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Thailand must overcome obsession with Thaksin

by William Pesek

Bloomberg

“Welcome to the Republic of Thaksin.” You won’t see these words displayed in the customs hall when arriving in Thailand, but the Land of Smiles has indeed morphed into the land of Thaksin Shinawatra.

That should be giving Southeast Asia’s second-biggest economy plenty to frown about. Seven years after the former prime minister was ousted in a coup, Thaksin’s long shadow continues to dominate Thai politics. Since then, the country has seen six prime ministers, the most recent one being Thaksin’s baby sister, Yingluck Shinawatra.

Like many loving siblings, Yingluck looks out for her kin. Recently she tried to ram a get-out-of-jail-free card for Thaksin and other politicians through the parliament — as big a political blunder as Asia has seen in years. Markets plunged and more than 32,000 people joined demonstrations in the capital and 17 other provinces. This week, Yingluck backed down and agreed to scrap the bill for now.

But anyone who thinks that’s the end of Thailand’s Thaksin nightmare is wrong. The proud and acerbic billionaire, Asia’s answer to Italy’s Silvio Berlusconi, isn’t about to shelve his obsession with returning home, reclaiming the portion of his telecommunications fortune frozen by the state and succeeding his sister. Many fear Yingluck is little more than a placeholder for big bro.

With his ambitions thwarted for now, the focus has turned to how much money this setback will cost Thaksin. Thais should be worrying instead about how much this political circus is hurting their $366 billion economy.

Every day that politicians and policy makers in Bangkok spend obsessing over Thaksin’s return is one that’s not being used to modernize the economy, increase competitiveness and avoid the “middle-income trap” that befalls many developing nations and may soon ensnare Thailand.

The politics of personality aren’t confined to Thailand. Asia is awash with larger-than-life populists bigger on charisma and spin than concrete reforms: leaders like Shinzo Abe in Japan, Xi Jinping in China and, in some ways, Benigno Aquino in the Philippines.

The same problem afflicts several figures who have yet to take the helm, including India’s Rahul Gandhi. All have neglected tough policy work in hopes that a strong personality will be enough to carry them through and bolster their approval ratings.

But Thaksin raised the strategy to an art form, essentially making an entire nation about him. His tenure from February 2001 to September 2006 saw nothing less than the wholesale bastardization of Thai democracy. He neutered its institutions and enriched his family members and cronies in ways that would have made a Russian oligarch blush.

Like former Italian Prime Minister Berlusconi, Thaksin was a powerful tycoon who leveraged his business success to become leader. Thaksin, like Berlusconi, was later accused of bending the government to his will and in alignment with his business interests.

He got away with it by literally bribing the rural communities that formed his power base. His “Thaksinomics” program of flooding the hinterlands with cheap loans was never more than Tammany Hall-like doling out of cash for support. The money did nothing to improve the economy’s fundamentals or capacity for innovation.

It’s a strategy Yingluck copied early and often after becoming prime minister in 2011. Take her disastrous rice-subsidy plan, which by the latest estimate has cost $19 billion since October 2011 and over time has recorded losses equivalent to 59 percent of that figure.

Thailand is now sitting on two years of export production, which has distorted rice markets in the Mekong River region and cost Thailand the title of world’s biggest rice exporter. What’s depressing is that in that time Thailand could have, say, built a new state-of-the-art airport. Instead Suvarnabhumi Airport, opened the same month in 2006 in which Thaksin was ousted, continues to struggle with capacity constraints that are impeding the all-important tourism market.

Why champion such a debacle? The rice program is sure to pay huge dividends for Yingluck, and by extension Thaksin, come early 2014 when her government may call a snap poll. The hope would be for Yingluck’s party to demonstrate enough of a mandate to resurrect the amnesty bill. To do that, they will need the farmers. Hence the linear focus on boosting rice prices.

It’s frustrating to think where Thailand might be today had the nation not squandered the last seven years on all things Thaksin. By overreaching so spectacularly with the amnesty bill, Yingluck displayed a level of cluelessness that will further hobble her ability to govern.

The bill might have gotten further if it had also applied to people charged with lese-majeste, which mandates prison sentences as long as 15 years for defaming or insulting the king, queen, heir apparent or regent.

