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April 11, 2006
Where Brashness Doesn't Play
By WAYNE ARNOLD
SINGAPORE, April 10 €” It may work for Michael R. Bloomberg as mayor of New York City, but introducing a C.E.O. style to governing Thailand has not prevented that country's billionaire tycoon-turned-politician, Thaksin Shinawatra, from running into serious trouble.
Mr. Thaksin, a former police officer who built a family telecommunications empire, swept to power in 2001 on a populist platform, promising to make life easier for the average Thai. As prime minister, Mr. Thaksin pledged to run his government the way he had run his telecommunications company, the Shin Corporation, and he swiftly enacted a raft of pro-investment, antipoverty policies that came to be known as Thaksinomics.
Now Mr. Thaksin is out of a job, having resigned as prime minister last week in the face of widespread urban protests. Generous spending programs earned him enduring support in the countryside, but Mr. Thaksin's brash, autocratic style ultimately alienated the country's urban middle class.
Criticism mounted as he tried to muzzle the press amid reports of violent crackdowns against Muslim insurgents and drug dealers, and as allegations surfaced that his policies were simultaneously lining the pockets of politicians and enhancing his family fortune. When his family announced in late January that it was selling its stake in Shin for $1.9 billion €” tax-free €” to a consortium led by Singapore's government, the public's disgust boiled over.
"The Shin transaction was just the tip of the iceberg," said Kitti Nathisuwan, head of research at Macquarie Securities in Bangkok.
While corruption is a familiar story in Thailand, strongman politics is not. What finally proved too much for Bangkok's normally deferential citizens, said Mr. Kitti, was Mr. Thaksin's lack of humility. "In Thailand when you want to do things, you have to do it the Thai way," he said.
It may be too early to write Mr. Thaksin's political epitaph, however. Mr. Thaksin remains head of the party he founded, Thai Rak Thai, which won a majority of votes in an election this month in which he initially claimed to be the victor. An election boycott by opposition parties has left Parliament with too few delegates to convene legally. But in the meantime, Mr. Thaksin has entrusted the government to his college friend and unelected deputy prime minister, Chitchai Wannasathit.
Indeed, some analysts suggest that Mr. Thaksin is only biding his time until public tempers cool. He has used similar tactics to wait out previous protests, including rural opposition to a gas pipeline to Malaysia and union demonstrations against privatizing the state-owned power utility.
Mr. Thaksin's headstrong policies have often courted controversy, even ridicule. He once raced by helicopter to a small town in a vain effort to locate a mythical hoard of wartime Japanese gold, saying it could be used to pay off the nation's foreign debts. He suggested helping the country's financial markets by advancing Thailand's clocks past those of its eastern neighbors, to the same time zone as the financial centers of Hong Kong and Singapore. And he fired his first central banker because the banker refused to raise interest rates, a move intended to stimulate spending by making Thai depositors feel wealthier.
Mr. Thaksin's strategy eventually coalesced into what he called a dual-track policy that later came to be known as Thaksinomics. While promoting foreign investment, he emphasized economic self-reliance at home. He declared a debt holiday for Thai farmers and gave grants to small villages, instituting free health care and housing programs.
While Mr. Thaksin's incorporation of aspects of microfinance earned plaudits from some economists, others derided his policies as nothing more than pork-barrel politics aimed at winning rural votes. Some have accused Mr. Thaksin of returning Thailand to the kind of easy credit environment that set the stage for its 1997 financial crisis. Others say that Mr. Thaksin achieved little more than coaxing his recession-racked nation to begin spending again in time to catch the updraft that came with the global recovery of 2002.
Nevertheless, after five years, Mr. Thaksin has left the country in better economic shape.
One of the important elements of the success of the Thaksin administration "was restoring confidence among the business community as well as consumer confidence," said Vincent Milton, the Bangkok-based managing director of Fitch Ratings.
Thailand's economy is on track to grow at least 4.5 percent this year, compared with the 2.2 percent growth it posted in 2001. Exports rose 18 percent in the first two months of 2006, according to the Bank of Thailand, after growing nearly 15 percent in 2005. Thailand's foreign currency reserves have risen to more than $50 billion. In 2003, Mr. Thaksin declared Thailand's independence from the International Monetary Fund, after making early repayment of the $3.4 billion that the fund had lent it during the crisis.
Perhaps most impressive is that Mr. Thaksin managed to accomplish what previous governments had been unable to do even under pressure from the I.M.F.: privatize the national oil company and state-owned assets like airports. And after years of delays, Thailand is on the verge of opening a $4 billion airport in place of the dilapidated, congested airport that now serves the capital.
But there have been allegations of corruption surrounding those accomplishments, and other troubling signs have emerged in the economy that some economists say expose the more threadbare patches of Thaksinomics.
After trying to use subsidies to offset the impact of rising oil prices, Thailand eliminated subsidies for gasoline in late 2004 and last year lifted subsidies on the diesel fuel that powers many of the pickup trucks favored by working-class Thais. The subsequent rise in fuel prices helped push inflation above 6 percent, tipping Thailand into a trade deficit last year and dampening consumer spending. At the same time, easy credit has sent household debt as a percentage of income to more than 57 percent, from below 50 percent in 2001.
But the most immediate concern to economists is what will happen to Mr. Thaksin's privatization and spending policies now that he has stepped aside. Mr. Thaksin was on the verge of starting a 1.8 trillion baht ($47 billion) spending program on infrastructure this year; economists fear it will be suspended, if it survives at all.
