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Thai business leaders wary of Thaksin return

A Thai man while holds his daughter as he drops his ballot paper into a box at a polling station in Thailand's Muslim-dominated southern Narathiwat Province yesterday. PHOTO: AFP

Ousted Thai prime minister Thaksin Shinawatra's homecoming has left business leaders wary as the self-made billionaire casts a long shadow over the new government's economic policies.

Thaksin, a hero for the poor whose populist "Thaksinomics" measures aimed at developing the countryside, made a triumphant return on Thursday, ending 17 months of self-imposed exile since his ouster by the military.

Although Thaksin repeated his vow to quit politics in a nationally televised news conference, doubts over his pledge soon emerged when the finance minister said he wanted the business savvy ex-prime minister to be his advisor.

Finance Minister Surapong Suebwonglee said Thaksin's entrepreneurial knowledge could help Thailand's economy, which has languished for the past two years due to political turmoil and the ensuing military rule.

But business leaders voiced worries that Thaksin's involvement could do more harm than good for the second largest economy in Southeast Asia.

"Thaksin knows how to improve the economy. In that sense, it's a good thing to have him as a policy advisor," said Kietphong Noichaiboon, vice chairman of the Federation of Thai Industries, the kingdom's biggest business group.

"I hope the government can control anti-Thaksin forces, but everybody is worried about the political situation."

Vallop Tiasiri, president Thai Automotive Institute

"But Thaksin has many opponents. That's why we are worried about its political impact" on the economy, Kietphong said.

The 58-year-old tycoon-turned-politician built his political success on support from the nation's poor, but his autocratic style was despised by Bangkok's middle class who led anti-Thaksin protests leading to the coup.

While most of Thaksin's tenure was marked by strong economic growth, political uncertainty before and after the September 2006 coup kept away foreign investors and pushed the economy into the doldrums.

Pornsilp Patcharintanakul, deputy secretary-general of the Board of Trade, a major business group, warned that even the perception that Thaksin had a hand in running the government could again spark street demonstrations and derail economic growth.

"I am already worried about a potential political crisis. Both his supporters and opponents want to exploit Thaksin's return for political purposes," Pornsilp said.

"If I were a foreign investor, I would wait and see instead of making new investments. The political situation is not getting better, and this is very negative for our economy," he said.

Lifting the flagging economy is one of the top priorities for the government of Prime Minister Samak Sundaravej, an ally of Thaksin, who took office early last month.

Surapong, also one of Thaksin's most trusted aides, has said he would follow in the footsteps of the deposed prime minister, who boosted Thailand's rural economy through debt relief, investment funds and cheap medical care.

The finance minister also said he would kick start multi-billion-dollar public works projects, which were launched by Thaksin but put on hold after the coup. He has vowed to bring at least 5 percent economic growth.

The Samak government has already started reversing some of the policies of the previous military regime, which spooked foreign investors with strict currency rules, proposals to curb foreign investment and a generic drug scheme overriding patents.

On Friday, the Bank of Thailand announced it would lift the currency controls, one of the most controversial measures imposed by the military government in a bid to halt the Thai baht's rise against the dollar.

For Vallop Tiasiri, president of the Thai Automotive Institute, the sharp shift came as no surprise.

"Although Thaksin is not directly involved in this government, he is still a very influential figure in Thai politics," said Vallop, whose state-funded agency promotes the auto industry.

"I hope the government can control anti-Thaksin forces, but everybody is worried about the political situation," he said.

Kietphong agreed that while Thaksin had the right to return, he may spell political trouble.

"In the last two years, our economy suffered due to political problems. We cannot suffer again," Kietphong said.

Also See: The return of Thaksin could send Thailand back to the past
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