Mending the fences: Thanks to FIFA, Thai football fans put away their politically colored shirts to spend sleepless nights watching the World Cup matches in South Africa. News of favorite teams and players dominated most newspapers and TV screens. An avid football fan himself, PM Abhisit has, however, managed to accomplish most of what he had promised. On 7/6/10 he left for half a day trip to Vietnam, to attend the World Economic Forum and meet up with Asean leaders at the Greater Mekong Subregion summit meeting. He took the opportunity to brief world’s business leaders of the current political situation in Thailand and to assure them that his government was taking every possible step to restore law and order while moving the country forward toward national reconciliation.

On 7/6/10 he announced another cabinet reshuffle (5th), with eight new ministers mostly from the Democrat Party. Throughout the month, the Abhisit government continued to address the country’s most urgent economic issues i.e. severe El Nino drought (worst in 18 years) that had delayed rice planting by at least six weeks. The Map Ta Phut environmental problems were finally sorted out, with 18 activities to be banned and clearer rules and regulations to become effective by year-end. After years of frozen salaries, civil servants were granted a special bonus to be paid out in 10/10 and a 5% salary increase to be effective in 4/11.

Farmers’ problem loans too were being refinanced or restructured with hefty haircuts. The first lot of community title deeds was given out. Shooting prices of sugar and eggs were promptly addressed and lowered. Rescue package for those affected by the Ratchaprasong shutdown and arson was fine-tuned and extended to include foreign businesses in the area. To ease the burden of the urban poor, free electricity (max. 90 kw), free (hot) bus, free (third class) train and subsidized LPG, were extended till year end, when PM Abhisit hope to make some of them permanent.

By Vongthip Chumpani*

Reform Thailand: To restore social equilibrium, PM Abhisit quickly launched his 5-points National Reconciliation Roadmap. Sombat Thamrong-thanyawong, a respected academic was appointed to chair the panel to scrutinize changes to the Constitution. Former Attorney General Kanit na Nakorn was chosen to head the independent fact finding panel called Truth and Reconciliation Committee, to probe into the root causes of the violent clashes in 5/10 within two years. On 18/6/10 former PM Anand Panyarachun agreed to head the independent panel to set out national reform policies.

He would be working closely with Dr. Prawase Wasi, a highly respected social commentator, who was asked to lead the National Reform Assembly to gather public views on how reforms should be implemented to overcome social disparities. Implementation plan would be worked out within three years, with an annual budget of THB 200 million. PM Abhisit also appointed Yubol Benjarongkit to set up a panel to kick-start reform of the media. Last but not least, Pol Gen. Vasist Dejkunchorn was invited to chair the panel to restructure the police force.

Do you hear what I hear?

In the belief that public policies should come from the people, not from a few people with their own agenda, PM Abhisit has initiated a number of public hearings in earnest. On Rice Day 5/6/10, farmers were invited to air their views at the government house. In successive events, PM Abhisit extended his invitation to various sectors of the Thai society e.g. NGOs, civic groups, academics, local and international business groups, foreign diplomats, foreign investors, local and foreign mass media, to share and exchange their views with him on national reconciliation and reform issues that were important and of special concern to them.

For six days, the PM, his cabinet members and hundreds of civic minded volunteers took turn to man some 300 telephone lines opened to any callers who wished to air their needs, recommendations and complaints. Most of the issues raised were related to the current economic hardships. Many were to give encouragement to PM Abhisit and his government. As expected, there were earfuls of abuses and insults from those who sympathized with the red shirt movement. Based on the number of calls on the subject, the ministry of finance had to set up a special hot line to record problems related to loans in the unorganized market. All input were documented and sorted out for further analysis and solutions under the national reconciliation framework.

CRES’ emergency

The Center for the Resolution of the Emergency Situation CRES has estimated that some THB 30 billion was spent on financing the red shirt movement’s political activities. Some 83 individuals and firms suspected of funding and acting as financial proxies for the red shirts were identified and told to clarify their financial transactions from 9/09 to 5/10 to CRES investigators representing the DSI – Department for Special Investigation, the Revenue Department, the Anti-Money Laundering Office and the Office of the Narcotics Control Board.

Through it all, there were death threats against key government officials and a few bomb explosions at some of the 68 targets identified by the security people. Two red shirts were arrested in Siemreap and sent back to Thailand by the Cambodian government for masterminding the bombing of the Bhumjaithai Party headquarters In spite of private sector’s recommendation to the contrary, the Abhisit government decided to maintain the Emergency Decree in Bangkok and in 19 provinces in the Northeast and the North as a matter of precaution against threats of another major violent outburst.

All quiet before storm?

In 6/10 Thaksin has kept a low profile and did not call home as was the habit. Instead, his cause was aptly amplified by a team of international lobbyists, led by a Robert Amsterdam who made strategic and systematic attacks on the Abhisit government, accusing them of colluding with the Thai military to violently crack down on the red shirt movement and to permeate a non-democratic government. Throughout 6/10, there was a stream of negative foreign press and TV reports on Thailand. Thaksin’s “hired guns” took actions to discredit the Abhisit administration with the U.N. Human Rights Council, the U.S. congress and the European parliament.

Alas, the Abhisit government was able to contain the damages. UNHRC elected Thailand’s ambassador Sihasak, not only as a member but also as chairman of the council. The US Congress voted 441:4 in favor of PM Abhisit’s national reconciliation roadmap. A Bangkok by-election on 27/7/10 was expected to be a good indication of the snap election, to be called some time next year. It would go to show whether the Puea Thai candidate, a core red shirt leader arrested and jailed for terrorist activities, could win over a Democrat candidate, former deputy minister of foreign affairs responsible for “hunting down” Thaksin as he flew all over the world in his private jet.

