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COUP IN THAILAND - LATEST NEWS

(also see: The Good Coup Guide; a who's who of the Thai Coup)

Loud actions, still voices in Thailand

By Tom Plate
Sun, 12 Nov 2006, 09:19:00
From New Nation Online Edition

It is entirely possible that Thailand may just be the most interesting political place right now. It is a place that has had a semi-coup, yet hasn't lost its cool. It's also a place that's openly reviewing the pluses and minuses of democracy as if genuinely unsure about what would work best for it - at least for the time being.

And it's also a place where Western scare stories about the dangers of China's economic rise ring hollow. In fact, so many of its top leaders are as fluent in Mandarin as they are in Thai that its cabinet meetings could be conducted in the language of Beijing just as easily as of Bangkok.

Unsurprisingly, China, on the whole, is viewed as a huge economic plus in Southeast Asia, notwithstanding misgivings and worries about the future. In part, that's because Beijing speaks the language of economic development, and doesn't give knee-jerk lectures like the West when a military coup (of sorts) take place.

This coup had been exceedingly upset with the previous prime minister for months, and the uproar more or less did little more than re-affirm the primacy of the monarchy.

The September 19th military move that pushed out the former prime minister (democratically elected but allegedly the head of a corrupt administration) has its severe critics here. One of them was a taxi driver driven to despair. As if speaking for all of Thai's poor, he committed suicide in protest and became a national martyr overnight.

But generally speaking, Thailand isn't a nation of extremes. Its pleasant and patient people are no worshippers of self-immolation, and so far this 60-year-old man is the sole in such political suicide.

It is true that the ousted prime minister, last sighted playing golf on mainland China after cooling his heels in his London apartment, was popular with the more desperate classes - but mainly because of his many promises to reduce their economic misery, many of which he didn't keep.

Unless the current military government somehow manages to pick up economically where Thaksin Shinawatra left off, the Thai people may take time in demanding a full return to democracy.

Pressing practical concerns will naturally demand such attention; they tend to prioritise getting results over realising abstract theory. In the United States many geopolitical theorists size up the rise of China as a threat rather than an opportunity.

Instead of putting on their Adam Smith eyeglasses and seeing the economic value of having 22 per cent of the world's population back on their economic feet as viable consumers (especially for Southeast Asian exports), they put on their John Foster Dulles spectacles and imagine new bad-guy actors engaged in a full-blown cold war.

America's unmovable pessimists may still prove utterly correct - who knows? But their way is not the way most people see things Chinese in Thailand - at least judging from the presentations at the Asia Pacific Business Outlook conference organized here earlier this month by the Marshall School of Business at the University of Southern California.

In fact, several outspoken Thai business and political leaders at the impressive conference took an openly optimistic perspective on China. One well-known leader laughingly scoffed at the China-as-threat hypothesis, reminding his luncheon audience that without the positive gravitational pull of the ever-rising Chinese market, Thailand might never be fully recovered from the near-deadly Asian financial crisis of 1997-1999.

We Americans in the audience took note that the Thai leader focused on China's contribution, not America's. The truth is that the United States, bogged down in Iraq, has slipped a notch or two in Southeast Asia - perhaps not irredeemably, but definitely noticeably.

Another oddly noticeable attitude here is that of the new military government towards its Muslim minority: it is taking a much less harsher line on this Muslim population living in its southernmost provinces. By contrast, the Thaksin government had been cruel toward all Muslim protesters - mostly Thais of Muslim Malay dissent.

Strikingly, current Prime Minister Surayud Chulanont, speaking for the junta, has just publicly apologised to these Muslims; for the unforgivable atrocities committed by the government's security forces in the cold-blooded Thaksin-ordered crackdowns.

The apology was long in coming but most welcome. The brutality had been condemned not only internationally but domestically as well. Thais do not like to view themselves as common thugs, but rather as a pleasant, smart and hardworking people who are tolerant and open-minded. And this, it seems to me, is rather what they are - and wish to remain.
(Prof. Tom Plate, a veteran US journalist, is currently travelling in Southeast Asia)

Poorly reasoned appointments
Gen Sonthi's explanations for placing military officers on the boards of state enterprises raise worrying questions
The Nation - 14 November 2006

The reasons given by General Sonthi Boonyaratglin, chairman of the Council for National Security (CNS), for appointing several senior military officers to chair or serve as directors on the boards of state enterprises leaves a lot to be desired. Sonthi, responding to critics who questioned the wisdom or appropriateness of a CNS action that smacked of cronyism, said these military men assigned to serve on the boards of state enterprises were there to safeguard national security as well as to prevent corruption.

The CNS chairman, who staged the September 19 coup that toppled former prime minister Thaksin Shinawatra, also gave his personal assurance that the military officers - some of them his close associates - would uphold the public interest above all else. He also insisted that the decision, reached in consultation with interim Prime Minister Surayud Chulanont, had been made in good faith.

It was not exactly the kind of explanation members of the public expected to hear. The fundamental question as to what these military men, who lack a business background, can do in profit-oriented state enterprises that civilian professionals with relevant expertise cannot do better, remains unanswered.

Senior military officers took the chairmanships of five major state enterprises - TOT, CAT Telecom, Thailand Post, Bangkok Mass Transit Authority and Port Authority of Thailand, not to mention several others who serve as directors on the boards of many state enterprises. Each of these state enterprises - with a huge organisational structure, complex business processes and billions of baht in annual business turnover - requires its non-executive chairman to be at least a business-savvy person who can develop a smooth working relationship with the company's CEO and other members of the board.

It might well be true, as Sonthi asserted, that military officers could learn about the relevant business models and technologies of the state firms they will be serving. But surely there is a limit to how much these officers, whose main business is national security, can learn.

The non-executive chairman of a state enterprise has the power to set the agenda, guide the board and influence the CEO's decisions. Judging from the performance of previous generations of military officers who served on the boards of state enterprises, the scepticism expressed by many people seems justified. Having military men as chairmen or board members of state enterprises neither reduced corruption nor guaranteed that public interest would be upheld. If the past is any guide, too many officers end up learning the wrong things and becoming more corrupt than they were before. Besides, professional soldiers are not supposed to be put in positions where they might be tempted by the trappings of power and monetary rewards.

