Deputy PM's supervision of Thai finance minister hailed

Deputy PM's supervision of Thai finance minister hailed

By Thomas Fox

BANGKOK (AFP): A decision by Prime Minister Banharn Silpa- archa to place Thailand's embattled finance minister under the supervision of another senior cabinet member was welcomed by financial analysts Thursday.

Amnuay Virawan, a deputy premier charged with international economic affairs, was appointed Wednesday to supervise the finance ministry, a move that analysts said would improve coordination among economic ministries.

It would also reduce the risk of political meddling, they said.

"I think it was the right decision," said Nimit Nontapunthawat, head of research for Bangkok Bank. "Dr. Amnuay has a lot of experience with the finance ministry, and his education and experience in the private sector is also very much related."

The move would give Amnuay authority over Finance Minister Surakiart Sathirathai, who has been criticized for his lack of expertise in finance since his appointment to the cabinet in July. His background is in international law.

Investors criticized Surakiart's performance during the first few months of his term, mainly because of a fall in share prices on the stock market, which the minister said was due to factors beyond his control.

Surakiart then upset analysts by setting up a 20 billion baht (800-million-dollar) bail-out fund, so that margin investors would not suffer from forced sales during the slump.

But the situation came to a head last month when Surakiart pressured Ekamol Kiriwat into resigning as head of the Securities and Exchange Commission (SEC) and led a campaign to have the cabinet fire Ekamol from his post at the central bank post.

Critics, who fear that the central Bank of Thailand is becoming politicized, attacked Surakiart for not providing any evidence against Ekamol.

Ekamol has been widely credited for building the watchdog SEC into what foreign analysts have said was a world-class institution.

"The sacking of Ekamol could very likely be the reason that prompted moving Amnuay to (supervise) the finance ministry," said the head of another market research center, who asked not to be identified.

"People need to be made aware why a high official at that level is sacked without any adequate explanation or evidence," the Thai analyst said.

"It appears to me that there is quarreling among the technocrats. I view it very negatively because who should I trust now? Which technocrats do I listen to now?" the analyst said.

The deputy prime minister may have been chosen as a neutral person to oversee the squabbling between two groups in his old ministry, he added.

Ekamol's replacement at the SEC, Pakorn Malakul Na Ayudhya, also threw his support behind the decision to put Amnuay in charge.

"It will be good for the country, as Amnuay is a respected economist and financier," he said at a press conference Thursday. Bangkok Bank's Nimit said he did not believe that Surakiart would lose his job in the cabinet reshuffle expected to take place in the near future.

"With Dr. Amnuay in charge of the finance ministry it would create greater confidence because you have an experienced man there as well as Dr. Surakiart, who is well educated and capable but may lack experience," he said.

The Stock Exchange of Thailand index jumped 3.3 percent on Wednesday, the first trading day of the new year when Amnuay's new duties were announced, and had risen another 3.6 percent at midday Thursday.

However, brokers said the increase had little to do with Amnuay's appointment.

"Given the strong liquidity flowing into all Asian markets, the question of foreign confidence in Amnuay being given supervision of the finance ministry is not even a consideration for the short term," a foreign analyst said.