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  January 05,  

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Special Reports

Even if he wins, Thaksin could be a loser

By Tony Allison

  1. The man who would be prime minister
  2. Political landscape
    Political violence
  3. The parties
    The Democrat party
    Thai Rak Thai
    New Aspiration
    Chat Thai
    Chat Pattana
    Prachakorn Thai
    The Seritham Party
  4. Economic policies
1. The man who would be prime minister
The choice of Thailand's next prime minister lies not in the hands of the country's more than 40 million voters, but with the 15 judges of the Constitutional Court who are due to rule on the eligibility of the leading candidate, Thaksin Shinawatra.

Billionaire telecom tycoon Thaksin and his fledgling Thai Rak Thai (Thai Unity) party are frontrunners to win a sufficient majority in the January 6 Lower House elections to form the core of a new coalition government. The out-going ruling Democrat Party of Chuan Leekpai is trailing well behind in the polls.

However, in late December the National Counter Corruption Commission (NCCC) ruled that Thaksin had evaded a legal requirement to reveal all of his assets while serving in a previous government in 1997. The NCCC is the cornerstone of Thailand's attempt to eradicate corruption from politics.

The NCCC said Thaksin concealed millions of dollars in stocks under the names of his maid, driver and security guard to hide ownership of 17 companies, to avoid paying taxes and to manipulate share prices.

Thaksin's case has been forwarded to the Constitutional Court for final judgment. If the ruling is sustained, he will be banned from holding public office for five years. This could effectively mean a stint in the wilderness of two years as the ruling would be retroactive to the time of the indiscretion.

It is unlikely the a decision will be reached before the election date, although it could come before the 30-day deadline following the polls when the new Lower House, under the constitution, must convene. The House then has another 30 days in which to name a prime minister.

The Constitutional Court will focus on two key issues:
* The validity of the indictment by the NCCC, given that the law states that the NCCC has to complete its investigation of politicians within two years of them leaving office. Thaksin left political office in 1997 (he was a deputy prime minister in the Chavalit Yongchaiyudh government)
* The credibility of the NCCC indictment given that some members of the NCCC have violated the ban on holding shares in private entities. Preeya Kasemsan na Ayutthaya, the head of the NCCC sub-committee which led the investigation of Thaksin's asset declarations resigned after admitting to holding shares in a private enterprise.

To date, the Constitutional Court has upheld every one of the NCCC's findings.

Public statements from Thaksin strongly illustrate he will not easily give up his unabashed aspirations to be Thailand's 51st prime minister. Insiders have even hinted that should the Constitutional Court ruling go against him, he might attempt to defy it.

The local Thai media has been outspoken in calling on him to quit now and hand over to one of his deputies, such as Uthai Pimchaichon or Purachai Piamsomboon.

2. Political landscape
Although Thailand is a constitutional monarchy, real power lies in the hands of a democratically elected government led by a prime minister. The National Assembly consists of an elected 200 seat Senate (Upper House) and a 500 seat House of Representatives (Lower House).

Since World War II, Thailand has alternated periods of democratically-elected civilian governments with authoritarian rule brought about by coups. The military last seized power in 1991, but after middle-class protests and royal intervention, civilian rule was restored in 1992. Since then, the military has adopted a low profile.

Because Thailand has so many political parties, each civilian government has been a multi-party coalition easily destabilized by disagreements between the parties. The outgoing government will be the first to complete its full term since 1992.

Elections for the country's first elected Senate were held in March 2000, but the Senate was delayed in takingoffice due to additional rounds of elections brought on by repeated electoral law violations.

With the exception of the Democrat Party, Thailand's oldest organized political party, and latterly Thai Rak Thai, parties tend to be centered on individual personalities rather than ideologies. All, however, accept working within a framework of democratic principles and free enterprise economics.

Frequent changes in government generally have not affected the country's overall stability, largely because policies, for the most part, are designed and executed by a generally professional bureaucracy.

Reforms mandated by Thailand's 1997 constitution, including the establishment of a National Counter CorruptionCommission (NCCC) and a new national Election Commission, (EC) have helped Thailand move toward a more transparent and open system of government. The EC has sweeping powers to check electoral fraud.

The January 6 poll, seen as a two-horse race between Thai Rak Thai and the Democrats, is the first Lower House election to be held under the constitutional reforms. New methods of vote-counting, a massive security presence, a change to a first-past-the-post system and a new ballot sheet are all designed to minimize vote tampering and fraud.