What society wants from Sonthi is not his personal guarantee of the integrity and probity of the military men assigned to serve on state enterprises' boards. What we need is a good system to screen and select government officials, including military officers, to serve on state enterprises, based on qualifications, expertise and suitability. We do not need a preferential system of selection based on personal connections, which, in a way, is disturbingly similar to the corruption-prone cronyism practised by former prime minister Thaksin Shinawatra.

Indeed, various government agencies, such as Office of the Civil Service Commission and the Finance Ministry, are already working on criteria to create lists of "public-sector executives" from among highly qualified senior government officials who have demonstrable skills and expertise in different areas of specialisation. Candidates to serve on state-enterprise boards as representatives of the government must be  from these lists to ensure transparency in the selection process.

Sonthi chose to fill these positions in key state enterprises with his trusted friends and subordinates. Now he, and the officers he assigned, must prove beyond any reasonable doubt that they will do their utmost to uphold the public interest, and not seek personal gain. And because they were appointed under extraordinary circumstances, they should voluntarily vacate their positions as soon as the one-year term of the Surayud government and Sonthi's CNS expires, to enable the future elected government to appoint its own representatives to the state-enterprise boards through a more transparent process.

Fishy meetings in Bangkok
27 October 2006

The big news in Bangkok yesterday was of a meeting between Privy Council President General Prem Tinsulanonda and deposed prime minister Thaksin Shinawatra's wife, Khunying Pojaman.

Note that she met with King's top advisor, not the acting Prime Minister or the coup leader and head of the CNS.

What was discussed. It is a safe bet that they were negotiating a compromise in the corruption investigation against Thaksin and his cronies.

So much for the credibility of the ongoing process to expose the corruption scandals that took place under Thaksin's watch and to bring the guilty to justice. Mind you they do not appear to making much progress. In the words of coup-maker General Sonthi Boonyaratglin, "what little evidence they might be able to find" to substantiate corruption charges against Thaksin and his cronies.

Prem carries great influence; it is believed that the September 19 military coup to topple Thaksin could not have succeeded without Prem's blessing. The descriptions of the meeting released to the media suggest a repentant Pojaman, resigned to the terrible fate that befell her husband and their family, receiving sage advice from a magnanimous Prem to try and accept the law of karma.

Remember that the alleged large-scale corruption under Thaksin's regime and his attempts to undermine democracy were cited as the main justifications for the overthrow of his government.

So now what happens; do we have transparent corruption investigations that proceed without fear or favour, leading to the successful prosecution of corrupt parties, however well connected they are, or, a behind the scenes deal at the highest level.

The meeting smells fishy and was probably ill advised. The coup-leaders and its supporters should not forget their noble-sounding intentions that justified last month's coup.

One month on - not a lot to report
The Nation newspaper - Editorial on 25 October 2006
Interim government needs to move quickly to reassure public over the reasons for the coup

A month after the military coup, the interim government headed by General Surayud Chulanont is still muddling its way along without any clear direction as to what it would like to accomplish. If it continues with this torpid attitude, then it will certainly invite more criticism over its already questionable legitimacy - meaning trouble could brew in the near future.

The people have been told the coup was inevitable. So, let's review the four main objectives behind it. First, the Thaksin government had run the country into the ground with political polarisation and the threat of violence. Second, there was widespread corruption. Third, independent institutions had been messed around so badly they could no longer function as expected under the 1997 Constitution. Fourth, there had been action that bordered on lese majeste.

So far the government has done nothing to address these charges lodged against the previous administration. The other day, Chuan Leekpai, a former PM, criticised the new government and the Council for National Security for their do-nothing attitude. Over the past month, the new government and the CNS, which staged the coup, have missed the opportunity to inform the public about progress they have made in ridding the country of the last vestiges of the Thaksin regime. Chuan said the government and the CNS have wasted the month by not telling the people the reason why Thaksin had to be ousted. As Thaksin still commands loyalty in the countryside, the coup might not have changed the opinions of those supporters.

What we are witnessing now is the government operating almost in a vacuum, not knowing its priorities and not knowing what to do next. Instead of using the anti-money laundering office to freeze the assets of the politicians suspected of enriching themselves, the government is allowing these politicians time to transfer their assets at their own convenience. It has the law on its side, but it does not know how to use it. Freezing the assets does not violate the law. The politicians can always get their assets back if they provide proper evidence that they were earned in an honest fashion.

Meanwhile, key members of Thai Rak Thai have been able to move about freely to plot their political comeback. Some of them have also openly criticised the new government or the CNS. And that is making people wonder what they are up to. If they are really as bad as the CNS suggested in its coup statement, why are they still allowed to move about happy and fancy-free? Thaksin, who is now in London, is also looking forward to returning home when the opportunity arises.

The corruption charges look as if they are easy to bring up in the local media but extremely difficult to put into the judicial system. Over the past month, we have heard several corruption charges are in the pipeline involving the CTX scandal and Klong Dan, the Smart Card, e-passports and various other Suvarnabhumi Airport projects, yet no formal charges have been forwarded by the asset examiners.

It is true that after the coup the polarisation caused by the Thaksin regime was put to an end quickly. But there is a new set of political complications. Non-government organisations, academics with a leaning to the Thaksin regime and ordinary people are taking a wait-and-see attitude. They can stage political rallies once martial law is lifted. The People's Alliance for Democracy is also waiting in the wings. Since it succeeded in bringing down the Thaksin regime, it has become a new political animal and is now waiting for a fresh target to go after. On the political scene, we aren't sure who is serving who. But the vote for Meechai Ruchuphan as president of the National Legislative Council signals that a power struggle is about to begin.

Then, when can we expect to see some lese majeste charges brought against certain members of the Thaksin regime? Again, this question, which was one of the key reasons for the coup, has not been addressed. There were several incidents of lese majeste committed in the previous administration, but nobody seems to be willing to take up some of the cases for prosecution.

We can only conclude the effort to stage a military coup to usurp power is a lot less strenuous than the job of running the country and maintaining power. The Surayud government must sit down to think hard about its priorities and then work on them. Time is running out.

Could Thaksin return to power?
24 October 2006
Thaksin seen scheming an eventual return to power
Approaches already made to former TRT heavies; wife may be key to such hopes
The Nation, Bangkok.