A pleasant surprise

Notwithstanding the bloody political mess in 4-5/10, Thailand’s economic resilience has been substantiated once again by the better than expected 5/10 data. Public debt was down to 42% of GDP. And government budget deficit this year was expected to be only 3.5% of GDP. Investment has also picked up, mostly in machinery and equipment to support future export orders, with capacity utilization between 65-70%. Export of farm goods increased 42% yoy. Total export went up to USD 16.44 billion and import USD 14.14 billion. Trade balance was positive again at USD2.3 billion. Current account balance was USD 1.0 billion in the black. Balance of payment however recorded a deficit of USD 989 million. International reserves dipped slightly to USD 143.5 billion.

As at end of 6/10, THB remained firm at THB 32.37 to USD, THB 36.23 to Yen, THB 39.71 to Euro and THB 48.67 to Sterling. In spite of net capital outflows from equities and bonds, the SET ended the month on a firm note at 797. Interest rates remained unchanged. The country’s 2010 GDP forecast was adjusted back to 5 – 6% and inflation to 3.5%. Export for 1-5/10 totaled USD 75 billion, up 34.5% from the same period of last year. The only bad news came from tourism, down by 20.2% in 4/10 and 12.9% in 5/10, with average hotel occupancy rate at only 30%. Arrivals from Asean and East Asia declined the most. Increased political stability was however expected to attract tourists from Europe and North America for the peak season starting in 10/10.

Businessmen’s pitch

To move the country forward, the Thai private sector has come up with their own four pronged economic development plan, to be undertaken jointly by regional chambers of commerce and provincial federations of industries. They would focus on increasing the farmer income, beefing up regional tourism, improving basic infrastructures through reduction of national logistics cost (from 19% to 14% of production cost), and increasing cross border trade, in preparation for Asean Community integration in 2015. The business community in Thailand has come to appreciate the necessity and the urgency of redressing the country’s huge wealth distribution gap.

They have been pitching in with their own contributions in cash and in kinds. They would be coming up with new ideas and recommendations with regard to PM Abhisit’s latest challenge to substantially increase the minimum wages in exchange for tax incentives. While many believed higher minimum wages would give the poor a chance to upgrade their lives and thereby stimulate domestic spending, others cautioned that inflation could soon neutralize the benefits and make Thailand less competitive as an FDI destination. Ultimately mutually acceptable solutions would materialize as Thai society learnt how to constructively work out their differences and share the wealth of their nation more equitably.

* Vongthip Chumpani is an advisor to and former president of Bangkok Bank and a former advisor to the Senate Foreign Relations Committee. All views and opinions expressed herein are entirely from her own personal observations.

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Bangkok burning: May was a most agonizing month for the people of Thailand. Hardcore red shirts moved ferociously to expand their territory further into Bangkok CBD. With the number of casualties increasing by the day from snipers and M79 grenades, the Abhisit government declared 17-21/5/10 as public holidays in Bangkok, during which Bangkokians stayed put, bracing themselves for further violence. In the early hours of 19/5/10, the army began their offensive manoeuvres to remove red shirt barricades around the Ratchaprasong area.

By early afternoon, the red shirt leaders announced an end to their demonstration and, before giving themselves up at the police headquarters, urged some 3,000 remaining protesters to go home in government’s prepared coaches. Hundreds of protesters, however, refused to leave. They went instead into the temple next door, Wat Pathum Wanaram, to spend the night. Throughout that afternoon and evening, hard core red shirts together with “men in black” were shooting and throwing M79 grenades at the soldiers.

They roamed the city and set fire to some 36 buildings all over Bangkok. That night, the red shirts also burned down the provincial city halls in Ubon, Udon and Khonkaen. Meanwhile, corporate Bangkok kept their cool as they calmly switched on their emergency systems and went on damage control modes. Meanwhile 43 countries issued their strongest warning against traveling to Thailand. The international community was stunned by the violence, unseen before in this “Land of Smiles.”

By Vongthip Chumpani*

Together we can! On 23/5/10 the Rajprasong area was finally cleared by the military and returned to BMA. Tens of thousands of young and old Bangkokians immediately put on their work gears, rolled up their sleeves and spent the whole Sunday cleaning up the streets and the sidewalks where the red shirts had camped out during their 70 day demonstration. On 24/5/10, Bangkok schools were opened, people went back to work and life returned to normal, except for the midnight curfew. To cheer people up, singers and artists came out in full force to write songs and stage concerts about peace and unity.

On Visakha Puja day (28/5/10), people flocked to temples all over the country to pray for peace and national reconciliation. The following weekends, Silom and nearby streets were turned into weekend markets for thousands of entrepreneurs who lost their shops and inventories in the inferno. Like New Yorkers after 9/11, Bangkokians have come to realize how precious their “City of Angels” was. People from all walks of life have joined hands with the government and BMA to revive Bangkok and put the country back on track again.

Collateral damages

It did not matter whether they were soldiers, red shirts, innocent bystanders, volunteer workers or journalists, the country mourned those 88 people who lost their lives and sympathized deeply with 1,885 people who were injured during the violent crashes. Total damage to properties, infrastructures and the economy was estimated to be as high as THB 150 billion. Most damaged were of course Thailand’s confidence, credibility and image in the global community.

In the last two months, most tourists have disappeared from the streets of Bangkok, many FDI investors were reported to have shifted their investment elsewhere, and foreign investors have sold over THB 50 billion of their portfolio holdings. A few foreign mass media too have been dragging Thailand through mud on account of their favorite theme i.e. military violently cracked down on peaceful demonstrators who were fighting for democracy and equality”. Over night, Thailand’s young and old generations have turned activists in the defense of their “king and country” in the cyber world. Even the powerful CNN was not spared!

Healing time

After the red shirts went home, the curfew was called off on 29/5/10 and PM Abhisit was able to reaffirm his legitimacy by sailing through the 2011 budget parliamentary debate on 24-26/5/10 and the no-confidence debate, called for by the Opposition, on 31/5-2/6/10. With the Lower House in recess until 8/10, PM Abhisit would have more time to focus on stabilizing the situation in and outside Bangkok, set up independent committees to investigate the violent incidents, bring the leaders (including Thaksin), instigators, financiers and operators of the terrifying insurgence to court, and restore confidence locally and abroad.

