Thai finance minister quits, raising fears of rifts in govt

The Straits Times, March 1, 2007
By Nirmal Ghosh, THAILAND CORRESPONDENT


BANGKOK - THAILAND's Finance Minister Pridiyathorn Devakula resigned abruptly yesterday, putting more pressure on a government suffering credibility problems with investors and raising questions about splits in the country's leadership.

Mr Pridiyathorn, who also holds the position of deputy prime minister, said he was stepping down from both positions with effect from today.

His departure follows a series of policy blunders and comes barely a week after Dr Somkid Jatusripitak announced his resignation as head of a government economics panel.

At a press conference yesterday, Mr Pridiyathorn cited policy differences with Prime Minister Surayud Chulanont and took a swipe at unnamed ministers and the media for his decision to throw in the towel.

'I don't want to work under the influence of some people whose behaviour is not entirely transparent, especially some ministers,' he said, without naming names.

'People with links to the previous government still hold political office. I don't want to work under circumstances in which there are hidden agendas and influences.'

'My decision is also based on the fact that they (the ministers) are working for the benefit of certain media,' he added.

Mr Pridiyathorn, a former central bank governor, was chosen to head Thailand's economics team by the generals who ousted prime minister Thaksin Shinawatra last September.

The Wharton Schooltrained economist started in his job with widespread respect for his independence and integrity, but soon found himself under fire for a series of policy missteps.

First came the decision in December to impose capital controls that rattled the stock market. Then, plans to amend the Foreign Business Act to curb the use of nominee companies drew criticism from foreign chambers of commerce here for lack of clarity and consultation.

Mr Pridiyathorn yesterday did not conceal his unhappiness over the appointment last month of Dr Somkid - an architect of Mr Thaksin's economic policies - as an advocate for the current government's 'sufficiency economy' agenda.

'Hiring individuals from the previous government... is a weak excuse,' Mr Pridiyathorn told reporters in an obvious reference to Gen Surayud's decision to appoint Dr Somkid.

Former Bank of Thailand governor Chatumongkol Sonakul is being tipped as a replacement for Mr Pridiyathorn.

Meanwhile observers such as Mr Kiat Sittheeamorn, a top economic official with the Democrat Party, see the resignation as a sign of a growing divide within the government.

A Bangkok-based investment banker told The Straits Times: 'No one was very fond of (Pridiyathorn) so nobody is overly upset. But it was poorly managed. He was part of this government's core group, and the fact that he had differences with the prime minister is not a good sign.'

Look ahead, Mr Santi Vilassakdanont, chairman of the Federation of Thai Industries, said: 'This raises many questions, mainly about the stability of the government... what possible policy changes could be in store.'