In the sixth of a series of articles marking the first month since the September 19 coup, The Nation focuses on what ousted prime minister Thaksin Shinawatra has been doing and will do in order to return to power.

While deposed prime minister Thaksin Shinawatra has yet to return home there is much speculation about what he plans for himself and the country.

All leading political gurus believe he is planning to "fight to death".

As things stand, Thaksin may not be able to return home until the end of next year. His struggle to cling to power started on September 19, when the then Council for Democratic Reform secretly moved out tanks to take over strategic areas in the capital.

Thaksin fought from across the globe by broadcasting three orders: a State of Emergency; an order to dismiss Army Chief General Sonthi Boonyaratglin; and before he could finish reading it, an order to appoint General Ruengroj Mahasaranond in place of Sonthi - but his voice was cut off in mid-sentence.

After the CDR had taken over, Thaksin did not stop fighting. He wanted to give a speech at the United Nations, to seek justice for being overthrown. His bid to go ahead with the address was ended by an important US figure in Thailand. The Thai ambassador to the UN confirmed before the meeting of world leaders that Thaksin had become a "former prime minister".

Thaksin's attempts did not stop there. He and his chief policy adviser Pansak Vinyarat lobbied foreign countries to boycott the coup leaders and released reports that Thaksin had established a government-in-exile.

Although Thaksin has resigned as leader of the Thai Rak Thai Party, the move was "to withdraw to regain control". One tactic is to avoid a criminal offence in case the Constitution Tribunal dissolves the party, as a criminal offence cannot be prosecuted retroactively.

Another reason Thaksin must let his political heirs take over the party - be it Sudarat, Prommin Lertsuridej, Pongthep Thepkanchana or Chaturon Chaisang - is the party needs a new face to change its image.

Chaturon agreed to accept the leadership on the condition that he has freedom to build the party with a democratic ideology.

Thaksin may care little about that - his hands are likely to be full trying to protect his assets from being impounded by the Asset Examination Committee. Political analysts believe Thaksin is happy to use Chaturon to ride over the present crisis.

He has reportedly mobilised at least 300 party members in each province to do "underground" work. They distributed a cartoon book that tells of Thaksin's life to seek sympathy from the grassroots. He is also trying his best to ensure the Thai public does not lose interest in him.

If the Thai Rak Thai Party is dissolved, that would not mean Thaksin's dream to return to power would end. He has been seeking a way to survive. Approaches have been made to politicians such as Somsak Thepsuthin, who led his faction to quit Thai Rak Thai to establish a new party.

The new party includes former "heavies" members such as Suriya Jungrungreangkit, Pinij Charu-sombat, Somkid Chatusripitak, all of whom had met before the coup to discuss forming a new party when the Thai Rak Thai was looking shaky.

At this juncture, the attempt to establish this party is seen as an opportunistic move that could either serve the interests of the Council for National Security (CNS) or, be a nominee party for Thaksin to stage a comeback.

The group has sought financial backing from Khunying Pojaman Shinwatra but the plan was scrapped after the move was leaked to the media.

But Pojaman may finally be forced to enter politics because Thaksin is likely to be banned from politics in the long term over allegations of corruption and causing social division.

Finally the charge that may prevent his return to politics forever is that he posed a threat to the monarchy.

Thaksin needs to push his political heir into power and wait for the day he can regain his assets, and take revenge on those who brought him down.

This scenario is not unimaginable, if the CNS is unable to uproot Thaksin's powerbase because of traitors in the CNS.

The evolution of the junta's name
October 9 2006

Thailand's military junta has another new header on its website; the third header and the third name in the last two weeks.

Newest header from the new website



September 28

                                                                                               September 20

I do have reservations about the name - Council for National Security; which sounds a little too like the abhored SLORC in Burma. The argument is that the newly appointed Prime Minister and Cabinet are responsible for democratic reform and the military leaders are now solely responsible for national security.

Anyway, have a look at the web site; there has probably never been a coup website that offers soothing music on the site!

Thai cabinet appointed
10 October 2006

Thailand's interim, post-coup cabinet has been announced, a government Web site said on Monday, with central bank governor Pridiyathorn Devakula finance minister -- an apparent bid to reassure foreign and domestic investors.

Pridiyathorn was one of 26 cabinet ministers announced on the Government House web site (www.thaigov.go.th).

Other key economic positions were Kosit Panpiemrat, former executive chairman of Bangkok Bank, Thailand's largest, as industry minister and Krikkrai Jirapaet, a former ambassador to the World Trade Organisation, as commerce minister.

Nitya Pibulsonggram, a former ambassador to Washington and chief negotiator in stalled free talks with the United States, was appointed foreign minister.

Piyaswadi Amarananda, a retired career energy ministry bureaucrat and chairman of Thailand's top three asset management firms, will be energy minister.

The widely expected appointment of Pridiyathorn is likely to reassure investors anxious for a steady hand on the country's economic tiller amid slowing growth and after months of political unrest capped by the September 19 coup against Thaksin Shinawatra.

Democracy, Thai style - Ban the politicians
By Thomas Fuller International Herald Tribune
Published: October 6, 2006

BANGKOK Sometime in the next few weeks, 100 delegates from around Thailand will gather here to draft a new constitution, a fresh start for the country after the military coup last month.

But first the ground rules: Politicians need not apply.

Politics is a dirty word in many countries, but mistrust runs so deep here that those who have been members of political parties or have held political office during the past two years are banned from doing what would in other countries be seen as their primary job: writing the supreme law of the land. "This is democracy Thai style, not European style," said Pramuan Ruchanaseree, the co-founder of the Pracharat political party and thus disqualified from taking part. "No one trusts politicians."

The tanks and soldiers that the generals sent onto the streets of Bangkok nearly three weeks ago are now back at their bases. What remains in the aftermath of the coup is skepticism toward politics and democracy in general and a feeling that academics, ordinary citizens and military officers are the ones best placed to lead the country and chart its future in the coming months.

In the days ahead, Surayud Chulanont, the retired general appointed by the military as prime minister, will announce his cabinet. Not surprisingly, most of the names mentioned so far are civil servants, career military officers and corporate executives - but not politicians.

