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Friday, Aug. 3, 2001

The Thai dilemma: ethics or stability?

As court decides Thaksin's fate, it is also testing the constitution

Special to The Japan Times

BANGKOK -- Is Thailand's prime minister Thaksin Shinawatra just an entrepreneurial businessman in a hurry, anxious to bring to the country the same benefits that he won in the telecom business, where he became a U.S.-dollar billionaire and very quickly, one of the world's richest 500 people? Or does he just love power so much that he will do anything to keep it?

Bangkok's newspapers and political circles were full of both claims in late May when the prime minister abruptly sacked the respected governor of the Bank of Thailand Chatu Mongol Sonakul. Supporters of Thaksin claimed that the central bank governor had to be removed because he did not support raising interest rates, which the government believes is a way of getting the economy moving. Chatu Mongol had fought fiercely for the independence of the central bank and had also clashed with the previous government of Chuan Leekpai.

Some critics of the governor said that his problem was that he was too outspoken. "He was an arrogant so and so -- a typical Finance Ministry bureaucrat," claimed one young official who approved of Thaksin's action. "The question of interest rates is interesting, but was not the key. The main issue was the bank governor's constant criticisms about the government policies. What chief executive of a country could tolerate the constant public criticism of his policies in which Chatu Mongol indulged. He had to go, since he was disruptive."

A senior Bangkok banker, who was nervous about being identified, had a less charitable take on the issue. "It was about power pure and simple. Thaksin does not like people who won't go along with him, so the bank governor had to go." The banker emphasized his point by making a chopping motion with his hand, as if cutting off a troublesome head.

The new governor of the central bank, Pridiyathorn Devakula, who moved in from the Export-Import Bank, was quite careful on the question of interest rates. Asked about credit tightening, he responded: "We have to ask whether it will hurt foreign reserves or currency stability. If not, and -- even better -- if it helps our currency and reserves, and is complementary to our economic stimulus policies, then we should support it."

Significantly, Pridiyathorn did say that he would try to improve working relations between the central bank and the government. Indeed, he went so far as to claim that differences of opinion between his predecessor and the prime minister had given Thailand a negative image.

The prime minister now faces a threat to his continued tenure in office from an embarrassing direction. It is not the court of public opinion, which had given him a comfortable majority in the elections early this year, but Thailand's constitutional court.

The National Counter Corruption Commission ruled in December that Thaksin had make false declarations of his personal assets when he was a minister in a previous government. If the constitutional court supports the finding, then Thaksin will be barred from public office for five years and will lose his job.

This week, the country has been transfixed by speculation over their leader's fate, with some judges saying that a verdict could come "within days."

Telecom tycoon Thaksin, who swept to power with a landslide victory in a general election in January, retains strong support in the country despite accusations of graft.

Legal and political experts agree that this is not merely a crisis for Thaksin, but a constitutional crisis for Thailand. Could the court disqualify a man who had just been elected to power by a huge majority and was head of the first stable government in modern Thai history? On the other hand, could the court disregard the attempts, enshrined in the latest constitution, to clean up the country's notorious political system, traditionally riddled with favoritism, patronage and corruption?

Thaksin deliberately kept a high profile in late June, when week he appeared before the court. He was seen mobbed by admiring crowds, underlining his popular backing, and holding meetings with foreign leaders, a reminder that he was chief executive of Thailand. When he appeared before the court, he laughed, he got indignant and pleaded for his political life.

Reporters were split as to whether he actually cried, was merely tearful or just became red-eyed with emotion. He mentioned his strong political support, emphasized Thailand's need for a strong leader and recalled that his mother had convinced him always to be honest. He ended by saying: "The court will decide whether to allow this prime minister to serve the people and the country."

The prime minister's supporters claimed that there should not be an issue of corruption because Thaksin had come by his money honestly in legitimate business, not in corrupt ways. They also asserted that the money involved was only a fraction of his wealth.

The biggest omissions involved shares worth tens of millions of dollars which were transferred to his domestic servants. Thaksin has admitted that the declarations were inaccurate, but claimed it was not his fault. At one stage he blamed his wife, saying that she paid more attention to these matters than he did.

Whether the money was obtained corruptly or not was not the issue, pointed out the secretary general of the National Counter Corruption Commission. The failure was in making a false declaration of assets, making a mockery of the disclosure rules. He claimed that Thaksin did this on purpose to avoid taxes and other inconveniences. "Mr. Thaksin did not tell the truth when he claimed that they did not try to conceal the share transactions." argued the official.

The constitutional court faces a delicate task. Its gravity is compounded by 1997 constitution's express desire to see the emergence of stable governments -- such as the one that Thaksin heads -- as well as clean ones. If he is thrown out of office, his Thai Rak Thai (Thais Love Thais) party may find it difficult.

In office, the prime minister has indeed behaved like a good efficient businessman in a hurry, with the battle to clean up corporate debts as one of his main campaigns. But the problem, according to his opponents, is that he is too much like a business executive in a hurry, and loves power too much to bother with the checks and balances that are essential to political well-being.

Kevin Rafferty is the editor of the Hong Kong-based Euromoney magazine.

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