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Somkid's 'rivals' never in running

February 13, 2001

THE "long, tumultuous search for a finance minister" never took place. As far as Thaksin Shinawatra was concerned, it all began and ended right with Dr Somkid Jatusripitak, his right-hand man and an architect of Thai Rak Thai's landslide election victory.

But it was politically necessary for Thaksin to create a thick smokescreen surrounding his choice of finance minister. From the outset, he pledged to manage the country as a business enterprise and at one point hinted he might concurrently take over the Finance Ministry portfolio.

Then he said he would become the nation's chief executive officer (CEO), with the finance minister under his government acting as a chief financial officer (CFO). It followed that public expectations - in contrast to those surrounding the Chuan government - would not build around the finance minister, since the CEO would call all the key shots in terms of economic management.

Secondly, there was the delicate issue of MR Chatu Mongol Sonakul, the Bank of Thailand governor. Chatu Mongol had been tipped to join Thai Rak Thai as finance minister. His defection from the Democrats, who handpicked him in the middle of 1998 to become central bank governor, added to the credibility problem of the Chuan government. Chatu Mongol drew blood from the Democrats when he declared war against the Finance Ministry over a series of issues.

After engineering a reorganisation of the central bank, Chatu Mongol privately told his colleagues he would resign from the central bank some time in September 1999 to enter politics. The governor had earned Thaksin's respect, having established a good reputation in the international community.

Yet, for Thai Rak Thai, there were risks in appointing Chatu Mongol as finance minister - what if the party could not control the idiosyncratic governor? Thaksin's management style would not tolerate any deviations from the party line.

Chatu Mongol was asked to stay on at the central bank late last year when, as the country headed toward the January 6 general election, he should have been at the top of Thai Rak Thai's party list. The reason given to him was that should he leave the central bank, the Democrats might appoint a candidate of their own. Any move should come after a Thai Rak Thai victory in the election. Chatu Mongol bided his time at the central bank: He would wait for the finance job. But the formal invitation never came.

Thirdly, Thaksin needed to float the names of all the big outsiders on the Thai financial scene to create the impression the eventual winner would be drawn, at his will, from a pool of qualified candidates. These distinguished names included Dr Virabongsa Ramangkura, MR Pridiyathorn Devakula and Dr Kosit Pampiemras.

Virabongsa, a famous IMF-basher and conservative macroeconomist, was ruled out from the beginning because he criticised Thaksin's populist agenda. Moreover, he did not share the core philosophy of Thai Rak Thai. Still, he cast his shadow over the party's economic thinking, from boosting domestic-led growth; easing rules and regulations to keep Thai banks and enterprises moving; and keeping the baht competitive to bolster exports; to safeguarding Thai interests against the onslaught of foreign domination.

Maverick Pridiyathorn, the president of the Export and Import Bank of Thailand, was never an ideal candidate. But his name cropped up from time to time in the local newspapers. His experience was confined largely to the modern sector of banking, whereas the task of the new finance minister will encompass the incorporation of social policy to upgrading the living standards of the people through the populist programmes bankrolled by the Finance Ministry.

This brought the final choice of an outsider to Kosit, the executive chairman of Bangkok Bank and a veteran in development economic planning. Of all the candidates, Kosit's background at the National Economic and Social Development Board came closest to sharing Thai Rak Thai's populist policies. But Kosit was a fiscal conservative. It was uncertain whether he would go along with the massive fiscal commitment necessary if Thai Rak Thai was to fulfil its campaign pledges or to pump up the economy, given that public-sector debt was soaring to 60 per cent of gross domestic product.

Another reservation held by Kosit was that he would be deprived of a fat private-sector salary and bonus from Bangkok Bank if he left to become finance minister. The law prevents the finance minister from holding a private-sector job for at least two years after leaving public office.

Fourthly, the smokescreen surrounding his selection of the finance minister kept the spotlight firmly on Thaksin as he went about consolidating his political bargaining power. First and foremost, he needed to be catapulted into becoming Thailand's 23rd prime minister. If he revealed his choice of finance minister, it would disrupt his deal cutting of Cabinet portfolios with the coalition partners and with his own party members. Besides, Somkid, if his name was made known prematurely, would steal the whole show, since all eyes were on this most important post following the premiership.

Fifthly, Thaksin would need a man in whom he could put all his trust to help him as he was about to stand trial before the Constitution Court over allegations that he concealed assets while serving as deputy prime minister in the Chavalit Yongchaiyudh government. Tax and securities laws under the jurisdiction of the Finance Ministry would be involved in the case, which would be weighing heavily on his mind over the next several months. This made it unlikely that he would rely on an outsider as finance minister to prepare a legal defence.

Finally, it is Thaksin's style to reward his top people. In the end, it could have been nobody else but Somkid, because his task would ultimately be to implement the populist policies of Thai Rak Thai. Legislation would have to be introduced to fulfil the campaign pledges of the Bt1 million village funds, the People's Bank, the debt-suspension programme for farmers, and the national asset-management corporation.

Somkid would be responsible for this tremendous job. If not him, who?




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