Voters are to choose a new 500-member parliament to replace the dissolved 391-member House. Like its predecessors, the House is scheduled to have a four-year lifespan. Four hundred lawmakers will be chosen from single seat constituencies, while the other 100 will be elected by a system of proportional representation according to the percentage of votes polled by each party in the country.

Any political party that fails to win the equivalent of 5 percent of the total number of votes cast will automatically lose its right to nominate its party-list MPs. The total number of party-list votes, excluding those cast in favor of parties winning less than 5 percent of votes, will then be used to calculate the number of party-list MPs the rest of the political parties will receive.

More than 2,700 candidates have registered for the 400 single seat constituencies, while each party was allowed to nominate up to 100 people on their party lists. A total of 43 parties have registered and over 40 million people are eligible to vote.

Political violence: At least 18 people have been killed and scores injured in election-related shootouts since November 9. Some 130,000 policemen have been deployed and the military is on standby. Hundreds of grenades, rifles and pistols have been seized, and more than 200 politicians have asked for police protection.

Vote-buying mushroomed during the country's economic boom in the 1980s. The depressed economy is expected to make parliamentary seats more valuable because they are perceived as an easy route to riches.

The Nakhon Ratchsima Rajabhat Institute, which has been studying the extent of election fraud, estimates that at least US$460 million in bribe money will circulate nationally during the campaign.

The Election Commission has already disqualified three parliamentary candidates for vote buying and will likely ban scores more for offenses ranging from doling out cash and other inducements for votes; spending over the campaign limit and using violence or intimidation to sway voters.

In one of the amended electoral rules, the EC is empowered to issue a red card, expelling candidates from the polls, hence doing away with the cumbersome procedure of holding repeated rounds of voting to resolve contested results.

On the basis of reports leaked by electoral officials, the EC may issue up to 120 red cards, mostly to Thai Rak Thai candidates, followed by Chat Pattana and the Democrats.

3. The parties
Out of the 43 parties that have registered for the elections only a handful have a realistic chance of securing sufficient votes to have any effect on the outcome, if at all. Thai Rak Thai party is tipped to win about 180 of the 500 parliamentary seats followed by the Democrats with 125 or so seats.

The three medium-sized parties, Chat Thai, Chat Pattana and New Aspiration, are expected to take about 50 seats each and the remainder to be shared among small parties.

By such projections, Thai Rak Thai will have a mandate to be the core party in the next government. The support of smaller parties in Thailand's fragmented political arena, where loyalties can swiftly change, is vital in forming coalition governments. Invariably, no single party wins an outright majority.

Given Thaksin's problems, the prospect of either Banharn Silapa-archa of Chat Thai or Chavalit Yongchaiyudh of the New Aspiration Party demanding the post of prime minister as a pre-condition for joining hands with Thai Rak Thai in forming a coalition is no longer unthinkable.

Since joining with the Democrats is highly unlikely, Thai Rak Thai needs the support of these smaller partners to be assured of the seat of power.

Consequently, the country faces the possibility of having the old guard, identified with money politics and the patronage system, back in power, despite the best intentions and efforts of the NCCC and the Election Commission.

The Democrat Party led by Chuan Leekpai. Victory for the Democrats would give them - and Chuan - a third term in office in the past eight years. The first term, which lasted from September 1992 to May 1995, ended in humiliating circumstances over illegal land deals brokered by Suthep Thaugsuban, the Minister of Transport and Communications in the most recent government.

Chuan's second term as prime minister started well following the collapse of the Chavalit Yongchaiyudh administration in November 1997. He helped restore stability to the country following the crippling financial crisis that broke in mid-1997.

However, a falling currency, a spiralling stock exchange, high public debt and stubborn non performing loans have eroded confidence, especially among farmers, who comprise up to 60 percent of the population. Opinion polls say voters are likely to punish the Democrats over such post-meltdown measures as selling off national banks and companies. Opposition parties have struck a nationalist chord by accusing Chuan of mortgaging the country to foreigners.

While the Democrats have traditionally been perceived as the most honest of Thai politicians, several members have recently been linked to shady deals. Once again, Suthep has been linked to abuse of funds in setting up a co-operative in his southern constituency of Surat Thani.

