The Vongthip Letter May 08
It’s time again for some stimuli of those brain cells.
Here’s Khun Vongthip Chumpani of Bangkok Bank with her monthly mandatory doses of Thai insights.
Read about “saint” Thaksin, the rice crisis and understand Thailand’s current behind-the-scenes.
By Vongthip Chumpani*
A long hot summer: For PM Samak, April was quite a stressful month. He made a quick trip to Malaysia to discuss border security issues in the Deep South, celebrated the 50th anniversary of Thai-Korean and the 175th anniversary of Thai-American relationship. He blasted the UN/IMF and WB for criticizing Thailand for switching food crops to energy crops and creating the recent global rice shortage. He warmly welcomed and cooked dinner for visiting Burmese PM, Gen. Thein Sein.
He moved TRT/PPP men into key government posts, sacking Police Chief Gen Seripisut to pave the way for Khunying Pojaman’s brother, to take over the powerful post in 9/08. He moved 16 provincial governors and Ministry of Foreign Affairs’ chief international legal negotiator. He appointed Thaksin’s military classmates to the boards of key government enterprises. Against all odds, he personally reinstalled Minister of Interior, Chalerm Yoobamroong’s eldest son (accused and tried for shoot-out murder in a pub) as an army lieutenant.
Speak no evil
This year, World Freedom Press Day was remembered differently in Thailand. Three media associations announced their shocking findings on the current state of press freedom. The study concluded that PM Samak “failed to respect the duty of the media to monitor the government’s performance and report to the public.”
He was strongly chided for using every trick of the trade to “evade, lie and stonewall rather than provide facts and give an accurate picture of what is going on in the country on a day-to-day basis”. He was found to be “rude, impolite and using abusive language to ridicule, mock and belittle the journalists.” PM Samak retaliated by deciding to scrap his weekly press briefing sessions and stay away from journalists – at least for the time being.
Our dear ministers
In 4/08 the National Counter Corruption Commission declared both Health Minister Chaiya Sasomsap and Deputy Minister of Commerce Viroon Tejapaibul guilty of failing to report their family shareholdings in excess of 5%. Minister of Social Development and Human Security Sutha Jansaeng was found to have submitted an unqualified bachelor degree and failed to report on the assets of his out-of-wedlock daughter.
The Opposition Party has finally filed their case to impeach Minister of the PM Office Jakrapob Penkair for mishandling and power abuse in the NBT-TV Channel 11, community Cable TV and radio contracts. Meanwhile, the internal power struggles among PPP’s various factions were becoming more ferocious. Their disagreement have intensified to the extent that their supreme leader had to fly back and forth to act as referee and provide the losers with appropriate “compensations.”
The “saint” came marching in
While professing his wish to stay away from politics and spend the rest of his life doing good deeds for Thailand and Man City Club, Thaksin has failed so far to convince his opponents that he has not been orchestrating and funding the TRT/PPP’s “dual-tracks strategy” to return him to power.
Intelligent voters were skeptical of his high-profiled whirl-wind trip to make merit at 99 temples in the North and the Northeast; his promise to use “his still-to-be-unfrozen THB 73 billion” to co-invest with his global tycoon buddies in mega projects that would greatly benefit Thailand; his public plea to ardent fans to refrain from using his name in their questionable activities; his lame excuses for the unlawful use of the Thai flag at Man City matches. No wonder, Thaksin’s opponents were tickled with delight to read about Man City fans turning nasty against “Shinatra” when they knew of his plan to sack their beloved coach, Sven Ericsson, at the end of the season.
The Master Plan
With the looming possibility of party dissolution, the PPP Coalition Government has decided to railroad the 2550 Constitution amendment in the parliament. So far, 311 MP’s have signed up to submit the charter amendment bill, as per PPP’s own version of the 2540 Constitution. Finally, the legally entangled House Speaker, Yongyuth Tiyapairat, was “ordered” to resign, paving way for PPP’s new nominee, Chai Chidchob, to chair the House and supervise the charter amendment process.
According to political analysts, once Articles 237 (to liberate the 111 banned TRT executives) and 309 (to free Thaksin from all the court cases) were successfully scrapped, PM Samak was expected to dissolve the House and call for a snap election. The TRT/PPP, under the leadership of Thaksin, could then return to rule the country with an even larger majority and popularity that would ensure long term stability under Thaksin’s (illiberal) democratic rule. Compared to former PM Surayud’s “lame duck” government and the current PM Samak’s “ugly duckling” regime, Thaksin’s second administration would surely turn out to be the long-awaited “magic swan” government for the pro-Thaksinists.
The cry for wisdom
Through out PM Samak’s 100 days of administration, there has been a constant flow of “distractions for distraction by distraction”. Like never before, skeptical voters, stubborn watchdogs, responsible journalists joined the Opposition Party to closely monitor TRT/PPP’s clever manoeuvres. The often confused public has become increasingly more disturbed by weird comments, bizarre events, vulgar attacks and even obscene exhibition that were happening in the government, the parliament, the streets and the cinemas! Then out of the blue, PM Samak claimed that another military coup was in the making!
To put things in their proper perspectives, the country’s respected elders, academics, businessmen and military brass have had to come out to warn the Administration that their ruthless actions and rash attempts to rewrite the charter and to railroad their way over issues that were sacred and sensitive to the Thai people, have taken Thailand back to the pre 19/9 Coup situation. Everyone agreed that, this time around, there would certainly be bloodshed and severe political and economic disruptions that Thailand could no longer afford.
Poor man’s blues
While nervous global investors were moving their huge funds out of the greenback into safer assets worldwide, there occurred a structural upward adjustment of prices of commodities, raw materials and food which have been globally denominated in USD for decades. Alas, in Thailand, rice farmers’ elation over the price hike was indeed short-lived. By end of 4/08, paddy prices have plunged back to THB 6,000/tonne from THB 13,000/tonne. Many blamed Minister of Commerce Mingkwan for his abrupt policy changes including the unloading of 2 million tons of cheap rice from government’s stockpile for retail sales in 5/08.
Meanwhile export and retail prices of white rice have continued to soar. Overnight, sugar price was allowed to move up 30%. Government measures, launched to ease the burden of spiral food costs, were half-baked and unfairly distributed. Workers were shocked and dismayed by the selective minimum wage increases (ranging from THB 2 to THB 11) that seemed to favor PPP’s political provincial strongholds.
Still resilient
In 4/08, headline inflation moved up to 6.2%. Contrary to expectation, the Bank of Thailand did not increase their policy interest rate of 3.25%. With the USD somewhat firmer now, the THB has stabilized at around THB 31. The SET also seemed to be enjoying a small bull run (over 850) as local and foreign investors shifted their funds into equity market.
Corporate performance and profit have benefited from Government’s free spending in the last few months. Exports continued to show healthy growth (13.5% -16.5% in 08) and there was USD 160 million trade surplus in 3/08. However, the GDP growth rate of 4.8%-6% for 08 might have to be adjusted if oil prices were to move from USD 120 to USD 150 range much sooner than expected.
Lest we forget
While the people were trying to make sense of what was going on politically and economically at home, they were shocked by the worst ever tropical cyclone in Burma. At 190 miles an hour, Cyclone Nargis hit and devastated Rangoon and the Irrawady Delta, killing tens of thousand and displacing some one million poor Burmese.
Meteorologists warned that natural disasters of this scale would be hitting the Andaman Coast of Thailand sooner or later. Both the government and the private sector could no longer ignore the situation. With such massive catastrophe lurking just around the corner, we have to come up with a comprehensive contingency plan at all levels.
* 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.