no longer be called by a name linked to Mr Thaksin. Overall, the generals want to overwrite his brand with the only stronger one in Thailand: the monarchy.

Perhaps it makes sense for the new government to obscure its predecessor’s achievements while stealing its best clothes. The question is why the UNDP thinks it should provide cover for this whitewash by puffing the sufficiency economy as a miracle-cure for the developing world’s woes. The answer is that the UNDP is a sucker for this sort of new-age waffle, especially if it has royal patronage. It has also lauded the not entirely dissimilar “Gross National Happiness” theory of Bhutan’s King Jigme Singye Wangchuk.

In publishing such an unbalanced report on a theory that is untried on a national level, the UNDP has abandoned all sense of objectivity. It is also lending legitimacy to a regime that took power by force. Hakan Bjorkman, the UNDP‘s deputy chief in Thailand, says it wanted to provoke a debate. But no such debate is possible in Thailand, because sufficiency theory is the king’s philosophy and anything remotely critical of it could be seen as lèse-majesté, punishable with jail.

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