Thai Government Appoints New Finance Minister to Boost Investor Confidence

07 March 2007

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Thailand’s military-installed government
has appointed a former World Bank economist to the post of finance
minister in a partial cabinet reshuffle. Ron Corben reports from
Bangkok that the appointment, aimed at boosting international
confidence in the Thai economy, is being welcomed by financial analysts.

Undated photo shows Thailand's new finance minister, Chalongphob Sussangkarn in Bangkok
Undated photo shows Thailand’s new Finance Minister, Chalongphob Sussangkarn in Bangkok

The most important cabinet appointment Wednesday was that of Chalongphob Sussangkarn as the new Thai finance minister.

Chalongphob, 57, is currently president of a private economic
research institute. He is a former World Bank economist, and was a
member of the Thai central bank’s monetary policy board from 2000 to

He replaces Pridiyathorn Devakula, whose brief tenure was marked by
policy changes that unsettled investors and reduced international
confidence in Thailand’s military junta.

Arporn Chewakrengkai, chief economist at the Thai Government Pension
Fund, says Chalongphob is well regarded within the business community,
and his appointment will help rebuild confidence in the economy.

“I think it should be positive for the government. He is one of the
most respectable economists in Thailand,” she said. “That is the first
thing that might help gain some confidence. At least I believe in terms
of policy direction, we will move toward the market mechanism.”

Confidence in the country and its leadership has been rocked by
several events since the military staged a coup in September and kicked
Prime Minister Thaksin Shinawatra out of office.

In December the Bank of Thailand imposed controls on capital
investments in a bid to keep the Thai unit of currency, the baht, from
strengthening too much. The move led the stock market to plunge 15
percent in one day.

The Government then tightened rules that allowed foreigners to
control Thai companies through the use of what are known as nominee
shareholders. That called into question the basis on which several
large international companies are operating in Thailand.

Confidence was also hit by explosions in Bangkok on New Year’s Eve
that left three dead and dozens wounded. The police have yet to
determine who was behind the bombings.

Thepchai Yong, a senior editor with the Nationmedia Group, says
stronger leadership by interim Prime Minister Surayud Chulanont is the
key to regaining public confidence.

“The lackluster performance of the government is largely due to the
lack of leadership on the part of the prime minister,” he said. “I
believe that the confidence in the government and the prime minister
has been eroding, and he has to make a very serious change in the way
he wants things in order to continue be in power.”

The Thai economy, the second largest in Southeast Asia, has been slowing since the military takeover.

Foreign investors say they are focused on when parliamentary
elections will be held under a new constitution now being drafted. The
military junta originally promised elections by October.

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