Persistent vote-buying has tainted electoral politics here and the allegations of corruption in the administration of Thaksin Shinawatra, the prime minister removed in the coup, reinforced the notion that Thai politics is a mercenary system where those who serve also serve themselves to lucrative cuts of government contracts.

"Thais have not as yet absorbed the core values of democracy," said Gothom Arya, a former election commissioner, who is now director of research at Mahidol University. "They see a lot of shortcomings. The core values are difficult to understand. It has not been part of our way of life."

According to the road map set out by the coup makers, Surayud's government will rule for about a year, until the new constitution is written and elections can be held, a familiar cycle in a country where coup leaders have shredded the Constitution seven times.

In the meantime, Thailand is still technically under martial law and there is a ban on any political activity, a measure ostensibly designed to keep Thaksin and his allies out of the picture - but which covers all political parties, including those that opposed Thaksin.

Thailand's ambivalence toward a return to democracy is in sharp contrast to the unequivocal moral clarity espoused by its longtime ally, the United States, which described the military takeover as a "U-turn" for the country. More broadly, the Thai coup is the latest setback for the idea that democracy is a universally desired global elixir: Add the military takeover here to the debacle of nation-building in Iraq and deep skepticism toward democracy in places like Russia, where last year only 28 percent of Russians said it was the best system for the country.

What is perhaps surprising in the Thai case is that many academics have long theorized that democracy would grow deeper roots in societies that had experienced sustained periods of economic growth. Thailand has enjoyed several years of relative prosperity: the economy has been growing at a healthy annual pace of 4 or 5 percent, prices for major exports such as rubber and rice are high, and both tourism and the country's car industry are thriving.

What sets Thailand apart from other developing countries in the region is the role of the monarchy. King Bhumibol Adulyadej is adored by most Thais, and his 60 years on the throne have provided a country with a sense of security and continuity. As a corollary, though, Thais often worry about what will happen when he is gone.

"It's lucky in Thailand that the king is beloved by the people," said Pramuan, who was interior minister from 2002 to 2004. "The soldiers are below the king. And people trust soldiers more than politicians. This is our social heritage."

So far only a tiny group of students and academics is demanding an immediate return to democratic rule. In recent days its members have staged demonstrations that attracted more journalists than actual protesters.

More typical is the opinion of Napa Pruetarat, an 18-year-old medical student at Chulalongkorn University: The coup was justified, she said, because Thailand is not ripe for full-fledged democracy. "I think the coup was good," she said. "If we want to follow the democratic path, Thailand needs to be more developed."

In opinion polls, interviews and newspaper editorials, Thais say they are optimistic that the new prime minister, Surayud, will be less corrupt than the previous, elected governments. Criticism by leaders from places as diverse as Australia, Malaysia, Japan and the European Union is shrugged off by Thais, who say that the coup has been misunderstood.

The Nation newspaper is host to an online forum titled "Can foreigners ever understand Thai politics?"

This was also the gist of an interview given by Anand Panyarachun, who served as interim prime minister after the previous military coup in 1991. Anand told the Thai-language Mathichon newspaper that the coup was a hiccup and justified it by saying that Thaksin's government had stripped the democratic system of its meaning.

"Thailand had lost the essence of its democracy," Anand said. "What was left was merely the form: having a Constitution, a Parliament and the administrative, legislative and judiciary branches. But there was nothing democratic in its essence."

More blunt is the assessment of Thira Silpasanong, a 56-year-old restaurant owner in Bangkok.

"It was well known that Thai politicians were seen as dirty, corrupt and selfish," Thira said. "The purpose of the coup was to rid them from the system."

Not everyone in Thailand buys that argument. Prinya Thaewanarumitkul, one of the country's leading constitutional lawyers, says the practice of coups d'état in Thailand is a bad habit that needs to end. "If we didn't have this coup the Thai people could have learned more about democracy and politics and about how to develop," he said.

The most serious consequence of the coup, Prinya said, was the suspension of civil liberties. Because Thailand is still under martial law, the military can now legally open mail, censor the media, tap telephones, barricade streets or detain anyone indefinitely without trial.

"They can block any street, declare a curfew, destroy any house without compensation," Prinya said.

A key test of the coup makers' intentions, he said, will be how long martial law is maintained. The last time - after the 1991 coup - the interim government lifted martial law after two months.

A Siamese Tragedy  
Walden Bello | September 29, 2006        
Editor: John Feffer, IRC              
Foreign Policy In Focus

The military coup in Thailand is the second high-profile collapse of a democracy in the developing world in the last seven years. The first was the coup in Pakistan in October 1999 that brought General Pervez Musharraf to power. There are some disturbing parallels between the two events. Both coups have been popular with the middle class, and in both countries the military promised to soon vacate power. Six years after ousting Prime Minister Nawaz Sharif, Musharaff and the army are still in power in Pakistan. This precedent does not bode well for Thailand.  

The coup is the latest in a series of setbacks for Thailand since a "people power" movement toppled the authoritarian leaders in 1992. Even before Prime Minister Thaksin Shinawatra was ousted on September 19, Thai democracy was in severe crisis because of a succession of elected but do-nothing or exceedingly corrupt regimes of which the Thaksin government was the worst. The International Monetary Fund (IMF), which for all intents and purposes ran the country with no accountability from 1997 to 2001, further eroded the legitimacy of Thai democracy by imposing a program that brought great hardship to the majority. Thaksin stoked this disaffection with the IMF and the political system to create a majority coalition that allowed him to violate constitutional constraints and infringe on democratic freedoms, while using the state as a mechanism of private capital accumulation in an unparalleled fashion.  

A politically diverse opposition with a middle-class base sought to oust Thaksin by relying not on electoral democracy but on the democracy of the street. In the last few months, the prime minister not only lost moral legitimacy but a great deal of political power. The democracy movement was about to launch the final phase to drive Thaksin out when the military intervened. Though it is now popular among Bangkokians, the coup will eventually prove to be a cure worse than the disease.  

