Bangkok taps ex-Thaksin aide to boost investor confidence

The Straits Times, February 16, 2007

By Leslie Lopez


Former PM's deputy will help explain new govt's economic policies

THAILAND'S embattled military-installed government has appointed a former deputy to ousted Prime Minister Thaksin Shinawatra to help arrest faltering investor confidence.

In a surprise move yesterday, Prime Minister Surayud Chulanont announced that Dr Somkid Jatusripitak will head a special committee that will play a central role in explaining the new government's economic policies that have come under attack from the local and foreign business communities.

Dr Somkid, 53, was Mr Thaksin's most trusted economic adviser and gained a reputation for being a capable administrator during his time as commerce and finance minister.

Referring to Dr Somkid's appointment, General Surayud told reporters yesterday: 'Having someone from the previous government who also has contacts in the economic world, especially in Japan and China, will help create confidence that 'sufficiency economy' does not conflict with capitalism.'

Sufficiency economy refers to the new government's economic model that emphasises improvements in the quality of life and avoids the excesses of investments and spending.

But the policy has raised concerns about the government's approach to business and its credibility has taken several knocks with controversial policies such as the imposition of capital controls in December and last month's confusing amendments to laws that govern foreign corporate ownership.

Some financial executives see Dr Somkid's appointment as a damage control measure. 'Nothing is working. Somkid's comeback shows that the government is desperate and it is forced to reach out to people who can get things done, no matter what their past links,' said a foreign Bangkok-based banker who declined to be named.

But most political analysts and financial executives are positive about the choice.

'He is the most qualified person to argue Thailand's economic case with foreign investors. Somkid is highly-respected and has a lot of credibility,' says Mr Kitti Nathisuwan, head of research for Macquarie Securities in Bangkok.

Dr Somkid was one of the founder members of the TRT party and was at one time tipped to succeed Mr Thaksin.

But, some TRT officials say, ties between the two men soured early last year, prompting Dr Somkid to quit the party a month before the Sept. 19 coup.

Many analysts say that he was tapped by the military as Thailand's new economic face partly because of his image as Mr Clean.

Still, pushing the economic agenda of the coup leaders could prove a serious challenge for Dr Somkid, a key architect of the previous government's free-market economics and populist spending policies.

'His appointment is so contradictory. The military is turning to a guy who spearheaded the fast growth policies under Thaksin. Now they are asking him to explain self-sufficiency which is completely the opposite,' said Thitinan Pongsudhirak, a professor of political science at the Chulalongkorn University in Bangkok.

Several long-time Thailand political watchers like Prof Thitinan also believe that Dr Somkid is expected to emerge as a serious player when new elections are held sometime later this year.

His appointment as economic adviser is part of a plan by the coup leaders to continue to have a hold when Thailand returns to democratic rule, they say.

'This is clearly political manoeuvring on the part of the military. You could say they are buying some insurance,' said Prof Thitinan.