Where Brashness Doesn't Play
By WAYNE ARNOLD
SINGAPORE, April 10 €” It may work for Michael R. Bloomberg as mayor of New York City, but introducing a C.E.O. style to governing Thailand has not prevented that country's billionaire tycoon-turned-politician, Thaksin Shinawatra, from running into serious trouble.
Mr. Thaksin, a former police officer who built a family telecommunications empire, swept to power in 2001 on a populist platform, promising to make life easier for the average Thai. As prime minister, Mr. Thaksin pledged to run his government the way he had run his telecommunications company, the Shin Corporation, and he swiftly enacted a raft of pro-investment, antipoverty policies that came to be known as Thaksinomics.
Now Mr. Thaksin is out of a job, having resigned as prime minister last week in the face of widespread urban protests. Generous spending programs earned him enduring support in the countryside, but Mr. Thaksin's brash, autocratic style ultimately alienated the country's urban middle class.
Criticism mounted as he tried to muzzle the press amid reports of violent crackdowns against Muslim insurgents and drug dealers, and as allegations surfaced that his policies were simultaneously lining the pockets of politicians and enhancing his family fortune. When his family announced in late January that it was selling its stake in Shin for $1.9 billion €” tax-free €” to a consortium led by Singapore's government, the public's disgust boiled over.
"The Shin transaction was just the tip of the iceberg," said Kitti Nathisuwan, head of research at Macquarie Securities in Bangkok.
While corruption is a familiar story in Thailand, strongman politics is not. What finally proved too much for Bangkok's normally deferential citizens, said Mr. Kitti, was Mr. Thaksin's lack of humility. "In Thailand when you want to do things, you have to do it the Thai way," he said.
It may be too early to write Mr. Thaksin's political epitaph, however. Mr. Thaksin remains head of the party he founded, Thai Rak Thai, which won a majority of votes in an election this month in which he initially claimed to be the victor. An election boycott by opposition parties has left Parliament with too few delegates to convene legally. But in the meantime, Mr. Thaksin has entrusted the government to his college friend and unelected deputy prime minister, Chitchai Wannasathit.
Indeed, some analysts suggest that Mr. Thaksin is only biding his time until public tempers cool. He has used similar tactics to wait out previous protests, including rural opposition to a gas pipeline to Malaysia and union demonstrations against privatizing the state-owned power utility.
Mr. Thaksin's headstrong policies have often courted controversy, even ridicule. He once raced by helicopter to a small town in a vain effort to locate a mythical hoard of wartime Japanese gold, saying it could be used to pay off the nation's foreign debts. He suggested helping the country's financial markets by advancing Thailand's clocks past those of its eastern neighbors, to the same time zone as the financial centers of Hong Kong and Singapore. And he fired his first central banker because the banker refused to raise interest rates, a move intended to stimulate spending by making Thai depositors feel wealthier.
Mr. Thaksin's strategy eventually coalesced into what he called a dual-track policy that later came to be known as Thaksinomics. While promoting foreign investment, he emphasized economic self-reliance at home. He declared a debt holiday for Thai farmers and gave grants to small villages, instituting free health care and housing programs.
While Mr. Thaksin's incorporation of aspects of microfinance earned plaudits from some economists, others derided his policies as nothing more than pork-barrel politics aimed at winning rural votes. Some have accused Mr. Thaksin of returning Thailand to the kind of easy credit environment that set the stage for its 1997 financial crisis. Others say that Mr. Thaksin achieved little more than coaxing his recession-racked nation to begin spending again in time to catch the updraft that came with the global recovery of 2002.
Nevertheless, after five years, Mr. Thaksin has left the country in better economic shape.
One of the important elements of the success of the Thaksin administration "was restoring confidence among the business community as well as consumer confidence," said Vincent Milton, the Bangkok-based managing director of Fitch Ratings.
Thailand's economy is on track to grow at least 4.5 percent this year, compared with the 2.2 percent growth it posted in 2001. Exports rose 18 percent in the first two months of 2006, according to the Bank of Thailand, after growing nearly 15 percent in 2005. Thailand's foreign currency reserves have risen to more than $50 billion. In 2003, Mr. Thaksin declared Thailand's independence from the International Monetary Fund, after making early repayment of the $3.4 billion that the fund had lent it during the crisis.
Perhaps most impressive is that Mr. Thaksin managed to accomplish what previous governments had been unable to do even under pressure from the I.M.F.: privatize the national oil company and state-owned assets like airports. And after years of delays, Thailand is on the verge of opening a $4 billion airport in place of the dilapidated, congested airport that now serves the capital.
But there have been allegations of corruption surrounding those accomplishments, and other troubling signs have emerged in the economy that some economists say expose the more threadbare patches of Thaksinomics.
After trying to use subsidies to offset the impact of rising oil prices, Thailand eliminated subsidies for gasoline in late 2004 and last year lifted subsidies on the diesel fuel that powers many of the pickup trucks favored by working-class Thais. The subsequent rise in fuel prices helped push inflation above 6 percent, tipping Thailand into a trade deficit last year and dampening consumer spending. At the same time, easy credit has sent household debt as a percentage of income to more than 57 percent, from below 50 percent in 2001.
But the most immediate concern to economists is what will happen to Mr. Thaksin's privatization and spending policies now that he has stepped aside. Mr. Thaksin was on the verge of starting a 1.8 trillion baht ($47 billion) spending program on infrastructure this year; economists fear it will be suspended, if it survives at all.
I agree - all dogs (and mosquitos) should be killed. Fucking horrible smelly animals have no business living in a hot country like Thailand, at least not near people.
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