Now that a snap election has been ruled out, an immediate cabinet reshuffle was imminent. Efficient and effective implementation of short term rehabilitation programs and long term political and social reforms, particularly in contentious areas, would have to be carried out before election time. Mindful of the possibility of renewed conflicts, more people have pitched in to help direct and protect their country from greedy politicians and corrupt bureaucrats.

Down but not out

The on-going political turmoil has started to infect the remarkable economic growth of over 12% in 1Q10. In 4/10, industrial utilization went down to 62.3%. Exports slumped to USD 13,832 million and imports to USD 14,022 million, resulted in a trade deficit of USD 190 million. Current account balance also was USD 423 million in the red. However, balance of payments showed a USD 3,749 million surplus, including a net capital inflow of USD 2,999 million. International reserves went up slightly to USD 147.6 billion. Consumer price index was 3% and core inflation 0.5%. 1Q10 healthy unemployment rate of 1.3% (430,000) was expected to deteriorate in the aftermath of the political crisis.

With consumer confidence index at 9 months low, the Bank of Thailand decided to maintain Repo rate at 1.25%. Contrary to earlier fear, the SET ended the month at 750. The Baht weakened to THB 32.50 to USD/THB 40 Euro/THB 35.29 to Yen. Considering FY 2011 fiscal budget spending of THB 2.07 trillion together with government’s THB 100 billion rescue packages for victims of the 19/5/10 inferno, both the public and private sector believed GDP growth this year could still be maintained at around 3.5% to 4.5%.

Going forward

Being used now to expect the unexpected, the highly resilient Thai business community was able to scramble quickly back on their feet, albeit not without the usual heartaches, headaches and pains. This time around, the Abhisit government has been quick to provide a timely and comprehensive rescue packages to compensate and help those who were badly hit by the fiery demonstration. An economic take-off, however, would depend very much on our own still-unfinished political power struggle as well as the severity and spill-over of the EU’s sovereign debt problem.

With Thai tourism down on its knees, export would continue to be the country’s key engine for growth this year. Although events of the last two months have been damaging to Thailand’s credibility in the eye of the world, many of our foreign investors and friends have continued to stand unswervingly by us. Their knowledge, patience and understanding about our “family fights” have been most comforting and deeply appreciated.

Flying with doves and hawks

Although the dust has not quite settled, many people were moved to express their deep gratitude to PM Abhisit, for having brought the country back from the brink of anarchy and civil war, albeit not without a great deal of sweat, blood and tears. They have come to appreciate PM Abhisit’s quiet and unassuming leadership, wisdom, patience, endurance and personal sacrifices that were taken for granted by those who could not possibly imagine the magnitude and complexity of his heavy task.

During those dark days, the young PM had bravely walked through hellfire to keep Thailand on the democratic path while endeavoring to end the country’s most violent political uprising, with the least possible casualties and collateral damages, and without any military coup! To keep law and order and bring about reconciliation and healing, he had to battle against “enemies from within” and fight off panicky supporters as well as hawkish critiques. Under so much seen and unseen constraints, Thailand was indeed lucky to have PM Abhisit at the helm during the country’s worst ever political storm.

Professionalism vs. terrorism

Many friends of Thailand have quietly commended the Thai military for having led one of the most faultless peace keeping exercises we have ever seen on 19/5/10. Their strict adherence to international standards and procedures for riot control had gone a long way to end the escalating violence of the armed militants among the red shirts. The military did well also to team up with the government to brief the nation every step of the way about their mission and operations. This was both comforting and reassuring particularly to those who were petrified by the red shirts’ violence, unseen before in this country.

Notwithstanding some biased press reports, most people have come to appreciate the risks that both local and foreign journalists and cameramen took to bring instant news of what was going on to them. Last by not least, the people of Thailand could definitely pat themselves on the back for their own common sense, sensibility, restraint, tolerance, peace loving and forgiving nature, without which Thailand could have easily gone into a civil war mode.

Let us hope and pray that no more life would be cut down so brutally because of bitterness, anger and hatred that were fueled by the greed for power and money, not to mention the revengeful desire, of some sore political losers to destroy even their own motherland!

* Vongthip Chumpani is an advisor to and former president of Bangkok Bank and a former advisor to the Senate Foreign Relations Committee. All views and opinions expressed herein are entirely from her own personal observations.

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Long live HM the King: On 5/5/2010, all warring factions in Thailand called for a truce to take time out to celebrate (in their own way) the 60th anniversary of HM the king’s coronation. Once again HM’s loyal subjects were seen shedding tears of joy as they sat watching their beloved king on TV. Their get-well wishes, prayers and merit makings for HM have indeed borne fruits. HM appeared healthy and strong again during the traditional ceremony to mark the historical occasion at the Grand Palace.

No matter how much people fought with one another, they could never forget HM’s plea for national unity whenever he appeared live on TV. Once again, the people’s faith and pride in their national heritage were restored, and national unity and reconciliation seemed to be back within their grasp! Most Thais bowed their heads to thanked heavens for giving them a loving, selfless and wise king who has always put his country above all else.

Another bloody April: Thailand’s messy political unrest was back on world’s TV screens again this April. When the red shirt failed to show up for the third round of negotiation on 8/4/10, PM Abhisit cancelled his trips to Vietnam (Asean Summit Meeting) and to Washington D.C. (world’s first nuclear summit meeting). A state of emergency was declared in the red shirt zones in Bangkok to contain the ballooning red shirt demonstration. On 9/4 more red shirts joined the protest after the government shut down their PTV. Soldiers guarding Thaicom transmitting station were attacked, disarmed and sent away by scores of ferocious red shirts.

