Thursday, July 27, 2006

Thaksin Does Good Routinely?

Thai caretaker Prime Minister Thaksin Shinawatra celebrated his 57th birthday yesterday. Happy birthday Thakky boy. Shinawatra has been prime minister since 2001 and was re-elected in 2005 with a landslide victory. However this year he was placed under pressure to resign after a financial scandal. In March the opposition parties demanded the King replace Shinawatra. Shinawatra retaliated by calling a snap election which was boycotted by the Opposition. Shinawatra won but the Constitutional Court declared the election invalid. Shinawatra remains ‘caretaker’ Prime Minister while the country awaits fresh elections.

Shinawatra’s family are originally from Guangdong province in Southern China. His great-grandfather Seng Sae Khu moved to the northern Thai city of Chiang Mai in 1908. The family changed its name to Shinawatra which means “does good routinely”. The family grew wealthy as tax collectors and then by moving into finance, construction and property development. The Shinawatra family became one of the richest and most influential families in Chiang Mai. Thaksin was educated at an elite Chiang Mai school and joined the Thai Police Department in 1973 aged 24. In 1975, he got his master's degree in criminal justice from the Eastern Kentucky University and obtained his doctorate in three years later from the Texan Sam Houston State University. He moved up through police ranks and married the daughter of a police general in 1980. His initial business dealings were failures and he ended up 50 million Baht in debt.

Shinawatra didn’t achieve any business success until he left the Police in 1987. He got into mobile phones and his big break occurred in 1990 when his company Advanced Info Service launched analogue mobile phone services. This required an important concession from the Telephone Organization of Thailand. It was listed on the Thai stock exchange a year later and became the largest mobile operator in the country.

He entered politics in 1994 joining the Palang Dharma Party (PDP). At the time it was a member of the ruling coalition and after a purge of its cabinet ministers Shinawatra was quickly appointed Foreign Minister despite not being an elected MP. The PDP withdrew from the coalition a year later and brought down the government. In the subsequent election Shinawatra was handpicked to take over the party by his mentor the retiring leader Chamlong Srimuang. The party lost half its seats in this election but still took its place in a new coalition. Shinawatra was appointed deputy PM and was given charge of perhaps Thailand’s most vexing problem – Bangkok traffic.

Shinawatra resigned from parliament in 1996 but reappeared a year later in yet another coalition. He formed a new Party: Thai Rak Thai (Thai love Thais). Their election platform (universal access to healthcare, a debt moratorium for farmers, and a development fund for all Thai villages) proved immensely popular and TRT swept to victory in 2001. It was only the second time in over 70 years of Thai democracy that that a single party had gained outright government. The government instituted a series of reforms that were dubbed “Thaksinomics” a set of populist economic policies designed to increase the purchasing power of Thailand's rural lower classes, which make up the majority of the country's population. It seemed to work and by 2002 Thailand outpaced the rest of Southeast Asia by posting GDP growth of 5.2%, the fastest rate since the Asian financial crisis of 1997.

Since the beginning of 2005, however, the wisdom of Thaksinomics has been increasingly questioned. Though the TRT won another landslide victory that year, economic growth has slowed down. Shinawatra blamed this on the Indian Ocean Tsunami which devastated much of Thailand’s west coast tourist resorts. However rising inflation, consumer indebtedness and trade deficits are also hurting the Thai economy as a direct result of Thaksin's policies. Corruption and the slow progress of Bangkok’s new airport are also factors.

The crisis this year started as a result of the Shinawatra family decision to sell entire stake in Shin Corporation to Temasek Holdings (worth almost $2 billion US). The Thailand Securities and Exchange Commission investigated the transaction but cleared the family of wrongdoing. There were a series of mass protests led by opposition parties looking for the PM’s scalp. The King was asked to appoint a replacement in March but he declined stating it would be unconstitutional. Thaksin dissolved parliament but the opposition boycotted the subsequent election. In May a court ruled the election invalid and ordered new elections. The opposition has declared they will take part but no date has been set. In the meantime Thaksin clings on to power.

1 comment:

Anonymous said...

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