Instead the bill would have allowed Yingluck’s brother, army officers and former Prime Minister Abhisit Vejjajiva, who faces murder charges for authorizing soldiers to use weapons during unrest in 2010, to walk free — not average Thais. It left the pro-Thaksin Red Shirts and opponents known as the Yellow Shirts wondering who, or what, they had been fighting for.

It’s time that the Republic of Thaksin became less about one man and more about the aspirations and needs of Thais.

William Pesek is a Bloomberg View columnist based in Tokyo.

  • Dipak Bose

    Don’t give loans to the farmers but built another airport to bring more sex-tourists.
    What a great economist from he Bloomberg!!!

  • Concerned

    This article is totally true!
    4days ago, The Senates has passed The Gov policy for
    borrowing B2,000,000,000,000 to build sky train
    Guess what time they approved this ?
    2.47am!
    seriously?
    this sort of important thing was taken place while people are sleeping !
    The Gov is seriously crazy!

    Thaksin owns a lot of company
    including transportation, communication, food and may other main ones
    (a friend of mine’s parents own an import company
    this makes them not able to show that they’re against Thaksin
    because their business would be shut)

    Thaksin gives lot of money to poor people
    so these people totally loves him

    Now people who support Thaksin are gathering at Rachamangkala
    (the biggest foolball stadium)
    can u imagine how much money to pay for the stadium’s rent?
    how could these people afford if the Gov is not helping?

    Anti-Thaksin people are now at the democracy monument
    (see the different ?)
    Doctors, nurses, university students, middle class and poor people
    students in high school, or even some police have already stated their point
    to show that they’re unpleasant with the Gov

    Is sky train that necessary for our country now?
    When we can’t even manage to sell rice we’ve grown
    can’t even make people speaking english and learn to survive in
    the coming ASEAN community
    can’t even make rubber price stable
    the Gov is proposing to build sky train and cause more GDP !

    Thaksin’s mob
    keep saying that This Gov is from the Majority
    because 15million people voted for his party
    (leading by his sister who’s never been a politician at all
    but then luckily get to be a PM)

    But seriously
    at that time, in the election
    there’re several parties to vote
    most people don’t choose Thaksin
    more than half of the votes
    went to several parties that the country love.
    it’s just that when the vote went to different parties
    then it’s not strong enough for any specific parties to be Gov
    15million people(for sure some were paid)
    happened to chose his party
    so the vote was strong for them to set the GOV

    that’s why.

    You know what
    The PM(Yingluck- Thaksin’s sister)’s first policy
    was to buy tablets for 7y’o students
    so that they have better education(duh)
    it’s been 2 years since they bought them
    and now those sucking tablets are just waste of huge amount of money
    no one can really use it, it’s not even practical all along!
    such a waste of people’s money

    our PM can’t really speak by herself
    she needs to read from the script
    i can count by one hand for how many times she speak by herself
    she can’t even speak English
    she’s just a random woman who was put to act as a PM

    she rarely comes to The Gov’s meeting
    like not ove 20 times since she is the PM i think
    but her name was always checked as present at the meeting

    she went to many countries since she is PM
    she is probably
    the leader who travels a lot ..ranked world’s second
    (AFTER OBAMA)
    are we that rich? is it that necessary for Thai PM to travel around the world ?

    today, 24 November, people who anti Thaksin from aound the country
    over a million gather at the democracy monument
    the rest that can’t go gather at the city halls of each city

    unfortunately, some freak have thrown sharp nails alone the way
    from other cities to the capital cities
    so that people can’t go to the monument

    and there’re police stops
    today every temporary police stops asked people where they’re going

    if there’re going to the football stadium(thaksin’s mob)
    then they’d let them pass

    but if they’re going to the monument, police wont let them pass

    what kind of GOV do this..
    what if big vans and cars crashed because of the nails ?
    people would die a lot.
    more than 100cars suffer and had to stop because their tires leaked

    please, Shinawatara family
    please leave Thailand alone
    even if u’re outside of the country
    u still have many companies here
    still earns a lot from us

    what else do u want ?
    just leave. u have more than enought