By Vongthip Chumpani*

The next day, all hell broke loose when hundreds of soldiers, armed only with anti riot equipments, were sent in to “claim” Phan Fa back from the demonstrators. Although the two sides were supposed to be unarmed, grenades and deadly war weapons were used by armed “men in black,” seen moving stealthily among the red shirts. A well known senior army commanding officer and a Japanese Reuter reporter were among 25 people killed and 900 wounded in the melee. All Songkran celebrations were cancelled. On 14/4, the red shirts decided to move their base from Phan Fah to Rajprasong.

As the result, all 5-stars hotels, shopping malls and condominiums in the area were shut down. Scores of countries stepped up their travel advisory to warn their citizens against traveling to Thailand. Overnight, tourist arrivals slumped and Bangkok’s average hotel occupancy shrank to 8%. Financial damage to the tourist industry, estimated to be in tens of billion, was not greater than the loss of international confidence in the country. Concerned foreign investors took turn to warn Thailand against further violence and disregard for law and order. Negotiation was the best way out.

Multi-colors fighting back

During the second half of 4/10, Bangkok citizens could no long stand by and watch. Several informal civic groups started to demonstrate daily against the red shirt movement, their demand for parliament dissolution, their violence and their total disregard of basic human rights of Bangkokians. On 16/4, some 300 policemen tried in vain to arrest four red shirts leaders whose dramatic escape from their hotel rooms was seen real-time on TV screens! Buoyed by their easy “victories,” the red shirts moved to expand their barricaded “territory” into Silom Road on 19/4.

Suddenly thousands of soldiers and policemen appeared to take up their defensive positions in the area. That evening a Silom resident was killed and some 80 people were wounded when grenades were thrown into the commuter crowds in the Saladaeng area. On 22/4 there was another violent skirmish on the highway around Anusornsathan. One soldier was killed and scores were wounded, again by the “men in black.”

The last straw came on 28/4 when hardcore red shirts forced their way into Chulalongkorn Red Cross Hospital, supposedly in search for soldiers hiding in there! The next day, hundreds of in-patients were moved out and the hospital was shut down. The unconventional and violent behaviors of the red shirts were condemned by the government, the public, human rights NGOs in and outside the country. Overnight the red shirts’ credibility evaporated.

The red army

In April, people in Thailand were repeatedly shocked beyond belief by the depth and the extent of aggression, violence and bitterness of the red shirt leaders and their foot soldiers. Many have come to believe that while most Thais were hoping and praying for a peaceful national reconciliation, the Thaksinists were actually working full time to overthrow the old regime (amataya) and replace it with their own regime (ratthaimai).

To topple their opponents, the red shirts, Puea Thai party, and their contingent of “men in black” have been simultaneously employed to create and co-ordinate the on-going political conflicts and chaos in and outside the parliament. The red shirt movement was setup to systematically indoctrinate and instigate both the rural and the urban poor to fight against the “amataya” government and military, supported by their own communication channels ranging from PTV, newspapers, magazines, books, pamphlets, DVDs, Facebook etc.

The whole operation was liberally funded and supported by Thaksin, his family, friends and associates in and outside the government. With so much at stake, many people believed peace and unity could not possibly return to this country without drastic reformation.

The beginning of a downtrend?

Notwithstanding the loss in tourism industry (estimated to total some THB 7.5 billion in 3/10 and 4/10 because of the political unrest), the Thai economy as a whole continued to show remarkable performance in 3/10. Private consumption index rose by 8.7% yoy while private investment index jumped 18.2%, a 10-month high. There was however a marked decline in consumer and business confidence that could dampen 2Q10. Export was the major growth engine, rising 14% yoy in 3/10 to USD 16.9 billion. Imports rose by 62% yoy to USD 15 billion, with gains recorded across the board for consumer and capital goods as well as raw materials.

Manufacturing index increased by 32.6% yoy, driven by higher production of electronics, automobiles and electrical appliances. Trade balance, current account balance and balance of payments remained in the black at USD 1,090 million, USD 1,734 million and USD 3,137 million respectively. International reserves rose to USD 144.1 billion. Capital inflows totaled USD 2.5 billion, including FDI worth USD 700 million and USD 535 million in equity portfolio investment. The SET closed at 763 at the end of 4/10. The Baht remained firm against the Euro but steady at THB 32.33 to USD.

Interest rates were left unchanged across the board. GDP growth rate, however, was expected to plunge some 2% from the recently forecast of 4.3%-5.8%, if the red shirt protest were to continue until year-end! With so much doom-and-gloom reports on Greece and Portugal, Thai businessmen have started to put on their safety belts as world economy seemed to be heading for another rough ride.

Abhisit’s roadmap

On 3/5/10, PM Abhisit’s sprang a surprise on his friends and foes alike when he announced his roadmap for national reconciliation. Like a light at the end of the tunnel, the proposal was warmly welcomed not only by the majority of the Thais but also by foreign investors and friends of Thailand abroad. They believed PM Abhisit took this bold step solely for the benefit of country i.e. to avoid further violence and bloodshed that could easily escalate into anarchy and civil war. If agreed and accepted by all concerned, the red shirts will have to disperse immediately.

The Thai society, including the mass media, will then join hands to move the country forward, to protect the monarchy, and, to ensure social justice (by offering greater opportunities to the less privileged). To ensure truth and justice, an independent committee will be set up to investigate the April crashes that resulted in deaths and injuries. The parliamentarians will work together to set up rules and regulations for political demonstrations as well as to propose constitutional amendments. There will of course be no amnesty for those with criminal charges. As expected, many of PM Abhisit’s fervent supporters came out to oppose the roadmap.

They could not understand why the PM has to bow to the demand of the red shirts, whose 9 core leaders have been charged with acts of terrorism and violation of the emergency decree. Most saw no justification for parliament to be dissolved during the second half of 9/10 and for an election to be scheduled for 14/11/10. Many were worried that there would be an unprecedented use of money and violence to contest and win the next election. Others were simply fearful of the return of the Thaksin regime.

Enough is enough!

