TRT policies may have to be 'adjusted'
January 22, 2001
If prime minister-elect Thaksin Shinawatra can fulfil only half of what he promised during his campaign, then he will have done his job, one of Thailand's top business executives has said.
In spite of the high expectations for Thaksin, Chumpol Na Lam-lieng, the president of Siam Cement Group, said the Thai people would be pragmatic when it came to reality.
"I don't think the people will expect too much from Khun Thaksin. If he can do 50 per cent of what he has pledged, then he's going to be alright," he said.
During a lengthy interview with The Nation last week, Chumpol parted with the tradition of the Siam Cement Group, whose executives seldom discuss politics, whether candidly or publicly. It is almost a taboo at the company to talk politics.
Yet Chumpol seemed comfortable touching on political subjects, outside the business domain of Siam Cement, that could have far-reaching consequences on the conglomerate's business.He voiced cautious optimism about the landslide victory of Thai Rak Thai, which has become the first party in Thai democratic history to capture majority control of the House of Representatives.
The bright spot of this general election is that the voters have thrown out old-style politicians, Chumpol said. Before the politicians needed to buy only about 20 per cent of the eligible voters in order to make it to Parliament. Vote counting at polling units also made it easy to control vote buy
ing in the past, he said.
However, he said it is a whole new ball-game now thanks to the new Constitution and the enthusiasm of Thai people for change.
Voter turnout of 70 per cent rendered vote buying almost obsolete since the politicians could not afford to buy every voter. Secondly, vote buying was deterred by the counting of ballots in centralised locations. In this way, the vote-buying politicians had no way to cross-check which candidates the voters had actually chosen.
The mandate won by the Thai Rak Thai will allow the Thaksin government the political leverage and flexibility to pursue its economic programme, Chumpol said. He added that past governments were hamstrung by coalition politics, making it difficult to implement programmes to the best benefit of the nation.
Chumpol said that as a businessman, Thaksin knew the limits of what was possible and what was not.
He said that several key campaign promises made by Thai Rak Thai -universal health care, suspension of farmers' debts, the Bt1-million village funds and the national asset-management company (AMC) - would in reality have to be adjusted to carry certain conditions.
Chumpol pointed to the national AMC and the financing of rural business in particular.
He supported the method of the incumbent Democrat-led government in tackling the bad debts in the banking system. The outgoing government relied on a mixture of bank closures, bank interventions, official capital injections and government-run and privately run AMCs to tackle the banking crisis.
Allowing private banks to handle their bad debts through their own AMCs was the best way available to handle the non-performing loans (NPLs). He said banks knew their customers, each of which had to be dealt with differently. Even the Financial Sector Restructuring Authority, which auctioned the Bt900-billion assets of the 56 defunct finance companies, also needed to separate the bad assets into different tranches.
Chumpol said in most instances, banks allowed their indebted customers to continue to run their businesses as they knew that if they were to foreclose the properties, the businesses would deteriorate even further.
"Houses that have been foreclosed by banks turn into rotting buildings very quickly, with the grass growing tall. So the banks end up just leaving the owners to continue to occupy the houses. At least, you have somebody looking after the house," Chumpol said.
The main problem with tackling the NPLs is that there are no buyers in the secondary market. Most industries are running at only 50 to 60 per cent of their capacity, so there are no incentives to acquire more assets amid the slow pace of the economic recovery, he said.
Chumpol urged caution when it came to the Thai Rak Thai's programme of financing rural business operators or farmers out of their economic crisis. He said, the party would like to create a new entrepreneurial class, which would be supported by a parallel financial system such as the People Bank or SME Bank.
But Chumpol said entrepreneurs by nature had to grow bit-by-bit by their own financial discipline. Most Thai entrepreneurs ran into problems because they were encouraged to borrow or to expand beyond their capacity. Handing out money to farmers or encouraging them to increase their debts was a prescription for disaster, he said.