Also, the disqualification in March of the influential Interior Minister Sanan Kachornprasart for five years from politics severely dented the party's image. Sanan became the first victim for the NCCC when it found him guilty of concealing assets. Nevertheless, Sanan, who is the undisputed kingmaker in Thai politics, is likely to still wield considerable influence behind the scenes.

Democrats are often perceived as arrogant and insensitive to the poor and Chuan has also lost support for failing to punish corrupt members of his own government.

The Democrats are pinning hopes on delivering the majority of Bangkok's 37 parliamentary seats, a crucial indicator of middle class support. They have also been rallying the faithful in their stronghold in the South.

Internal bickering has not helped the party's cause. At the December announcement of the elections, prominent members of Chuan's economic team refused to run for another term. Deputy Prime Minister (and Commerce Minister) Supachai Panitchpakdi said he would not run, saying he wanted to prepare for his term as head of World Trade Organization. Deputy Finance Minister Pisit Lee-atham also indicated he would quit politics.

The Democrats have benefited from the cloud hanging over Thaksin. Dissatisfaction with Thaksin and doubts that the Thai Rak Thai might not be as effective should he be forced to quit, have translated directly into support for the Democrats.

The Thai Rak Thai Party, led by multi-billionaire Thaksin Shinawatra. The party is a newcomer to the political scene, having been formed as a vehicle for the oft-expressed desire of Thaksin to become prime minster.

Since its inception, Thai Rak Thai has promised to make a difference by injecting new blood into politics and by introducing sweeping economic policy changes.

It has succeeded in attracting more than 100 MPs from the dissolved parliament, allegedly offering them inducements of millions of baht each to switch allegiances.

Thaksin has endeared himself to the rural vote (but not to economists) by promising a three-year debt moratorium to farmers and by handing out one million baht to all of Thailand's 70,000 villages.

Thai Rak Thai has also boosted its chances upcountry through defections by members of the New Aspiration Party, Chat Thai and other smaller parties. Behind the promises, though, doubts remain over whether Thaksin can deliver.

There is no doubt Thaksin has proved himself as an excellent businessman by making his Shin Corp the Kingdom's media and technological giant. Detractors will argue, however, that this success was based on the former military man being able to secure lucrative monopolistic contracts with the government.

If elected, he promises to act like the country's CEO - just call it Thailand Inc - and inject into the government his business and professional prowess. But critics point out that his public service records are nothing to boast of. He is haunted by his brash statement in an earlier tenure in office as a deputy prime minster that he could solve Bangkok's traffic problems in six months. Nothing of the sort happened.

And of course, the debacle of his transferred assets, which has raised concern over his claims of an honest and transparent administration. (See above).

The New Aspiration Party led by Chavalit Yongchaiyudh. The former prime minster has a huge credibility gap to overcome following his resignation amid accusations of grossly mismanaging the Thai economy during the onset of the 1997 economic crisis.

His publicity is not helped by his deputy party leader, Chalerm Yubamrung, who has an abrasive style - as do his two sons, who are also running for parliament.

More important was the defection of 46 party members, a faction known as the Wang Nam Yen group, to Thai Rak Thai. This was seen as a serious blow to the party as the group regards a big part of the Central Plains as its stronghold.

Despite this, Chavalit is putting on his usual confident. He has a strong and loyal backing in the Northeast, which will ensure that a number of NAP members are elected. This will allow him to once again negotiate for some prominent cabinet portfolios in any coalition.

The NAP has said it is willing to join a Thai Rak Thai-led coalition regardless of Thaksin's fate.

The Chat Thai Party led by Banharn Silapa-archa. In his brief tenure as prime minister in 1996, Banharn's legacy included a failing economy, infrastructure in his home province Supan Buri that is the finest in the land, and a graduate degree thesis that was the laughing stock of the academic world.

To international observers and the majority of Bangkok's middle class, Banharn is no more than a provincial politician, short in stature and vision. But to other local politicians, he's a force to reckon with, especially in the old government-forming process where alliances count for everything.

Chat Thai is all about Banharn, his relatives and very loyal comrades, who command a large following in the Central Plains and the Northeast. The wily Banharn and Chat Thai have always managed to forge alignments which landed them important ministerial portfolios.

In the days leading up to the election reports have been widespread that he has been in close contact with Thaksin, who would like Chart Chai as his preferred partner.