At a time like this, most Thai citizens believed they would have to keep their cool, put their own egos and self interest aside, stop blaming one another, refrain from bashing the government for failing to get the country out of this political mess and/or for not taking the course of actions they believed to be the best. Many people, however, would have to learn to base their political opinions and decisions on proven facts, rather than on here-says, biased instigations, unfounded rumors and false accusations – all of which have gone to create and intensify the current state of political confusion and social chaos.

Politicians too would have to curb their greed and their urge to take political advantage at the expense of national peace, unity and prosperity. There should be no more “water melon” military, “tomato” police and “strawberry” media! With national and internal security now at stake, law enforcement would have to be prompt, unbiased and effective. Unless all this were to happen, Thailand could be in for a civil war or become a failed state before too long!

* Vongthip Chumpani is an advisor to and former president of Bangkok Bank and a former advisor to the Senate Foreign Relations Committee. All views and opinions expressed herein are entirely from her own personal observations.

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Abhisit’s red hot summer: March 2010 was indeed a month for a crash course on Thai democracy, not only for the Thai society but also for the international community. Political pundits have been holding their breath for weeks while the Abhisit government tried everything possible to steer the country away from another political breakdown. When the red shirts announced their final D-Day on 12/3/10, PM Abhisit cancelled his trip to Australia & New Zealand that week and went ahead to invoke the Internal Security Act from 11-23/3/10 to prepare for the “red flood” from upcountry into Bangkok.

Since then, some 30,000 soldiers, 10,000 police and 10,000 civilian volunteer forces have been mobilized to provide security at the red shirts rallies as well at scores of prime target spots, as listed out by the red shirts for their mobile visits and for the nocturnal bomb throwers. Soon enough, both local and foreign who-is-who’s came out in full force to voice their concern and plead for non-violence by both the protesters and the government.

Hide and seek game: Throughout the highly volatile situation, PM Abhisit and his cabinet kept their cool and endeavored to continue with their normal work schedules while going out of their way to dodge the red shirts’ highly aggravating mobile expeditions and antagonizing maneuvers e.g. laying siege at the government house, the parliament and the army base where PM Abhisit and his team were lodging and working in a war room to deal with emergency situations as they arose.

By Vongthip Chumpani*

Then there were those ghastly voodoo rituals e.g. drawing and pouring of 3,000 liters of the red shirts “own” (?) blood in front of the parliament, the Democrat Party headquarters and PM Abhisit’s own house! Faced with sabotage and death threats, PM Abhisit was given maximum security protection and had to be spirited in and out to chair the cabinet meetings, attend parliament sessions and other functions and events.

An April déjà vu?

For three weekends in a row Bangkok people either stayed put at home or left the city for the weekend to avoid city-wide traffic jams as tens of thousands boisterous red shirts were bussed in by Puea Thai MPs from the north and the northeast provinces to join their counterparts in Bangkok. Every evening they waited to hear their beloved master phone-ins, thanking them for coming, sweet-talking them to remain at the rally, pleading them to bring him home, urging them on to rise up against the powers-that-be and their political dictatorship and promising them great prosperity upon his return.

His themes for the fight varied from “Down with Amataya” to “Give back Democracy!” to “This is a class war” to “Dissolve parliament now!” The 3 week demonstration was televised live on PTV and got their fair share of attention from local as well as international mass media. During the weekends, more people were recruited to join the joy rides through the streets of Bangkok on hundreds of motorcycles and trucks.

Cat and mouse game

Things became increasingly more unsettling for the government when Thailand had to act as host of the IPU International Parliament Union in Bangkok and the first summit meeting of the Lower Mekong River Commission on in Huahin. With thousands of international delegates and mass media people in town, the Abhisit government could not do much to stop the red shirts from escalating their protest. Mindful of the public sentiments, PM Abhisit took the advice of the National Human Rights Commission and sat down to “negotiate” with three leaders of the red shirts on 28-29/3/10.

The two sessions (5.5 hours) were televised live on all TV channels, got the full attention of the nation and his popularity soared. Any glimmer of hope, however, was dashed when the red shirts unceremoniously rejected PM’s Abhisit’s road map to dissolve parliament in nine months vs their 2 week deadline. They flatly rejected his rationale: that all parties need to first agree on election rules and regulations and that there should be a guarantee of peaceful election campaigns.

When the red shirts walked away from the negotiating table, PM Abhisit flew off for his official visits to Brunei and Bahrain. A chance for the third round of talk evaporated when the red shirts started to escalate their “peaceful” protest to new limits.

Between the devil and the deep blue sea

Throughout the crisis, PM Abhisit reported regularly on the situation to the public on national television. Again and again, he emphasized that the red shirts’ had the right to demonstrate peacefully and that they could do so in accordance with the constitution and within the rule of law. In line with the people’s sentiment, he vowed not to use force to suppress the demonstrators.

He asked Bangkok residents to be patient with the traffic jams and other inconveniences for the sake of peaceful solutions. In the mean time, government security forces appeared to be failing again and again to exercise firmer measures to contain the aggressive crowds. When the red shirts moved to occupy and shut down the Ratchaprasong intersection on 3/4/10, Bangkok citizens lost their cool and started to show their frustration and anger, first at Thaksin and the red shirts and then at the Abhisit government.

As economic losses (from the tourist industry) started to climb, PM Abhisit was taken to task by the conservatives for failing to snip the demonstration in the bud and for failing to deal more firmly to end it. In the mean time, he was being accused of human rights violation by the protesters and warned against violence by the liberals at home and abroad.

High Noon

As the hot season’s temperatures continued to soar (around 40 degree), PM Abhisit’s policy to use international riot control measures and procedures started to falter. More red shirts were leaving the drought-plagued up-country to demonstrate in Bangkok while more Bangkokians left the city for their earlier-than-usual Songkran holiday. On 7/4/10 the red shirts broke the stalemate.

Their hard core contingent stormed into the parliament to hunt for PM Abhisit and DPM Suthep. The MPs had to end their session and flee the violent crowd by climbing down a wall-ladder behind the building. The incident prompted PM Abhisit to call for a special cabinet meeting to declare an emergency decree to deal with the rioting. Political rallies in and around Bangkok were forbidden.