Democracy on the Ropes

Although Thaksin Shinawatra undermined the Thailand's democratic regime democracy in the country was in bad shape before he came to power in January 2001. The first Chuan Leekpai government from 1992 to 1995 did not make even the slightest effort at social reform. The government of former provincial businessman Banharn Silipa-Archa, from 1995 to 1996, has been described as "a semi-kleptocratic administration where coalition partners were paid to stay sweet, just like he used to buy public works contracts." The successor government of Chavalit Yongchaiyudh, a former general, was based on an alliance among big business elites, provincial bosses, and local godfathers. Relatively free elections were held, but they served mainly to determine which coalition of elites would have its turn at using government as a mechanism for private capital accumulation. Not surprisingly, the massive corruption, especially under Banharn and Chavalit, repelled the Bangkok middle class, and the urban and rural poor did not see the advent of democracy marking a change in their lives.  

Democracy suffered a further blow in 1997-2001 following the Asian financial crisis. This time the local elites were not the culprit. The IMF pressured the Chavalit government, then the second Chuan government to adopt a very severe reform program that consisted of radically cutting expenditures, decreeing many corporations bankrupt, liberalizing foreign investment laws, and privatizing state enterprises. The IMF's $72 billion rescue fund was spent not on saving the local economy but on enabling the government to pay off the country's foreign creditors.  

When the Chavalit government hesitated to adopt these measures, the IMF pressed for a change in government. The second Chuan government complied fully with the Fund, and for the next three years Thailand had a government accountable not to the people but to a foreign institution. Not surprisingly, the government lost much of its credibility as the country plunged into recession and one million Thais fell below the poverty line. Meanwhile the U.S. Trade Representative told the U.S. Congress that the Thai government's "commitments to restructure public enterprises and accelerate privatization of certain key sectors—including energy, transportation, utilities, and communications—[are expected] to create new business opportunities for U.S. firms."  

The IMF, in short, contributed greatly to sapping the legitimacy of Thailand's fledgling democracy. This was not the only instance where the Fund contributed to eroding the credibility of a government, especially among the poor. If there is today a pattern reversing the so-called "Third Wave" of democratization that took off as a trend in the developing world since the mid-seventies, the IMF—supported by the U.S. government—is part of the reason. Such IMF-inspired democratic reversals could be found in Venezuela in 1989, where a hike in transportation costs provoked an urban uprising against a weak democracy; in the Philippines, where the Fund squandered the legitimacy of the post-Marcos democracy by forcing it to make debt repayment instead of development its economic priority; and in Pakistan, where IMF and World Bank programs did much to undermine the legitimacy of the civilian governments of Benazir Bhutto and Nawaz Sharif.  

Monopoly Capitalism cum Populism

After running and winning on an anti-IMF platform, Thaksin inherited a severely compromised democracy when he took office in 2001. In his first year, he inaugurated three heavy spending programs that directly contradicted the IMF: a moratorium on farmers' existing debt along with facilitating new credit for them, medical treatment for all at only 30 baht or less than a dollar per illness, and a one million baht fund for every district to invest as it saw fit. These policies did not bring on the inflationary crisis that the IMF and conservative local economists expected. Instead they buoyed the economy and cemented Thaksin's massive support among the rural and urban poor.  

This was the "good" side of Thaksin. However, having secured majority support with these and other practices that analysts Alec and Chanida Bamford call "neofeudal patronage," he began to subvert the freedom of the press and to use government power to add to his wealth. He eased restrictions on his businesses and those of his cronies, and used his position to buy allies and buy off opponents. His war on drugs, which resulted in the loss of over 2,500 lives, bothered human rights activists but was popular with the majority. His hard-line, purely punitive policy toward the Muslim insurgency in three southern provinces simply worsened the situation there.  

Just as Thaksin appeared to have created the formula for a long stay in power supported by an electoral majority, he overreached. In January 2006, his family sold their controlling stake in telecoms conglomerate Shin Corporation for $1.87 billion to a Singapore government front called Temasek Holdings. Before the sale, Thaksin had made sure the Revenue Department would interpret or modify the rules to exempt him from paying taxes. This brought the Bangkok middle class to the streets to demand his ouster in a movement that bore a striking resemblance to the "People Power Uprising" that overthrew Joseph Estrada in the Philippines in January 2001.  

To resolve the polarization, Thaksin dissolved Parliament and called for elections, knowing that he would win elections handily, as his coalition had in 2001 and in 2005. Indeed, Thaksin's coalition won 57% of the vote in the April elections. But the opposition boycotted, producing an opposition-less parliament. After a not-too-veiled suggestion by the revered King Bhumibol, the Supreme Court found the elections in violation of the Constitution and ordered them held once more. Thaksin resigned as prime minister and said he would be a caretaker until after new elections were held.  
 
Polarization but not Gridlock

The Thai conflict, in broad terms, pitted the urban and rural lower classes—the majority—against the middle classes, mainly the Bangkok middle class. The system of liberal democracy split into its component parts of liberalism and democracy. Invoking the legacy of liberalism, the people in the streets sought to remove Thaksin for his violations of human and civil rights and his arbitrary rule, while Thaksin's supporters sought to keep him in power by appealing to the basic principle of a democracy--that is, the rule of the majority. The anti-Thaksin forces, however, claimed that Thaksin's majority rule fit the phenomenon that John Stuart Mill described as the "tyranny of the majority."  

Prior to the coup, Thailand was not in gridlock. And it was far from descending into civil war. Thaksin's resignation as prime minister indicated, more importantly, that the moral tide had turned against him. He had lost control, criticism of him was widespread in a media that was once tame, and the pressure was on for him to resign before the next elections, originally scheduled for October 15 but rescheduled for November. On Thursday, the day after the coup, the People's Alliance for Democracy had planned to stage a mass rally to begin a final push against Thaksin from the streets.  

This was democracy in action, with all its rough and tumble and the rambunctious efforts to resolve conflicting principles. Of course, the outcome was not guaranteed, but indeterminacy and prolonged resolution of disputes are part and parcel of the risks that come with democracy. Thais were wrestling to resolve the question of political succession through democratic, civilian methods. And it seemed like the democracy of the streets would successfully determine political succession, creating an important precedent in democratic practice. Direct democracy not only had relevance for the political succession; it was reinvigorating and renewing the democratic practice and democratic spirit.  
 
