d - Asia Today International

OPINION
THE
FAREWELL
THAT
WASN’T
IRONICALLY, in Thailand,
Thaksin has given globalisation
a bad name. US$47
billion in infrastructure projects,
privatisation of State
enterprises and the Thai-US
FTA are now in limbo . . .
ANALYSIS
Robert Horn*
BANGKOK – It was one of the most
disingenuous farewells of all time.
When Thailand’s Prime Minister, Thaksin
Shinawatra, announced on April 4 that he
would not accept the premiership for a third
term, street protesters who had been
demanding his resignation for months
rejoiced. The celebrations were short-lived.
Thaksin was retaining his seat in
Parliament and his leadership of the ruling
Thai Rak Thai party, prompting his opponents
to charge that whoever succeeded Thaksin as
Prime Minister would merely be his puppet.
With demonstrators vowing to take to the
streets again unless Thaksin completely
divorces himself from politics, Thailand
appears to be heading for another round of
conflict and confrontation. That’s bad for
business, because while this drama drags on,
a range of important decisions regarding the
economy have been put on the backburner.
Among them are US$47 billion in infrastructure
projects the Government was opening
up to foreign bidders, privatisation of
State enterprises and the Thai-US Free Trade
Agreement, which is now in limbo.
Although Thaksin’s Thai Rak Thai party
won a snap election on April 2, the strength of
the anti-Thaksin movement has forced the
party to announce that the new Government
will remain in power for only seven to 15
months, and be mainly concerned with implementing
badly-needed reform of Thailand’s
constitution and political system. New elections
will then follow.
Contracts for infrastructure, therefore,
won’t be handed out until the second half of
2007 – at the earliest. That’s assuming the
Government tasked with reforming the system
can be seated soon and last long enough
to do the job.
Despite winning a landslide victory in
February 2005, Thaksin felt compelled to call
a new election and seek a new mandate this
April. The reason was growing street protests
against his rule following the January sale of
his family’s telecommunications business,
Shin Corporation, to Temasek Holdings, an
arm of the Singapore Government, for US$1.9
billion. Several aspects of the deal – the fact
that the Shinawatras paid no tax on the sale,
that shares were moved around in offshore
shell companies while family members were
allegedly dumping shares during the negotiations,
and that laws on foreign ownership
appeared to have been changed to facilitate
the deal – looked shady to the public.
To quell the uproar, Thaksin said he would
answer all questions about the sale in
Parliament. Then, rather than answer questions,
he dissolved Parliament and called a
new election. Confident he would win, he
announced that no questions about the Shin
Corp sale would be tolerated once he did. In
response, the Opposition chose to boycott.
Thaksin's Thai Rak Thai party won, sort of.
TRT swept rural areas, but lost all major urban
centres, leaving Thailand clearly divided.
Furthermore, 24 of Thaksin's candidates who
ran unopposed in their districts failed to be
elected because they could not muster the 20
per cent of voters the law requires to win.
Unless all seats are filled, Parliament cannot
legally be seated and a Prime Minister cannot
be elected. Another round of elections to fill
the empty seats was held on April 23, but not
all were filled. The Election Commission is
now advising TRT to go to court to seek a ruling
to open Parliament without the necessary
quorum, a move sure to spark more street
demonstrations. Some protesters are asking
Thailand's King Bhumibol Adulyadej to intervene
and appoint an interim impartial
Government to carry out political reforms, a
step his privy councilors have stated the
monarch would prefer not to take.
Regardless of whether the next
Government is elected or appointed, if
Thaksin remains part of it, or appears to be
❝ Regardless of whether
the next Government is
elected or appointed, if
Thaksin remains part of
it, or appears to be
pulling the strings from
behind the scenes,
protests will continue ❞
pulling the strings from behind the scenes,
protests will continue – and the risk of violence
will escalate. Blood running in the
streets will surely spell the end of any government
and deter most investors. Furthermore,
Thaksin’s presence in the halls of power is, in
itself, now an obstacle to the infrastructure
projects, privatisation and the Thai-US FTA
moving forward.
The reason is Thai public opinion. The Shin
sale caused long-simmering suspicions to boil
over among middle-class urban Thais that
Thaksin and his friends were using their
Government positions to enrich themselves.
THE THAKSIN ELECTION
Polls show that Thais regard corruption as the
worst aspect of the Thaksin Administration.
“He presented himself as clean by saying he
was so rich he had no need to be corrupt. But
scandals showed that wasn’t the case,’’ said
Prof. Sunai Phasuk of Chulalongkorn
University in Bangkok.
When the Government privatised the
Petroleum Authority of Thailand, relatives of
Cabinet members walked off with the largest
lots of shares, while many average Thais
weren’t able to purchase them. And last April,
news broke that a US company had admitted
to the Securities and Exchange Commission
it had paid money to a Thai businessman in
order to bribe Government officials so they
would buy its scanning equipment for the
New Bangkok International Airport. Thaksin
refused to fire the Minister overseeing the
project, despite waging a much publicised
“War on Corruption”. The result is that a significant
portion of the public believes Thaksin
and his men can’t be trusted not to use foreign
investment, privatisation and trade deals
as vehicles to line their own pockets.
A key theme of the protests was that
Thaksin was “selling the country”. Just about
all of Shin Corp’s businesses are Government
concessions or dependent upon Government
regulations – which critics charge were
designed to benefit the Shinawatra companies.
Now, concessions – including satellite
and telecommunications equipment and frequencies
which have national security implications
– have been sold to Temasek.
“Thaksin claimed to be patriotic and frequently
called his opponents traitors. With the
Shin deal, he went totally against the notion
➔ CONTINUED PAGE 6
From the pages of ASIA TODAY INTERNATIONAL
MAY 1986 – Falling world oil prices force Indonesia to
restructure a number of trade and investment policies;
Business looks for new direction as the Aquino
Government assumes power in Manila, hoping for lower
taxes and a Board of Investment which promotes rather
than regulates; more Chinese provinces consider a
direct presence in Australia.
MAY 1991 – Political instability in India prompts a
sharp rise in the country’s risk rating; Widespread discounting
in trade finance in Australia as banks fight for
market share; Coup in Thailand leaves intact plans to liberalise
banking and financial policies.
MAY 1996 – Chinese banks attempting to renegotiate
wool contracts, with payment problems emerging;
India’s financial services industry hoping for return of
market liquidity and softer interest rates following pending
election; Rising yen opens new opportunities for foreign
firms to bid for Japanese-funded aid projects in
Asia.
MAY 2005 – Hong Kong repositioning as Corporate
China realises the former British colony offers the best
route through which to establish a global presence;
Indonesia indicates interest in an FTA with Australia as it
begins negotiations with Japan and the US; World sugar
prices forecast to fall, but cotton prices could increase 12
per cent; Turning Macau into the Las Vegas of Asia;
Singapore steals Hong Kong’s shipping crown.
ASIA TODAY INTERNATIONAL MAY 2006 | 5