The red shirts’ PTV was shut down and warrants issued for the immediate arrest of 19 red shirt leaders. Buses were sent to take the red shirts back to their home town. In defiance, the red shirts called for another big rally on 9/4/10. It would be a miracle if PM Abhisit could come out of this crisis unscathed. Waiting in the wings for their opportunity were the blue and the yellow shirts who have been sitting on the fence, enjoying the fight between the Democrats and the red shirts.

Amazing performance

Thanks to export, tourism and domestic consumption, the Thai economy continued to expand satisfactorily in 2/10. High farm incomes also drove sales of passenger cars, trucks, motorcycles and imported consumer goods (up 41%). Industrial capacity utilization went up a notch to 67.8%. Exports totaled USD 14.3 billion, down 23.5% yoy and imports USD 13.8 billion, down 80% yoy.

Trade balance, current account balance and balance of payments continued in the black at USD 452 million, USD 1,521 million and USD 119 million respectively. Official foreign reserves inched down slightly to USD 141.8 billion. Consumer price index went slightly down to 3.7% with core inflation at 0.3%. All interest rates remained unchanged and the THB strengthened slightly to THB 32.31 to USD.

In 3/10, notwithstanding the on-going political impasse, the SET went from strength to strength to end the month at 788. The exceptionally strong foreign fund inflows continued unabated and the SET broke the 800 in the first week of 4/10 before plunging on 7/4/10. Contrary to past track records, Thailand’s political risk seemed to have been discounted totally by foreign investors in 3/10!

Enterprising local investors, however, were more cautious, preferring to move in and out of the market to remain net sellers by the end of each trading day. More cautious local investors simply cashed out and went away to wait for better political situation.

Better late than never

Many people in the know seemed to agree that parliament dissolution could not solve Thailand’s current political crisis. For those who have been watching the red shirts’ reality show on PTV (to learn about the gullible upcountry folks and understand the reasons for their frustration and vulnerability), they could not help feeling disturbed by the fact that the rich and the strong members of the society have not been paying real attention to the plights of our weak and poor compatriots.

Bogged down by our deep concern for the country’s economic well-being and political power, we have indeed neglected our social problems. During this crisis, the Thai society has at last woken up to the fact that we all need to pitch in, make extra efforts and sacrifices to save the country from going over the brink, socially, politically and economically. Sad but true, we have all been just as guilty as anyone else for this social and political mess.

* Vongthip Chumpani is an advisor to and former president of Bangkok Bank and a former advisor to the Senate Foreign Relations Committee. All views and opinions expressed herein are entirely from her own personal observations.

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Beyond reasonable doubts: Thaksin’s “Judgment Day” has become another unforgettable event in the Thai political history. After weeks of being second guessed by academics and political pundits, nine judges of the Supreme Court spent almost eight hours reading their historical verdict which was broadcasted nationwide.

Thaksin was found guilty on all five cases for hiding his family shareholdings behind onshore and offshore nominees during his premiership, for conflict of interest, for abusing his power as head of the government, and for becoming unusually rich as the result of ruthless changes in policies, laws and regulations to benefit his family businesses.

The court ruled that the excess amount of THB 46 billion (out of THB 76 billion that had been frozen since 2006) was to be confiscated by the state. The remaining THB 30 billion would be returned after deduction of related income taxes, fines and other charges due.

By Vongthip Chumpani*

Sore losers! In the weeks before and after the “Judgment Day” on 26/2/10, there were an avalanche of abusive threats and a series of sinister warnings against PM Abhisit, key cabinet ministers, judges and their family members. Grenades were thrown at bank premises and a blacklist of 53 prominent people, who have spoken openly against the Thaksin regime, was made public.

Meanwhile, the majority of Thai citizens could not help feeling disturbed, harassed, threatened or even frightened by the daily verbal attacks from the pro-Thaksin camp. Many have started to call on the government to launch a nationwide campaign to clarify the court’s ruling in simple language so that it could be easily understood by gullible rural folks who planned to join the red shirts massive demonstration in Bangkok from 12-14/3/10.

The rule of law

While the red shirts were trooping all over the country in preparation for their one-million-protesters D-Day, the Abhisit government went ahead with the necessary steps to move the confiscated THB 46 billion into the state’s coffer. Related actions have also been taken by various government entities and the anti-Thaksin groups to bring civil and criminal charges against those who were involved in the five cases that had purportedly caused some THB 100 billion of damage to the state.

Meanwhile PM Abhisit continued to walk the tight rope, trying to keep the public cool and calm while making sure national security would not be compromised in the worst case scenario. In his weekly Sunday TV program, PM Abhisit held impromptu Q&A sessions with TV anchors and radio news commentators on current state of affairs, trying to reach out to both the mass media and the public to help the government promote peace and prevent violence.

“Guilty”

While Thaksin & Co. were lamenting the loss of his fortune, hundreds of thousands of people were feeling quietly vindicated and thankful that their stubborn efforts and long endurance had not been in vain. For two solid years they had demonstrated bravely and selflessly against all odds to get rid of Thaksin’s parliamentary dictatorship and his corrupt regime. These honest-to-goodness citizens had come out day after day to march, to stand, to sit and even to sleep on the streets in the scorching sun and pouring rain, against deadly teargas and hails of M79 grenades.

They therefore could not help but relish every moment of the eight hours that the Supreme Court took to spell out Thaksin’s dubious crimes in minute legal details before pronouncing him guilty of policy corruption and for creating unusual wealth at the expense of national interest. It was however somewhat of a let-down for them when only half of the THB 76 billion was confiscated. They believed that the actual damage caused by Thaksin to the country has been far greater than could be expressed in any monetary term.