Cure Worse than Disease

The military coup cut short a vibrant democratic process and was, everybody agrees, unconstitutional, illegal, and undemocratic. Many say, however, that yes, it is all this, but it is popular and it is valid because it ended a crisis. This is questionable. For several reasons, this coup may have temporarily ended the crisis but at the pain of provoking a much deeper one.
 
Thaksin's mass base of the poor and underprivileged will view post-coup regimes as possessing little democratic legitimacy.
    
The military has reasserted its traditional, self-defined role as the "arbiter" of Thai politics, a function that had been defined as illegitimate for the last 14 years.
    
There has emerged a dangerous informal institutional axis that would subvert future democratic arrangements between the military and the Royal Palace's Privy Council, one of the few national political institutions not eliminated by military decree. Retired military strongman, General Prem Tinsulanonda heads up the council, and there is strong suspicion that he had more than just a neutral role in the affair. Several days before the coup, Prem told the military that their loyalty was principally "to the Nation and the King" not the government.
    
The one really popularly drawn up constitution, the 1997 Constitution, has been abolished by military fiat. This constitution, approved after consultation with civil society, placed many controls on the exercise of parliamentary and executive power and on the behavior of politicians and bureaucrats. Ironically, the anti-Thaksin coup leaders, for all their rhetoric about "restoring democracy," simply delivered the coup de grace to a very democratic document that Thaksin had systematically subverted.  

Coup leader Army Chief General Sondhi Boonyaratkalin may well be sanguine about stepping aside. But personal predilections are no match for institutional interests. More than any other military in Southeast Asia, the Thai military has had a propensity for intervening in the political process, having launched some 18 military coups since 1932. Thai military men have an ingrained, institutional contempt for civilian politicians, regarding them as blundering fools. The generals have often promised to return to civilian rule after a coup, but proceeded to rule directly or indirectly through military-appointed civilians. Gen. Sondhi's post-coup reassurances must be taken with the same seriousness as his claim days before the takeover that military coups "were a thing of the past."  

Already, the generals have drafted an interim constitution that makes them "advisers" to an interim civilian government. One of the two leading candidates for the premiership, Surayud Chulanont, is a former Supreme Commander of the Armed Forces. The other is a civilian. That is not necessarily a virtue, since most previous civilian prime ministers appointed by the military have been weak politicians, whose tenures were marked by responsiveness to their military overseers. The civilian being eyed by the generals will most likely follow in this tradition of pliability. Supachai Panitchpakdi, a leading candidate, was a weak director general of the World Trade Organization, who was overly responsive to the developed country agenda rather than to the interests of developing countries. In 1997-98, he was also deputy premier in the second Chuan government that rigorously followed the IMF program that proved so devastating for the country. At the time, he admitted at an interview: "We have lost our autonomy, our ability to determine our macroeconomic policy. This is unfortunate." Such a record does not inspire confidence that he is a person that can stand up to the military and other power centers in the country.  

This retreat from democracy bodes ill not only for Thailand. The coup is an expression of a larger trend—a deep crisis of legitimacy among elite democracies that came into being in the 1980s and 1990s as part of what Samuel Huntington called the "Third Wave of Democratization." The Thai coup is the second high-profile collapse of an elite democracy in the last seven years. It may not be the last. Is there now a reverse wave leading democracies back to authoritarian or semi-authoritarian regimes?          

FPIF columnist Walden Bello is executive director of Focus on the Global South and professor of sociology at the University of the Philippines. He is the author of A Siamese Tragedy: Development and Disintegration in Modern Thailand (London: Zed, 1998).

Just how naive was Temasek?
2 October 2006
SINGAPORE - International Herald Tribune

Among the many measures of a successful foreign investment, helping to trigger a coup d'état is definitely not one of them.

In hindsight, then, the $1.9 billion purchase of a controlling stake in Thailand's dominant telecommunications conglomerate early this year by a group of investors led by the Singapore government's investment arm, Temasek Holdings, has been less than ideal, say analysts and people close to the deal.

Buying the company, Shin, provoked nationalist outrage in Thailand. Buying it from the family of a prime minister widely accused of corruption, moreover, touched off massive street protests that culminated last month in the ouster of that prime minister, Thaksin Shinawatra.

"I don't think anyone perceived there would be such political fallout from the deal," said Stephen Bennett, a lawyer at Hunton & Williams in Bangkok who advised Temasek on the purchase. "They wouldn't have done it had they known this would happen."

On the contrary, Bennett said, political risk did not figure into negotiations. "It wasn't an open-discussion issue," he said.

Thaksin is now in exile in London, Temasek's investment has sunk by almost $690 million, and Thai officials are investigating whether the deal was illegal. Temasek said executives were not available for interviews but issued a statement in response to a list of questions saying it had not violated any laws, was cooperating with investigators and stood by its investment.

"Temasek remains a long-term investor in Thailand, and we believe that the long-term fundamentals of the country remain good," Temasek said in a statement issued through its public relations agency. "We have complied fully with the laws in our investments and will continue to cooperate fully."

On Friday, however, Temasek's senior managing director for investment, Jimmy Phoon, gave interviews to at least three reporters, including one from Bloomberg News. Phoon's comments did not depart significantly from Temasek's earlier statement, though he did reveal to Bloomberg that the purchase had been carried out in Thailand, apparently contradicting earlier speculation in the Thai news media that the transaction might have been carried out in offshore accounts.

The coup has thrust into unusual focus a company that rarely speaks with the news media. Though created, owned and overseen by Singapore's government, Temasek says it operates entirely by the rules of the market. Its troubles in Thailand are a relatively small setback in an overseas investment push in which it spent more than $13 billion in its latest financial year. With Singapore facing increasing competition for investment and trade from China and India, Temasek is helping it hedge its bets by investing around Asia, notably in China, where it is the largest foreign investor in the financial sector. It also plans to move into developed markets like the United States, Europe and Japan.

"It's an insurance policy," said Song Seng Wun, regional economist at brokerage firm CIMB-G.K. Goh in Singapore. "Even if things, knock on wood, didn't turn out domestically, they'd still have a hand or fingers in many pies across the world."

Temasek's portfolio, valued at $81.2 billion, makes it one of the largest state-owned shareholders in the world, according to Thomson Financial. Temasek is adamant that its investments are purely profit-driven, but its appetite and government ownership have nevertheless raised reservations among some other Asian countries.

