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CEO Thaksin grabs the reins

October 11, 2001

If Prime Minister Thaksin Shinawatra is the chief executive officer of Thailand Inc, then Finance Minister Somkid Jatusripitak is the chief financial officer, whose appointment to the parallel post of deputy prime minister on Tuesday represents a consolidation of Thaksin's power.

"The Prime Minister still has 1,000-per-cent confidence in Khun Somkid," said a senior member of the Thai Rak Thai Party.

The Cabinet reshuffle has enormously increased the power of Somkid, who, apart from looking after the Finance Ministry, will have a direct oversight of the Commerce Ministry, the Agricultural Ministry, the Industry Ministry and the Tourism Authority of Thailand. But with Somkid operating in his shadow, it will be Thaksin who will call the shots by exercising his power through his most trusted aide.

"As deputy prime minister assigned to oversee economic areas, Somkid will work to his full capability," Thaksin said.

Political sources said Thaksin found it necessary to focus his energy on tackling the pressing economic problems, which have been aggravated by the September 11 terrorist attacks on America. But he is unhappy about the lack of coordination between Cabinet members, and the slow progress in implementing government policy.

Thaksin has handed over the education portfolio, which he held concurrently for the past four months, to Suwit Khunkitti, so he can concentrate on economic issues. With Somkid taking charge of all strategic economic agencies, Thaksin is now in a position to centralise economic policy in a hands-on fashion.

"The prime minister will now have time to go after each economic issue and make sure that it is implemented in a timely fashion," said one political source.

Political "spin" appeared to be in evidence in the week leading up to the Cabinet reshuffle. Somkid signalled that he would like to leave the finance portfolio to become deputy prime minister, a move he said would allow him to focus on the broader economic picture.

On Sunday, Somkid met Snoh Thienthong, who leads a powerful faction within Thai Rak Thai, to inform him of his impending appointment as deputy prime minister. Somkid told Snoh that he was "tired" of the finance portfolio and would like to concentrate on the broader issues. Snoh tried to stop Somkid's from resigning his finance portfolio, saying it would not bode well for the government in midstream.

Some political sources interpreted Somkid's move as an attempt to create a "smokescreen", sensing that he had no intention of giving up his finance portfolio. They said Somkid was afraid that he might upset many Thai Rak Thai members by simultaneously holding on to two Cabinet portfolios.

Thaksin will now attempt try to keep intact his ministerial team until at least next February, when his government will have completed its first year in office, before considering any major Cabinet shake-up.

However, apart from other pressing economic issues, Somkid will face the difficult task of bringing investment back to its customary level, thus ensuring that the economy is back on track for an annual growth rate of 4 to 5 per cent.

Private investment, which collapsed in 1997, has yet to recover. It used to reach Bt250 billion a quarter, but now averages only a third of that, Bt80 billion to Bt90 billion a quarter. Somkid's predecessor, Tarrin Nimmanahaeminda, worked hard to restore private investment, the key to economic recovery, although his efforts were, in the end, to no avail.

Economist Ammar Siamwalla has warned that if private investment is left unattended, it could create instability in the near future.

In order to bring private investment back to its normal level, Somkid will need to tackle reforms in the financial and corporate sectors, and strengthen the legal infrastructure to make Thailand more attractive for foreign investment, and to improve corporate governance.

Thanong Khanthong



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