More disturbing news

During the first week of 2/10, fully armed PM Hun Sen of Cambodia created quite a stir when he made a high profiled visit to Khao Phra Viharn where he was courteously welcomed by a Thai military contingent. At the border, he gave another abusive speech against the Thai PM, after he was asked to unarm if he wished to also visit Viharn Muentaprom on the Thai territory. When the GT200 bomb detector scandal broke, PM Abhisit gave a strong warning against their faulty and ineffective use, much to the embarrassment of the Thai military who stood firm about using this highly questionable (and expensive) instrument in the deep south.

Another scandal was triggered by a retired deputy secretary general when he spoke publicly about the blatant (and pricy) sale of appointment to key positions in the ministry of interior. This is very much along the same line as at the police department, where the appointment of their chief has yet to materialize! Meanwhile a rumor that the ministry of commerce would be dumping 2 million tons of rice from their stock pile, has sent rice prices tumbling, causing an unexpected and most untimely protest against PM Abhisit’s rice insurance program

Struggling to move ahead

Fortunately for the government, the economy was turning increasingly more positive, with tax collections well above the target. The cost of living and housing subsidy programs were scaled down or stopped to reflect the positive change in circumstances. The cabinet also approved the new master plan for mass transit systems, with two additional lines (pink and orange) and an extension of the airport link to Don Mueang Airport.

From now on, the Abhisit government would have to track the farm sector more closely again now that the hot season has arrived earlier than normal, with soaring temperatures and fast dwindling water supply especially in the northeast where even the mighty Mekong River seemed to be running dry. Mindful of the importance of FDI to carry on the economic growth momentum, PM Abhisit inaugurated the “One Start, One Stop” service center, set up specifically to assist foreign investors and facilitate their dealings with the Thai bureaucratic system.

More beautiful figures

In 1/10, private investment grew yoy for the eight consecutive months. Industrial capacity utilization was at 68%. Export increased by 31% yoy to USD 31.6 billion. Import shot up 50% yoy to USD 31.0 billion. Trade balance, current account balance and balance of payments were all in the black at USD 591 million, USD 1,997 million and USD 4, 966 million respectively. International reserves increased to USD 142.4 billion.

Consumer price index was 4.1% with core inflation of 0.5%. Unemployment went down to 0.9%. Improved consumer confidence fueled further private consumption. Bank lending grew 3% yoy, with interest rates remaining unchanged. The THB ended the month on a strong uptrend at THB 33.04/USD. The SET closed at 721 in spite of the on-going political problems.

It’s the economy, stupid!

In 2/10 the Thai economy has once again proved to be resilient and much stronger than expected. The actual figures of 4Q09 GDP (+5.7%) and for the whole of 09 (-2.3%) were most welcomed news. Business confidence index was also up in 1/10, as the legal impasse at Maptaphut has made some headway. This year, tourist arrivals were expected to reach 15.5 million.

Thailand’s GDP rate has been revised upward to 4.5% and as high as 5%-6% by the IMF and some international banks. Foreign capital inflow has been steady. Foreign investors seemed to have got used to Thailand’s political bickering and could now understand that the country needed more time to clean up the political mess because of the people’s fatalistic attitude, compromising nature and non-confrontation culture.

Let it be known

Most people believed the verdict of 26/2/10 would go down in history as an important milestone on Thailand’s long and rough road towards full democracy and the rule of law. This historical case did not only punish the former prime minister but also send out a strong message that the people of Thailand have wised up to those sinister political crimes and that they would no longer tolerate corrupt practices among politicians and government officials.

Most academics and political pundits have come to accept the fact that events of the last few years have changed the dynamics of this country forever. The Thai society would have to make further sacrifices in order to narrow the disparity between the haves and the have-nots, between the urban and the rural population. The government would have to be truly and sincerely mindful of the needs, expectations and aspirations of the majority of the voters.

Politicians and bureaucrats could no longer collude blatantly to take the country for a ride while enriching themselves from their dark and dubious schemes. Most believed Thailand still has a long way to go before we could restore the kind of peace and harmony that we have taken for granted in the last six decades!

* Vongthip Chumpani is an advisor to and former president of Bangkok Bank and a former advisor to the Senate Foreign Relations Committee. All views and opinions expressed herein are entirely from her own personal observations.

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Holding on: Following the burst of corruption scandals and in anticipation of the impending no-confidence debate, PM Abhisit had to replace/reshuffle five cabinet members in 1/10. Since the new year, PM Abhisit seemed to have become remarkably bolder in his move against corruption and arm-twisting demands from his coalition partners. He has also become more willing to risk his neck politically in order to deliver what he believed to be the best for the country.

His popularity soared when he insisted that all cabinet members abide by his “9 codes of conduct” and that they take responsibility by resigning when involved in a corruption scandal. Through out 1/10, PM Abhisit continued to deliver e.g. launching the THB 10 billion second Village Fund, publicizing fresh government direction and support for education on Teachers Day and Children Day, visiting the deep south to ensure effective and transparent utilization of additional development fund, opening new medical center for pollution-affected patients in the Map Ta Phut area.

Fragile situation: Notwithstanding the highly distracting political incidents and a cabinet reshuffle, PM Abhisit was able to address, with different degrees of success, those difficult-to-resolve domestic problems e.g. the Map Ta Phut environmental dispute, the corruption plagued Thai Khem Kaeng projects, the ineffective GT200 bomb detectors and airship, the forest land encroachment scandals, the 4-month delay in police chief appointment, the teething problems of Asean FTAs that became effective on 1/1/10, the negative report on Thailand by Human Rights Watch.

By Vongthip Chumpani*

To help the earthquake victims in Haiti, USD 100,000 cash and 20,000 tons of rice were donated by the Thai government, with some THB 40 millions more being raised by government-private sector joint initiatives. During the last weekend of 1/10, PM Abhisit was able to get away to attend the 40th WEF meeting in Davos, Switzerland. His presentation on food safety has certainly lifted Thailand’s image and role as one of the world’s five net food exporting countries. Elsewhere, Finance Minister Korn and Minister of Foreign Affairs Kasit represented Thailand in international forum, where world’s political and financial leaders continued to coordinate and collaborate to balance their exit strategies with the still-fragile global recovery.