Analysts say that Temasek may be overconfident but that it is not political. Instead, its investments have a strategic purpose, they say: to raise Singapore's relevance in the global economy.

"The more you invest in the region, the more capacity you have to influence decisions about where people invest," said Garry Rodan, a professor at Murdoch University's Asia Research Center in Perth, Australia.

Temasek's push is part of a broader effort by Singapore to hitch itself to larger economic wagons. A port city with no natural resources, Singapore has long depended on being a middleman. After independence in 1965, it lured multinationals with low taxes and clean government. It also set up companies to build essential infrastructure.

In 1974, the government set up Temasek as a holding company for its stable. Temasek's stakes in about 40 companies now earn an estimated $2.5 billion in annual dividends, part of which Temasek pays the government as income tax and dividends.

The bursting of the technology bubble in 2000, however, threw Singapore into its worst recession since independence. Temasek's portfolio shrank by almost a fifth.

In mid-2002, Temasek appointed a new executive director to overhaul the company: Ho Ching, a Stanford-educated electrical engineer who worked her way up to head the military- related conglomerate Singapore Technologies. What drew as much attention as Ho's résumé, however, was the name of her husband, then the deputy prime minister and now prime minister, Lee Hsien Loong, son of Singapore's founding prime minister, Lee Kuan Yew. The Temasek chairman, S. Dhanabalan, said at the time he had to overcome Lee Hsien Loong's reservations about hiring his wife.

One of Ho's first moves at the helm was to shift Temasek's headquarters from a solemn skyscraper downtown to a new glass-enclosed building with lower rents and an open floor plan to foster collaboration.

Bankers credit Ho with imposing investment discipline and global expertise, often importing it - 27 percent of Temasek's 250 employees are foreigners.

Then there was Temasek's overseas investment drive. Temasek was already gaining overseas exposure through its Singapore subsidiaries. Singapore Telecommunications, or SingTel, bought the Australian cellular operator Optus for $7 billion in 2001. Singapore Airlines owns 49 percent of Virgin Atlantic. And the port operator PSA holds stakes in 20 ports in 11 countries, including 5 in China.

Economists say investing abroad makes more sense for Temasek than investing at home, if only to diversify without increasing the government's dominance of Singapore's economy. Investing abroad also fits Singapore's strategy of building trade and investment links. Singapore has signed bilateral free trade agreements with the United States, Japan and six other countries.

Being a small country in the middle of a volatile region, Singapore has always wanted to keep everybody engaged," said C. Fred Bergsten, director of the Institute for International Economics in Washington.

Temasek's goal for its portfolio is a three-way split among Singapore, developing Asia and developed countries. So far, though, it has been concentrating largely on gaining exposure to Asia's rapidly growing middle class. Temasek's biggest investments have therefore been in Asian banks.

Temasek says the government is not involved in investment decisions. But its board is appointed by the Ministry of Finance, which Lee Hsien Loong also heads, subject to approval by Singapore's president. Temasek's chairman, S. Dhanabalan, is a former foreign minister. One of its two deputy chairmen is a permanent secretary in the ministry of finance.

Temasek's critics abroad say resentment of Singapore's affluence and perceived arrogance help fuel suspicion of the companies motives. Singapore has become a haven for the fortunes of Asia's new millionaires, and not all its neighbors are happy about this fact. Many Indonesians, for example, resent Temasek for what they say is excessive control of Indonesia's cellular industry: ST Telemedia and SingTel control the country's two leading operators.

"It galvanizes the ill feeling the public has toward Singapore," said Drajad Wibowo, an Indonesian legislator.

India, on the other hand, rejected ST Telemedia's $390 million bid last year for a 29 percent stake in its fifth- largest cellular operator because SingTel already owns 30.5 percent of the Indian operator Bharti. This year India blocked Temasek from raising its stake in ICICI Bank because the Government of Singapore Investment Corporation, which manages Singapore's budget surpluses and foreign exchange reserves, already held 3 percent.

Temasek has had better luck in the United States. ST Telemedia's 2003 purchase of a majority stake in Global Crossing overcame opposition by the Pentagon after Singapore's prime minister at the time, Goh Chok Tong, wrote to Vice President Dick Cheney.

Washington was less understanding toward one of its recent partners in China, however. Last year, Temasek and Singapore Airlines took a 49 percent stake in a cargo airline with China Great Wall Industry, a satellite launch company that since 1991 has been repeatedly sanctioned by Washington for allegedly sending missile parts to Iran.

Great Wall Airlines started flying in June with two Boeing jets, and in August the U.S. Treasury Department added it to the list of sanctioned companies, forbidding any American company from doing business with it, including Boeing. Deprived of technical assistance or parts, the airline suspended operations. Singapore Airlines said that Great Wall Airlines was not alleged to have done anything wrong and that China Great Wall Industry no longer had a stake in it.

The Shin imbroglio is another episode that analysts say Temasek should have seen coming. Thaksin became a billionaire building Shin into a market leader; but after becoming prime minister in 2001, he faced repeated allegations of using policies to benefit the company. Even as the deal was being negotiated, tens of thousands of protesters had been attending anti- Thaksin rallies.

After buying Shinawatra's 49.6 percent stake with a group of Thai investors, Temasek and its partners were obliged to make a general offer for the remaining shares and ended up with a 96 percent stake valued at $3.8 billion. Temasek gained control over Shin, Thailand's leading cellular operator, a satellite company, and a local television broadcaster.

What outraged Bangkok's middle class, in addition to the sale of key communications to a foreign government, was that the deal was conducted in a way that enabled the Shinawatras to avoid any income tax.

Investigations into the Shin purchase now center on whether Temasek's purchase violates Thailand's 49 percent foreign shareholding limit on telecommunications companies. Temasek denies that any of its Thai partners are proxies, an allegation they have also denied. Temasek says that it controls only 44 percent of Shin and that Thai entities control the rest. If the Shin deal is found to be illegal, the company could face penalties and a revocation of its licenses. The ministry could also force it to offload shares or void the sale.

Temesak's silent worries
29 September 2006
The fallout from the Thai coup is yet to hit Singapore's Madame Ho, writes Eric Ellis - Sydney Morning Herald..