Chat Pattana led by Korn Dabaransri . While the odds are low that the party will beat the Democrats or Thai Rak Thai, Chat Pattana has steadily built its supporter base in the hope of swinging the tide. Korn and his deputy, Suwat Liptapallop, are the driving forces of Chat Pattana.

Korn has taken the line that he is ready for the premiership, portraying himself as a new-generation politician and a visionary. HIs leadership skills are a source of doubt, however as most of his government portfolios have come from political arrangements rather than his talents.

Korn has said that if the Election Commission disqualifies too many candidates it could spark a coup. In late November, army commander-in-chief General Surayud Chulanont revealed that some officers were advocating a power grab to forestall what they see as a tainted election that will only produce another corrupt and ineffective government.

Korn has been particularly vocal in calling on Thaksin to throw in the towel before the elections in the "national interest" and is seen as an unlikely partner for Thaksin.

Prachakorn Thai led by Samak Sundaravej . Prachakorn Thai once dominated Bangkok, so much so that its feisty battle-scarred leader has often been tipped as a prime minister. But in the last few years the party has lost its firepower and manpower with members defecting to bigger parties in search of more secure (and lucrative) political careers.

Samak's landslide win in the Bangkok governor's race this year - against a Thai Rak Thai candidate - saved the rightwing party from possible extinction after nearly two decades.

On becoming governor, Samak tried to anoint a successor and several high-profile politicians were canvassed. However, party officials say Samak's grip on Prachakorn Thai is so strong it would be virtually impossible for a new face to lead effectively.

The new electoral process will make it difficult for small parties like Prachakorn Thai to survive.

The Seritham Party led by Prachuab Chaiyasan . Among the smaller parties, Seritham has been the most unequivocal about its political principle, saying it will not merge with any party.

Seritham was at the center of controversy when Prachuab quit his university affairs portfolio with the Chart Pattana Party to take up leadership at Seritham. Prachuab's move didn't sit well with former Chart Pattana friends and allies.

Other parties include the Social Action Party, the Solidarity Party, Palang Dharma (to which Thaksin formerly belonged), the Rassadorn Party and the Thai Motherland Party.

4 Economic policies
Opponents of the Democrat government have made much of what they see as shortcomings in economic policy. The economy, therefore, and how and who will run it, have received much attention.

If a Democrat-led coalition triumphs, most analysts expect previous Finance Minister Tarrin Nimmanhaeminda, who enjoyed a broad mandate and a measure of independence under Chuan, to remain in the job.

Should Thai Rak Thai lead a coalition, current central bank governor Chatu Mongkol Sonakul has been frequently mentioned as a contender.

Other names mentioned include prominent bankers Kosit Panpiemrat, head of Bangkok Bank, and Virabongsa Ramangkura, a leading economist.

The Thai Rak Thai and the Democrats outlined their platforms at a recent forum held by the Stock Exchange of Thailand (SET).

Thai Rak Thai
The Thai Rak Thai's main policies concerning the financial sector are:
* Setting up a national asset management company (AMC) to centralize management of non performing loans by buying them all out of the system at one time. No details were given at the seminar as to how this would be implemented, particularly in terms of their pricing, accounting structure of the AMC, or staffing of the AMC.
* Bringing all state-owned enterprises to list on the SET. Thaksin says this could raise the SET's market capitalization by three trillion baht.
* Financial institution reforms would include:
- Restructuring of the Bank for Agriculture and Agricultural Cooperatives to act as a development bank
- Forming a people's bank to lend money to smaller borrowers
- Forming a small to medium-sized enterprise bank that would focus on lending to SMEs.

The Democrats
* The Democrats stressed the importance of continuing their current policies, and reiterated their concept of government support to financial institutions in conjunction with private asset management companies (that is, a series of privately-run AMCs such as those established by Thai FarmersBank, rather than one national AMC).
* The Democrats also believe in privatizing SOEs, but prefer a slower pace than the Thai Rak Thai is advocating.
* The SET would focus more on marketing, leaving the regulatory role to the Securities Exchange Commission (SEC).
* New capital market instruments would be created to facilitate the needs of investors
* Pursuing a low-interest rate policy to boost the economy and help corporate debt restructuring
* Reduction of corporate tax from 30 percent to 25 percent within the next four years
* Running a fiscal deficit over the next few years.

(Special to Asia Times Online)


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