Thaksin’s last battle

As expected, Thaksin & Co. continued their all-out multi-pronged fight to topple the Abhisit government and “Amataya,” before the verdict was passed (26/2/10) on his THB 76 billion frozen assets. Verbal ultimatum and threats of a country-wide violent uprising (to coincide with Thaksin’s invasion from Cambodia?!) were matched by unruly parliamentary debates, abusive protests and aggressive demonstrations by the red shirts against members of HM’s Privy Council, army chiefs, senior judges, cabinet members, government MPs and key yellow shirt leaders and supporters.

A M79 grenade was hurled into the army chief’s office. Bags of increment were thrown into PM Abhisit’s house compound. Day and night, the red shirts were announcing their fighting schedules and tactics, as well as their anti-government and anti-coup propaganda, on their TV and community radio network. Joining the media war to win the hearts and minds of the grassroots voters, the blue shirts have started to match the red Shirts with their own TV and community radio network! The people in Thailand did not lose their cool as they tried hard not to feel threatened or intimidated by the prospect of a “civil war”!

Let justice be done though heavens fall

With deteriorating law and order prevailing now in the country, HM the King has called upon the judges, at both the Criminal Court and the Administrative Court, to perform their duty with bravery and justice now and through out their lives. They should be guided at all times by “dharma” when making their legal deliberations and passing their judgments. In respond, the senior judges, who would be risking their lives to sit in judgment of the Thaksin case, have declined special state protection, notwithstanding the nerve wrecking intimidation and death threats coming from the red shirts. Of all the law enforcement institutions, the judiciary branch of the country has emerged as the country’s only hope for true justice in the hour of need.

Keeping our fingers crossed

Meanwhile the five banned coalition party bosses were quick to take advantage of the volatile political situation. They teamed up to call for an immediate amendment of Article 94 and 190 of the 2550 Constitution in the parliament (in order to make it easier for them to “win” votes in the next election and to free some of their party bosses from legal implications in the ‘08 MoU with Cambodia on land around the Phreah Vihear temple?). Mindful of the public negative sentiment on this issue, the Democrat Party took a gamble and voted against supporting their coalition partners’ amendment motion.

Although it was unlikely that the coalition parties would break up with the Democrats (and risk losing their grip on the mid year budget allocation?!), it could not be altogether ruled out that, under the right circumstances, a faction of Puea Thai MP’s could cross the line to vote with the coalition parties and join hands with them to form a “national government,” without the Democrats! PM Abhisit would have to make sure that he could dissolve the parliament and call for a snap election, before he was voted out as prime minister in the parliament. It would, of course, be another story altogether if a coup were to then materialize!

Coup? What coup?

In spite of the most trying circumstances, the Abhisit government and the military have managed to keep their cool. Every possible precaution, however, has been taken to beef up security measures against the red shirts’ possible attack on the Government House, town halls and important buildings. Personal safety of the PM, key cabinet members, military chiefs, government officials and judges were given priority as rumors of a coup were flying thick and fast. The red shirts intensified their daily protests (as rehearsal for their impending all-out battle?). Their targets were PM Abhisit, senior members of the Privy Council, the army chief and his would-be successor (in 9/10) who were accused of plotting a new coup to reinstate military dictatorship.

In a rare show of force and unity, military regimens all over the country flexed their muscles as they trooped up to pledge their allegiance to “king and country” and give moral support to their chief. Again and again, military brass came out to assure the public that there would be no coup. By now, most citizens have become quite confused and concerned about the threats of violence and disruption. Others, however, could only smile hopelessly and pathetically at the increasingly ridiculous situation the country has got itself into!

Out of the tunnel

In 12/09 the country’s economic recovery became more pronounced, led by stronger export, improved employment, healthier domestic consumption, higher revenues for farmers and tourist operators. Electricity consumption jumped 21%. Manufacturing production index shot up 35.7%. Industrial capacity utilization was running at 70%. Export went down 26% yoy to USD 14,528 million. Import down 33% yoy to USD 14, 650 million. Trade balance was USD 122 million in the red. Current account and balance of payments remained positive at USD 758 million and USD 2,500 million respectively. International reserves came down slightly to USD 138.4 billion.

Monthly inflation climbed 0.6% in 1/10, with food and beverage prices rising by 3.2% yoy and non-food up 4.7%. Core inflation rose 0.6%. For 2010, inflation was expected to surge 3% – 3.5% and interest rates were poised to increase during the second half of this year. To ease THB’s strength against the USD, the Bank of Thailand had announced a series of measures to ease outbound foreign investments (FDI and portfolio). Importers and exporters were allowed to freely hedge their forex exposures. The THB ended the month on a strong note at THB 33.17 to USD. In line with the Region, the SET fluctuated without clear direction to end the month at 696.

Better days ahead

According to the consensus, the Thai economy has indeed turned the corner and the country would be trending up this year. The IMF’s forecasted Thailand’s GDP to increase by 4.7% and export by 14% in 2010. In spite of the on-going Mabthaput environmental problems (expected to be solved within the next 6 months) and the continued drastic reduction of FDI worldwide, Thailand’s Board of Investment reported a healthy increase in BOI applications, totaling 1,573 projects worth THB 723 billion or 80% over targets in 08-09. So far, only two big projects have been withdrawn on account of Map Ta Phut.

With ample liquidity still in the market and a comparatively healthy financial sector, major Thai banks have started to jointly provide large project finance to MNCs for the expansion of their production plants in Thailand. Meanwhile, international rating agencies have begun to upgrade Thai banks, with the usual note of caution against negative political development. Everyone seemed to agree that local politics would be the only major draw-back to Thailand’s economic recovery and development this year.

* Vongthip Chumpani is an advisor to and former president of Bangkok Bank and a former advisor to the Senate Foreign Relations Committee. All views and opinions expressed herein are entirely from her own personal observations.

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