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Debate puts spotlight on ex-PMs

 

A ''tale of four leaders'' who took turns at the country's helm from the day the economic bubble formed to the day it burst and until the current painful surgery, is put under a magnifying glass during the on-going censure debate. Thanong Khanthong reports.

Out of sheer self-mockery or rather self-pity, Gen Chavalit Yongchaiyudh painted himself into a corner yesterday by lamenting that it could be the first time in Thai history that a parliamentary debate turned into a no-confidence grilling of the opposition leader.

In his opening debate that set into motion a two-day politics-as-usual sideshow, Chavalit immediately faced a boomerang effect from his attempt to paint a grand picture showing that the seeds of the economic disaster could be traced back to the 1992-1995 records of Prime Minister Chuan Leekpai and his economic czar, Finance Minister Tarrin Nimmamahaeminda.

Chavalit, who appeared to be more coherent than in his standard oratorical performances, thought that he had staged the best parliamentary performance of his political career, with research back-up to substantiate his claim that the Chuan I administration's financial and economic liberalisation, particularly the ill-conceived offshore banking provisions under the guise of the BIBF, was the genesis of the economic bubble.

In return for all the blame, if not-quite unfair criticism of the economic mismanagement of his 11-month administration, Chavalit also thought that his presentation should serve enough justice by humiliating Chuan and simultaneously taking away Tarrin's pride. After all, under this same Siamese sky, nobody should be better than anybody else.

But Chuan and Tarrin, in that hierarchical order, rose to defend their records and responded to Chavalit in kind words that made the retired general and former prime minister squirm in his seat. Always polite in appearance, Chuan let his razor tongue do the killing.

In his reply to Chavalit's charges that Chuan's US trip was marred by self-condemnation, without conceding that the liberalisation policies back in the first half of the 1990s were the root of the problem, Chuan said: ''I would like to say that Gen Chavalit's remark was not relevant to the truth. When I admitted (during my presentation in New York) that we had problems, I meant that, as a country in Southeast Asia which had enjoyed an economic miracle, we then suddenly faced a reversal of conditions and became a country in crisis. From a country with a positive outlook, we became beset with ill forecasts.

''I had to tell them about our weak points. We had to tell them the truth. If there was nothing wrong with us, then why were we faced with the crisis. I told them that we had liberalised our economic policies but that we had failed to put in place the measures to instil discipline.''

It was this narrow ''blame-the-other-governments'' theme that marked the no confidence debate, which also saw some heated exchanges between the Chat Pattana Party and the Social Action Party on the sugar issue. No matter how the blame was passed about, it hit the four past and present prime ministers, who all happened to be in the same honourable chamber. Both Chatichai Choonhavan, the Chat Pattana leader, and Banharn Silapa-archa, the Chat Thai leader, listened on while Chavalit and Chuan traded charges.

Banharn did not speak yesterday, but Chatichai stood up to protest against Social Action Party leader Montree Pongpanit, who earlier defended the SAP's action for joining the Chuan government as a decision to ''save the country from disaster''. Montree quipped: ''My decision might affect an old man like Lt Gen Chatichai, who aspired for the premiership. But for the sake of the nation, I had to help.'' Chatichai being Chatichai, he laughed at Montree's comment.

The emotional Chavalit, of course, would like to rewrite the history of his ill-fated administration, during which time the government went broke with its Bt1.1 trillion bail-out for the insolvent finance companies and banks, and the Bank of Thailand squandering of US$39 billion in foreign exchange reserves in a defence of the baht that eventually turned Thailand into an insolvent nation. He tried to argue that when he took over, the infection had already set in.

Chuan said that if the central bank's foreign exchange reserves had not been depleted, Thailand would not have had to seek a bail-out from the International Monetary Fund. It was this fact alone that Chavalit found hard to swallow.

The Chuan I administration saw a build-up of capital inflow, the short-term ''hot'' money that laid the seeds of the crisis. But confidence was so strong that the foreign creditors kept on lending Thailand the money that would later transform it into an over-invested country. At that time, nobody believed that Thailand could be the next Mexico.

Chavalit inherited the damaged economy from Banharn, who did plenty to accelerate the disaster. In the total absence of macroeconomic prudence, Banharn adopted an expansionary budget policy at a time when Thailand was facing growing pressure from the current account deficit and falling export revenues to pay for the foreign debts. He ignored stability to achieve an economic growth rate of 8 per cent, at the expense of a current account deficit of 8 per cent of the gross domestic product.

The Bangkok Bank of Commerce scandal broke out and dealt a further blow to confidence in Thailand's ability to put its financial house in order. When exports plunged to a zero growth rate in 1997, foreign investors had little confidence left in the Thai economy, sparking off a baht attack and an outflow of capital to put pressure on the currency and the domestic liquidity supply.

Banharn was lucky to have left office, through a coalition coup, before he could witness the economic disaster. When Chavalit came to power in November 1996, the economy had already crashed. It would hit rock bottom in 1997 with the collapse of the financial system and the depletion of the foreign exchange reserves. All this time, Chatichai, who wanted to take a second turn as prime minister, took advantage of the opportunity, as the second largest coalition partner in the Chavalit administration, to create an image of a shadow prime minister.

The four former prime ministers yesterday showed off their different motives as they faced, or tried to forget, the reality of why Thailand went from a miracle economy to a wrecked economy.

 

 

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