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New political regime leading Thailand down the road to “economic self-sufficiency”?

Updated On: Oct 06, 2006

The coup-makers who have now formed themselves into the advisory body of the new government –the Council for National Security (CNS) –are comfortably settling into their political role as General Surayud Chulanont becomes interim prime minister.

Gen. Surayud will lead his new cabinet of ministers to be sworn in before the King next Tuesday.

The CNS’ belief in its mission is so strong that it has defied the US call for a prompt end to martial law within the next ten days. This is despite Washington’s warning that more economic sanctions may follow the recent “US$24 million (902.8 million baht) cut in military aid after the coup”, the Bangkok Post reported.

Moreover, there is speculation whether the CNS and the interim government are opting to lead the kingdom down a path of insular economics and self-isolation reminiscent of the measures of post-1997 Asian financial crisis Thailand. An Asia Times editorial said that this “ sufficiency model also figures prominently in the preamble of the new interim charter” and emulate the “inward-looking ideals of His Majesty King Bhumibol Adulyadej's self-sufficiency economic philosophy”.

The editorial also observes that “Thailand's economic performance has transcended its political woes, growing 6.1% and 4.6% in the first and second quarters respectively…[perhaps because] the Thai economy has never in its history been more externally oriented, where exports contribute more than 63% of total GDP. In August, exports and tourism were up respectively 17% and 13% year on year, resulting in a $813 million current-account surplus, the highest so far this year”. It cautions that Thailand's new government may take a step too far in honouring the King by adopting his economic philosophy, thus causing a greater slowdown in an economy which is touted to deteriorate given the barrage of political shocks.

While the cabinet is being formed, Thaksin’s likelihood of making a comeback into Thai politics looked bleak as he stepped down as the leader of the Thai Rak Thai party, causing a mass exodus of members.  Meanwhile, four factions of the disintegrating Thai Rak Thai party plan to set up a new political party and invite former deputy prime minister Somkid Jatusripitak to head it”. The Chart Thai party has also indicated that members of the TRT will be welcome to defect to its side.

As to the Shin Corp-Temasek furore, the Supreme Administrative Court has accepted a private suit by Satra Tohon, a law lecturer at Rangsit University, to examine the sale of Shin Corp to Temasek Holdings. Nonetheless, Temasek Holdings remains adamant about its acquisition. It’ senior managing director for investment, Jimmy Phoon, told the IHT, “Shin Corp. continues to be a good investment not withstanding [the] changes that have happened… We believe that it will grow in value in time. We will continue to explore opportunities in this market.”

Sources:

Court agrees to hear Shin Corp case (Bangkok Post, 5 October 2006)

New cabinet 'by next Tuesday' (Bangkok Post, 5 October 2006)

Four TRT factions plan new party (Bangkok Post, 5 October 2006)

Military has no plans to lift martial law (Bangkok Post, 5 October 2006)

Temasek will hold on to bruised Shin (IHT, 1 October 2006)

In Thailand, a return to 'sufficiency' (Asia Times online, 5 October 2006)