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Tarrin's falling out with Chat Pattana


February 3, 1999: Thanong Khanthong examines the growing problems between Finance Minister Tarrin Nimmanahaeminda and the Chat Pattana Party.

Finance Minister Tarrin Nimmanahaeminda need only read Dr Narongchai Akrasanee's book ''Dern Klaang Fon'' (''Walking in the Rain'') to understand the recurring Machiavellian history of the Chat Pattana Party.

Immediately after Tarrin closed his defensive remarks in the no-confidence motion against him on Friday, Sunai Chullapongsathorn, Chat Pattana's deputy secretary-general, came out with a spirited threat. He said he and some members of Chat Pattana might not vote for Tarrin because they were not satisfied with Tarrin's clarifications and his handling of the economy. Sunai charged that Tarrin's fault lay in his preoccupation with tackling the financial sector at the expense of the bread-and-butter real sector.

Indiscreetly, Chat Pattana had been waiting for the right time to strike, and it took advantage of Tarrin's foot-dragging performance in the censure debate to maximise its leverage. The main item on Chat Pattana's agenda is to help out big business. The party would like Tarrin to push through the Bt5-billion fund to help cash-strapped small and medium-sized enterprises (SMEs) and to whip the Krung Thai Bank into extending Bt10 billion to the SMEs. Chat Pattana has also made it known that its policy is to support price intervention in agricultural goods, balance out deposit and lending rates and promote investment and industrial expansion to jump-start the economy.

After Chat Pattana joined the the coalition government in October last year, its leader, Korn Dabaransi, demanded a say in running the economy. Korn made a proposal that a mid-week session should be held so that Tarrin could share his game plan with Chat Pattana every step of the way, but Democrat Savit Bhothivihok, the PM's Office Minister, succeeded in talking Korn into staying put because if Korn and his Chat Pattana members had any queries they could always make their case at the Council of Economic Ministers meeting held every Monday morning.

It was indeed Tarrin who played a vital role in bringing in Chat Pattana to strengthen the stability of the coalition government and to pass the crucial 11 economic bills which include bankruptcy and foreclosure legislations. With Chat Pattana's 51 votes, the coalition government's block in Parliament increased to a comfortable majority of 254 out of the total of 385.

In any event, one of the key members of the Democrats then did not agree with the hasty move to bring in Chat Pattana, warning that by so doing the Democrats would have little political leeway to manoeuvre themselves for they would have played their trump card. Moreover, if there arose any trouble with Chat Pattana, it would be Tarrin who would bear all the peer pressure from Korn and Co, the Democrat member added.

That prophecy is about to be tested. Growing doubts about the efficacy of Tarrin's medicines to cure the Thai economic malaise will likely lead to diminishing authority for Tarrin, possibly bringing some shake-up in the nation's economic management. There are signs of trouble brewing which may jeopardise the structural reforms necessary for Thai economic recovery. For the reform efforts to succeed, Tarrin needs the support of Prime Minister Chuan Leekpai and the Democrats, their coalition partners, including Chat Pattana, and the general public.

Chuan has made it clear that he and the Democrats still support Tarrin, although the finance minister will need to improve himself by listening more to other people's opinions or toning down his inflexibility. Chat Pattana, which has been strangely behaving like a good boy, is expected to demand more economic power-sharing, which will complicate the implementation of the economic-reform programme. The public is uneasy with the slow pace of economic recovery, and many are likely to lose patience because they don't want to bear the pain any longer.

Narongchai's ''Walking In The Rain'' points out clearly how the short-lived Chavalit government, which was in power between November 1996 and November 1997, had difficulties in implementing economic policies due to the presence of Chat Pattana at a time when the country was edging towards crisis point.

With the political charisma and influential power of the late Lt Gen Chatichai Choonhavan, Chat Pattana wielded enormous political power during the premiership of Gen Chavalit Yongchaiyudh. During that time Thailand's source of ultimate political power was a triangular set-up: the Cabinet; the Baan Phitsanulok headed by Dr Surasak Nananukul, who advised Chavalit; and the Baan Manangkhasila led by Chatichai himself. These three institutions lacked co-ordination and often clashed with one another.

''With this management structure, there was no doubt that when there were crucial economic decisions to make, a lot of serious problems would follow,'' wrote Narongchai, who served as commerce minister and part of the Economic Dream Team.

It was not clear, either, who was in charge during the Chavalit government, Narongchai added. Chatichai succeeded in creating the public image that he was a ''second prime minister'', and he enjoyed wielding his political power, exercised both in the Baan Manangkhasila and at his Rajakhru home, where he held important meetings and issued key economic policies. Chavalit was obligated to kowtow to Chatichai by visiting the Rajakhru residence to attend these sessions. When Narongchai, during his address to the members of the Foreign Correspondents Club, dubbed Chatichai the ''Big Advisor'' owing to his immense political power, Sunai came out and lambasted Narongchai for dishonouring Chat Pattana's leader.

Korn, then a deputy prime minister and industry minister, also ruled an empire of his own, rivalling the economic team of Dr Amnuay Viravan, the then finance minister and head of the Chavalit government's economic team. In practice, Amnuay could not implement several of his policies owing to his conflict with Korn. Korn's veto of Amnuay's proposal to slap an excise increase on batteries, granite and two-stroke motorcycles was one of the things that led to Amnuay's resignation.

Dr Thanong Bidaya, Amnuay's successor, was another political victim when Chavalit was forced to reverse the Cabinet policy on oil-tax increase as part of the fiscal consolidation. In the waning period of the Chavalit government, Chat Pattana's say in economic matters was enormous. Executives of the ailing finance companies also lobbied Chat Pattana intensely for their companies not to be closed down by the regulators.

So if history is any guide, Tarrin should find it more useful than economics in the art of political survival.



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