Thaksin on Thailand DUBAI, March 10
Thaksin on Thailand – Colum Murphy
The Wall Street Journal
DUBAI, March 10 – “I am unemployed so I don’t have a business card,” Thaksin Shinawatra says, tongue-in-cheek, as he greets me at his office.
But that doesn’t stop the fugitive former prime minister of Thailand from circling the globe striking up business deals, meeting world leaders and doling out words of wisdom on how to cure Thailand’s economic ills.
Although unsolicited, it’s advice the current Thai prime minister, Abhisit Vejjajiva, would do well to heed. Like many other export-dependent economies in Southeast Asia, Thailand is in poor shape. Abhisit recently warned Thais to brace themselves for more grim economic news in 2009.
Southeast Asia’s No. 2 economy shrank by 4.3 per cent in the last quarter of 2008 on the back of lower exports and a drop in tourist receipts – the poorest performance in over a decade.
Thaksin, who was ousted in a bloodless coup in September 2006, says that even without the global economic and financial crises, Thailand was in a bad position due mainly to the political instability that has plagued the kingdom for the past three years.
“Stability is the prerequisite for prosperity. Without stability, you cannot prosper,” he says in a recent interview in Dubai, just one of the locations around the world he uses as a base since he became a fugitive late last year.
Thaksin fled a two-year prison sentence for conflict of interest in relation to a real-estate deal involving his ex-wife.
For stability to return to Thailand, reconciliation of political divisions is needed, he says. It’s time to “bury the hatchet,” and unite for the sake of Thailand.
One of Asia’s most successful businessmen, the telecom tycoon-turned-politician believes his economic track record speaks for itself. Coming to power first in 2001, he says he helped Thailand recover after the 1997 Asian financial crisis.
Thailand watcher and journalist Bertil Lintner says this is a “preposterous claim” and that the Democrat-led government of Chuan Leekpai had cleaned up most of the mess by the time Thaksin came to power.
Thaksin begs to differ. He says that when he came to power the public debt-to-GDP ratio was 57 per cent, stock prices and foreign reserves were low and the country was saddled with a huge loan from the International Monetary Fund.
All that had changed within two years of taking the helm as prime minister, he says. The IMF loan was paid off in advance, foreign reserves began to pile up, and the debt-to-GDP fell to the 30 per cent range. “So is that the [work of my] predecessor or myself, my government?” he asks.
Now he says he is willing to share his expertise with the current Thai administration. What would his “advice” entail? Much more than the $800 million economic stimulus outlined by Abhisit in January.
That “Plan of Action” had many of the trademarks of so-called Thaksinomics, including low-interest loans to farmers.
“All they have done is recycle my policy ... it’s not going to work during this time,” says Thaksin.
One reason, he says, is that the current government has a limited budget to play with. Even if funds were plentiful, it’s not just a question of throwing money at the problem, Thaksin argues. Getting Thailand out of the crisis requires imagination, not just cash injections.
“The stimulus package should not be for spending only, it should be for economic change,” he says. “You have to change where you put yourself in the post-subprime world. So that budget has to be allocated for that purpose. If you are just thinking about spending and consumption, it’s not enough anymore,” he says.
Thailand needs a visionary plan – something the former prime minister says Abhisit and his team lack. “Asia will be the engine of growth (in the post-subprime world),” he says. “We have to have a strategy of where Asia is heading for and where Thailand will be part of it.”
This means differentiating oneself from competitors. “We have to think about the creative economy,” he says. “You have to produce something that’s not just the same as other countries and competing in the same market, cheap and selling cheaply. That’s not going to work anymore.”
It’s a mantra frequently heard in the region, as countries such as Malaysia and Vietnam struggle to find ways to climb up the value chain.
What has Thailand got to offer that these countries don’t? For Thaksin it’s all about carving out a niche that speaks to a country’s culture and talent pool. But it’s also about planning and implementing structural change of the economy.
For Thailand, that means reducing reliance on export-led growth by spurring the domestic economy, taking actions to facilitate trade and creating an environment that is open to foreign investment.
The impetus for change must come from within Thailand, says Thaksin.
Certainly, he doesn’t expect much assistance from Washington. “I don’t think the US can help any other countries,” he says. Americans have to “help themselves first,” he says, noting that while the Obama stimulus package is welcome, he believes it is still not enough.
Similarly, he is not impressed with China’s plan to boost its economy. Globally, he says, “the expectation of economic recovery in second half 2009 is probably unrealistic.” He expects a “mild economic recovery in 2010.”
The United States can do something to help Thailand, at least on the political front. “If Washington sticks to its democratic values and prioritises democratic values as its top, top priority in building relations, that would help a lot,” says Thaksin. George W. Bush, he believes, was too focused on the war and terrorism to the point that he “forgot the democratic world.”
Ultimately, the economic future of Thailand depends on whether reconciliation of political divisions can be achieved, says Thaksin.
He is upbeat about the prospects, saying that he expects some form of resolution to the current political instability within this year. He is in no doubt that he will return to his homeland.
“I will go back to Thailand. It depends on when,” he says. “I don’t think I will end my life abroad like some other leaders that were ousted and exiled from Thailand before.”
If Abhisit gets his way, however, Thaksin could be back in Bangkok sooner than he thinks. The current Thai leader is actively seeking Thaksin’s extradition to Thailand. In an interview in January this year, Abhisit told the Far Eastern Economic Review that Thaksin should come back and face the music like “any other Thai” would.
“He (Thaksin) should at least come back and respect the decision of the court,” said Abhisit.
Thaksin says he is not worried in the slightest about such threats and says Abhisit is only trying to embarrass him for political gain.
Besides, his return to Thailand may not even depend on the young prime minister. From exile, Thaksin seems more concerned with convincing the monarchy of his loyalty than worrying about his political opponent, stressing heavily his allegiance to the revered King Bhumibol Adulyadej.
“I have been alleged of not being loyal to His Majesty the king, but actually I am very loyal to His Majesty the king,” he says. “I am a domestic dog that can be tamed any time. I’m tame already and I can be tamed again.”
Should Thailand’s economy continue to deteriorate, more Thais might be willing to give Thaksin the second chance he seems keen to have.
“Whatever I can contribute for the country and for the monarchy I will do my best,” he says.
The Wall Street Journal
