Plenty of uncertainty in Thailand after election
Plenty of uncertainty in Thailand after election
By Peter Janssen
BANGKOK (DPA): Thai Rak Thai, the political party of tycoon Thaksin Shinawatra, 51, was handed a clear mandate to rule in Saturday's general elections, but their triumph is unlikely to usher in an era of political and economic stability for Thailand.
Thaksin's party won nearly half of the 500 contested seats in the House of Representatives, clearing the way for him to become Thailand's 23rd prime minister and to push through the host of popular economic policies he has promised the people.
The closest rivals of Thai Rak Thai (literally -- Thai Love Thai), the 30-year-old Democrat Party under incumbent Prime Minister Chuan Leekpai, came in a distant second, slating them for the opposition.
"This is a strong message for the Democrats," said Chaiwat Khamchoo, dean of political science at Chulalongkorn University. Chuan's coalition government stepped in to save the nation in November 1997, after Thailand's entered its most serious financial crisis in decades.
In 1998, despite or partly because of tight fiscal policies recommended by the International Monetary Fund (IMF), from which Thailand borrowed US$17.2 billion, the economy contracted by 11 percent.
By 1999 a slight recovery was already under way with 4 percent growth, which was matched again in 2000, driven primarily by a good export performance. But for the common man on the street and the average Thai businessman, there is little sign that the good times are back.
"Chuan hasn't improved the economy. I wanted to give Thaksin a chance to see what he can do," said Ngo Sae Tang, a Bangkok voter.
Thai Rak Thai (TRT) campaigned on popular policies, such as a promise to provide each of Thailand's 70,000 villages with one million baht ($23,000) each in direct development funding and a three-year debt moratorium for farmers on 300 billion baht ($6.9 billion) in loans from the state-owned Bank of Agriculture and Cooperatives (BAAC).
TRT has also backed the setting up of a state asset management company to take over some of the worst debts to Thailand's ailing bank system, a move that would no doubt please the country's business elite.
Telecommunications tycoon Thaksin, who began the process of forming a coalition government with smaller Thai parties over the weekend, has insisted that TRT be handed control over economic ministries, such as finance and commerce, to implement his economic schemes.
"A very challenging path lies ahead for Thaksin, because he has set such high expectations," said Chaiwat. "He needs to make sure that all these policies will be implemented in a short period of time."
Economists have warned that although TRT's rural policies may have a positive short-term impact on the economy, they have worrisome long-term implications for the country.
"I wonder what will happen with the debt moratorium after the three years are up," cautioned Ammar Siamwalla, a senior advisor to the Thailand Development Research Institute (TDRI). "Because by then farmers will be in the habit of not paying back their debts."
There is a danger that the estimated 300 billion baht in farmers' debts to the BAAC will need to be taken on by the government, adding to public debt which already stands at 54 percent of gross domestic product (GDP) in the wake of Thailand's recession years.
A similar scenario is likely for the asset management company and the $1.6-billion village funding scheme. Thaksin has promised to finance all these programs by improving tax collection, but not raising taxes.
"If he can't make it from taxes then he will need to borrow money," warned Ammar.
But Thaksin is under pressure to perform, and it is likely to be a short act.
On Dec. 26 the National Counter Corruption Commission (NCCC) indicted the baht billionaire, whose fortune is estimated at 60 billion baht ($140 million) for intentionally concealing his assets with the transfer of millions of dollars worth of company shares to his servants in 1997, when he was deputy premier.
If the Constitutional Court upholds the NCCC's verdict in coming months, which is likely, Thaksin will be barred from national politics for a five-year period.
He would be forced to immediately resign, as would his entire cabinet, and a new government would be formed, although TRT could still lead it.
The uncertainty of Thaksin's political fate has not put him in a strong position to lobby for coalition partners in coming weeks.
His most likely choices are the New Aspiration Party (NAP) and the Chart Thai Party, which won about 50 seats each. The parties are led by former prime ministers Chavalit Yongchaiyudh and Banharn Sipaarcha, who ran the country between 1995 to 1997, leading up to Thailand's economic collapse in mid-1997.