Nukul group ready with 'dynamite'
AFTER about three months of in-depth investigation, the Nukul Commission will today submit to the finance minister a ''dynamite report'', as one commission member put it, on the Bank of Thailand's mismanagement of macroeconomic policy, the financial system and the foreign exchange reserves that have resulted in economic and financial upheavals.
Nukul Prachuabmoh, the former Bank of Thailand governor who chaired the commission, is reported to have devoted his energy and time to putting the final touches on the long-awaited 200-page report. He and other commission members hope the report will serve as a lesson for Thais in general and the Bank of Thailand in particular so that this painful episode does not happen again.
''It is a suffering for the whole nation,'' a source quoted Nukul as saying when he was asked to sum up the findings of the report. Later Nukul said: ''It was a pain and an embarrassment for the nation, whose record of failures will go down in the history books forever. I hope the report will be an interesting read.''
A member of the Nukul Commission would not divulge the contents of the report but said it was going to be ''dynamite''. However, he added it would provide detailed accounts of mistakes made over the past five years as Thailand took a roller-coaster ride into becoming a bubble economy -- the misallocation of resources and the mismatch of funding between short-term foreign debts and poorly judged domestic long-term loans and most importantly the failure of the central bank to rid itself of political interference.
''If politicians can tell the central bank what to do, then that's the end of it,'' said the commission member.
Thailand's economic and fiscal crisis was home-grown, incurring from a group of 20,000 people in high-flying positions in the financial industry who doubled the country's foreign debt in five years -- from US$43.6 billion in 1992 to US$90.5 billion in 1996.
''It was a simple mismatch of funding that they taught in the textbooks for more than 50 years,'' said the commission member. ''In the good times, these [20,000] people got richer and had some Bt100 million or Bt1 billion in their bank accounts. In these bad times, they might be poorer but they have dragged 60 million Thais down with them.''
The report will also sum up all the central bank personalities who were involved in the management of macroeconomic policies but will refrain from pointing a finger at anybody. The Nukul Commission intends the finance minister or the public to judge for themselves in the event that the report is made public. The report will also provide recommendations on how to make the central bank into a credible and more effective institution.
A source said Nukul had told Tarrin that it depended on the finance minister whether or not make the report public or share it with the Cabinet. ''But if you choose to disclose it, you should disclose all of it,'' Nukul was quoted as telling the finance minister.
The commission member noted that the current crisis came about because Thais did not know how to follow their duties. ''They know their rights but they don't know their duty,'' he said. ''The Thais may know how to learn, but they don't know how to think. If they knew their duty or knew how to think, the problems would not have occurred.''
However, the commission member expressed his concern about public disclosure of the report saying people could get emotional about it and demand retribution. During these turbulent times, when the recession is not expected to bottom out until the third quarter of this year, it is necessary to save the central bank and keep its functions since Thailand is still on thin ice, he said. The restoration of foreign investor confidence is of utmost importance if Thailand wants to survive the economic crisis, he added.
''Were the Thai Farmers Bank to go under, Thailand would still survive. But the country could not survive if we didn't have the Bank of Thailand,'' he said.
BY VATCHARA CHAROONSANTIKUL and THANONG KHANTHONG