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Thailand’s new finance minister, Surapong Suebwonglee: the surprise choice for the job has been impressive |
IT WAS A simple act but, for Asia, an unusual one. If it catches on, it could mark a new era for how economic policy is executed in coup-plagued Thailand.
On March 8, in the surroundings of Bangkok’s mock-Venetian palazzo of a Government House, Thais witnessed a rare display of national unity when the country’s shadow finance minister called on his recently elected opposite number in government, who graciously received him.
Under the scrutiny of TV cameras, Korn Chatikavanij, the Democrat Party’s charismatic deputy leader, was warmly met in the palazzo’s grounds by aides of Thailand’s new finance minister, Surapong Suebwonglee. "I don’t think this has ever happened before," Korn noted, as he was ushered in to meet his counterpart. Then the two men, flanked by suited advisers, spent 45 minutes politely debating policy. Euromoney sat in on the meeting as Korn proffered the Democrats’ alternative blueprint for the economy, explaining that the Democrats’ policies – notably stimulating a sclerotic economy with domestic spending – were broadly of a view with Surapong.
The minister nodded approvingly, prompting Korn to quip that if the new government actually instituted the Democrats’ fine-tuning, Surapong will be guaranteed office "for a long time".
Such niceties are uncommon in Asian politics. In a region of immature democracies, political adversaries are mostly mortal enemies best avoided, ignored and, in some countries, sued into oblivion, jailed and sometimes even killed. But Surapong recognizes that the Oxford-educated Korn, JPMorgan Chase’s former country chief in Bangkok, has the experience that warrants his at least being listened to.
So, after sustained instability and uncertainty, might this at last be a new era that Thais, whose economy and democracy were strangled by the September 2006 military coup that ousted Surapong’s controversial ally, the billionaire Thaksin Shinawatra, so anxiously hanker after?
That’s the optimistic prospect. However in Thailand’s opaque intersection of business and politics, things are not always as they seem.
As Surapong and Korn were amiably debating policy, a more telling shadow was busily networking in the grounds outside while monitoring events inside. Suparat Nakbunnam, according to Thai media, is "very close" to Thaksin – an "intermediary", as one official described her. Immaculately groomed in Chanel, and expensively coiffed, Suparat’s official title is deputy government spokesperson, one of a kitchen cabinet lurking at the fringes of the new government. With her ear never far from her mobile phone, she wouldn’t talk to Euromoney, claiming she was too busy.
Korn and his youthful Democrats might eventually get their turn in Thailand but it’s Thaksin Shinawatra who again casts the biggest shadow over a new government formally led by warhorse politician Samak Sundaravej. One of Samak’s first acts was to allow Thaksin to return to Bangkok from exile. He still faces corruption charges brought by the previous military junta, but he is expected to beat them. Thaksin is not officially part of this administration, which Thais elected on December 23, and is at pains to insist he’s not an adviser to it either, informal or otherwise.
Indeed, his office maintains that his primary interest is shepherding his $200 million investment in Manchester City, the English Premier League club he bought last year while in exile. One foreign banker here says: "If you believe that, you’ll also believe that City will win the Treble this year."
Asia’s Putin
Nor are Thais convinced of Thaksin’s claim that he’s out of their lives. Indeed, they don’t seem to much mind that he isn’t, seeing the formal prime minister, Samak, as providing a balance to Thaksin’s authority. Samak’s ruling People Power Party is a near carbon copy of Thaksin’s Thai Rak Thai party, which was outlawed by the generals soon after they ousted it with all-important royal backing.
Indeed, so tight are the links to Thaksin that it has become common parlance in Bangkok to refer to the first Thaksin administration as "Thaksin-1" and this new Samak government as "Thaksin-2", even though Thaksin is, officially, nowhere near it. Key posts in the civil service are changing to Thaksin allies, which Thais see as revenge. The government denies that, arguing that it requires good cooperation between ministers and trusted civil servants.
Thaksin, who wouldn’t be interviewed, became one of Asia’s richest men after a business career in telecoms and media. That earned him the sobriquet "Asia’s Berlusconi" when he became prime minister in 2001, a nod to the controversial Italian tycoon-politician Silvio Berlusconi. But Thaksin’s dealmaking led to his undoing; his sale of his telecom Shin Corp tax-free to the Singapore government-owned Temasek Holdings in early 2006 sent Thais on to the streets in protest, and the military from its barracks to topple him. Two years on, Thais now nod to Russia for foreign comparisons, dubbing Thaksin "Asia’s Putin" – a man who effectively heads the government without occupying formal office.
Thais are skilled at euphemisms, which are also evident in banking and the economy in Bangkok these days, where it has become impolite to describe as a "crisis" the mid-1990s financial meltdown that began with Thailand’s mismanagement of the economy and subsequently raged around Asia. That dark period – from which Thailand has yet to fully recover – is now called a period of "credit deterioration". And when Thais refer to the recent "slowdown", it’s shorthand for the two-year rule of the military junta, when economic growth was wound back to about 4% after Thaksin’s buoyant years of 6% to 7% GDP growth.
So it’s little wonder that investment bankers are thin on the ground in Bangkok. With richer pickings in China, Thailand’s deals tend to be served by briefcase bankers jetting in from full-service regional headquarters in Hong Kong. Foreign focus has tended to be on retail banking: GE Capital’s purchase of Bank of Ayudhya and ING’s partnering with the struggling TMB, the rump of the old Thai Military Bank. Canada’s Scotiabank recently took a stake in Thanachart, which is strong in consumer financing, particularly car loans, and the Singapore government-controlled DBS Bank has bedded down Thai Danu Bank.