1984 in 2006
27 September 2006

In his book Nineteen Eighty-Four George Orwell wrote that there are only four ways that a ruling group can fall from power:

"Either it is conquered from without, or it governs so inefficiently that the masses are stirred up to revolt, or it allows a strong and discontented Middle group to come into being, or it loses its own self-confidence and willingness to govern. These causes do not operate singly, and as a rule all four of them are present in some degree. A ruling class which could guard against all of the would remain in power permanently."

Food for thought!

A Banned Book Challenges Saintly Image of Thai King
The New York Times

JAKARTA, Indonesia, Sept. 24 — When soldiers and tanks rolled onto the streets of Bangkok last week and the king appeared on television with the generals, it was not the first time Thailand’s wildly popular monarch had given his blessing to a military takeover.

A new and comprehensive history of the Thai modern monarchy, written by an American journalist, Paul M. Handley, and banned in Thailand, argues that in his 60-year reign King Bhumibol Adulyadej has generally exercised a preference for order over democracy.

In doing so, Mr. Handley said, the king has put the preservation of the institution of the monarchy ahead of a democratic Thailand.

The book, “The King Never Smiles,” presents a direct counterpoint to years of methodical royal image-making that projects a king beyond politics, a man of peace, good works and Buddhist humility. It also runs counter to how most Thais see their king, as a man of mystique and charisma but also as a bastion of Thailand’s moves to modernity.

The book’s publisher, Yale University Press, said it came under heavy pressure from the Thai government not to publish it.

The director of Yale University Press, John Donatich, said the pressure included a visit to New Haven by a delegation of Thai officials, including the cabinet secretary general, Bowornsak Uwanno, and the Thai ambassador to the United States, Virasakdi Futrakul.

Mr. Donatich said he ruled out canceling publication of the book, and copies are now on sale in Asian capitals and the United States. But he did agree, he said, to their request that publication be delayed until July, a month after the June 9 celebrations in Bangkok of King Bhumibol’s 60th anniversary on the throne and his 80th birthday.

“We didn’t want to be accused of exploiting the event,” Mr. Donatich said.

The televised coverage of the gala provided an unusual look at the court’s unyielding protocol that emphasizes a godly king above ordinary mortals. In one live segment, white-liveried attachés could be seen running ahead of the king to open an elevator door, and then lying prostrate on the floor as the king and his wife passed by.

Mr. Handley, who worked for 13 years as a journalist in Thailand, does not argue with the king’s unequalled status among the people or his dedication to rural development projects. He writes that King Bhumibol’s prestige has “survived unscathed by the virtue of his sheer longevity and his personality — earnest, hardworking, gentle, with an impeccably simple lifestyle.”

But his book does note that the king sided with a brutal army takeover in 1976, and in 1992 waited three days before stopping a four-star general from ordering troops to fire on demonstrators.

Much of what Mr. Handley writes is not new, and most of the facts are not in dispute, reviewers and Thai historians say. It is the book’s interpretation of the facts that can be disputed, said Thitinan Pongsudhirak, the director of the Institute of Security and International Studies at Chulalongkorn University in Bangkok.

He disagreed, he said, with the argument that the trouble with Thailand’s democracy lay with the king.

“That Thai democracy is weak because of the king — I don’t think so,” Mr. Thitinan said. In fact, he said, the king had approved the 1997 Constitution, the most democratic so far, and that was abolished last week

That Constitution worked well, he said, until Prime Minister Thaksin Shinawatra, ousted last Tuesday, was acquitted of asset concealment by the constitutional court in 2001, a decision the king had nothing to do with.

The Yale press agreed to consider some factual errors that the Thais said were of concern. In the end, Mr. Donatich said, the Thais submitted only three or four minor corrections, like the correct title of a royal daughter’s thesis. “He did his homework,” Mr. Donatich said of the author.

A portion of a document from the Thai cabinet that appeared on a Thai Web site and appearing, by all accounts, to be authentic, listed the ways the Thais tried to prevent publication, and if it went ahead, how to block the book’s distribution in Thailand.

According to the document, the government contacted the American law firm LeBoeuf, Lamb, Greene and MacRae, which told it that publication would be impossible to stop on constitutional grounds. Such efforts would generate unwanted publicity, the lawyers advised.

The document said the authorities had banned the book in Thailand on the grounds that it was a threat to stability. It said Thai officials had contacted the Yale University president, Richard Levin, and had sought the help of former President George H. W. Bush, an alumnus of Yale.

For fans of royals as royals, Mr. Handley offers up plenty of what might be classified as high-class dish, like a recounting of the mystery surrounding the death of the king’s elder brother, Ananda, who was found in 1946 in his bed with a bullet through his head six months after being crowned king. (The official version at the time was that Ananda had accidentally killed himself.)

King Bhumibol was born in the United States, grew up in Switzerland and married the lithe, pretty Princess Sirikit, a favorite of the 1960’s jet set, who by the 1980’s had weathered into a much more fulsome version of a queen with her own court favorites, expensive tastes and pet charities.

The book describes their only son, Vajiralongkorn, as a willful man prone to violence, fast cars and dubious business deals. It may well be, Mr. Handley suggests, that the king’s favorite daughter, Princess Sirindhorn, who is a dutiful royal with wide-ranging interests in rural development and architecture, will be his successor.

“Bhumibol’s most fundamental failing is the Achilles’ heel of every monarchy: he has been unable to guarantee an orderly succession to a wise, selfless, and munificent king like himself,” the book concludes.

Wider Ban on Political Activities

BANGKOK, Sept. 24 (AP) — Members of Thailand’s military council on Sunday issued new orders intended to stave off opposition to their coup, banning political activities at the district and provincial levels.

The military has been restricting freedom of assembly and pressing the news media into self-censorship. One of the first actions it took was to declare martial law, which barred public gatherings of more than five people.

Speculation has been rife in Thailand that Mr. Thaksin may have taken some of his wealth out of the country just before the coup, but there has been no confirmation of this from the military council. Airline officials said Sunday that two planes chartered by Mr. Thaksin days before the takeover were carrying more than 100 cases and trunks. He was at the United Nations when the coup occurred and is now in London.

Thai Junta to Stay After Appointing P.M.