Asia News

Court ruling could worsen economic downturn

Gunboy — Wed, 03 Dec 2008 15:05:05 +0000

Court ruling could worsen economic downturn

CHATRUDEE THEPARAT AND WICHIT CHANTANUSORNSIRI

The political vacuum created by the Constitutional Court ruling yesterday could result in further damage to Thailand’s ailing economy as key stimulus programmes and measures are delayed pending the formation of a new government.

Economic growth is already slowing fast, as the closure of Suvarnabhumi Airport has disrupted supply chains and crippled the key tourism industry in its peak season. The slowing global economy has also undermined exports and ravaged investor and business confidence, prompting some economists to warn of zero growth for 2009.

Key policies now requiring new political leadership include the 100-billion-baht supplementary budget, the infrastructure megaprojects and proposed assistance measures for the tourism sector.

Government spokeswoman Suparat Nakboonnum said that even a 1.5-billion-baht budget request to help stranded foreign tourists was delayed as cabinet ministers yesterday were forced to halt their meeting after the court read its verdict.

Other measures to help the tourist industry would also be held up until a new government is formed, she said.

The Tourism and Sports Ministry had earlier proposed offering foreign tourists 2,000 baht per person per day to offset lodging expenses while they waited for flights out of the country.

Hotels have now been asked to bear the costs and bill the new government later once the assistance budget is approved.

The ministry’s plans to set aside 10 billion baht to help small- and medium-sized tourist operators, tour agents, hotels and other businesses affected by the airport crisis will also be shelved due to the political vacuum.

Kanit Sangsubhan, the director of the Fiscal Policy Office’s Policy Research Institute, said caretaker ministers would be unable to implement new policies, meaning any tourism rehabilitation programmes would be delayed.

Other economic stimulus plans would also have to be postponed, including measures approved in September to help buffer the impact of the global recession on the local economy. These include construction contracts for two new mass transit routes in Bangkok and the 100-billion-baht supplementary budget.

Dr Kanit said a new prime minister may be named as early as Monday once the Parliament meets, although there was little guarantee that ongoing political tensions would ease.

Ekniti Nitihanprapat, an economist and Finance Ministry spokesman, said the continuing global economic crisis made this a poor time for policymaking to grind to a halt. “The global economic crisis is changing rapidly each day. We need to solve our domestic problems as quickly as possible, as we simply have no control over the external economic environment,” he said.

Policies to accelerate spending of budgets and state enterprise investment are also likely to be delayed pending the appointment of new ministers.

Direk Patmasiriwat, an economist at Thammasat University, said the new government should consider new fiscal measures including “workfare” programmes between the government and local administrations to hire workers for public projects.

Hiring 200,000 people at wages of 350 baht per day for 250 days would cost 17.5 billion baht, with the costs split between the central government and local authorities.

Dr Direk said long-term savings programmes and public bond issues should also be implemented to help mobilise funds and spur community investment.

In any case, private travel operators still grappling with the ongoing airport crisis could only shake their heads in frustration over the latest political developments.

Maiyarat Pheerayakoses, the president of the Association of Domestic Travel, shrugged when asked about the potential delay in assistance measures from the government.”It won’t really matter - the tourism industry has already collapsed,” she said.

“The best solution for the industry is if PAD can immediately vacate the Suvarnabhumi and Don Mueang airports.”

Estimated losses for the industry have already been placed at well over 150 billion baht, based on cancellations, lost business and other losses suffered due to the one-week closure of the airports.

Anake Srishevachart, the president of the Thai-Japan Tourism Association, said it would be at least six months before the sector could even begin to recover, making it imperative that policymakers implement assistance measures as soon as possible.

Bangkok Post
Wednesday December 03, 2008

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Dissolved parties will reform as new entities / Coalition partners vow they will stick together

Gunboy — Wed, 03 Dec 2008 15:00:55 +0000

Dissolved parties will reform as new entities / Coalition partners vow they will stick together

POST REPORTERS

The People Power, Chart Thai and Matchimathipataya parties are to be reborn under different names as they reel from the political blow of being dissolved by the Constitution Court.

Chart Thai leader Banharn Silpa-archa is crestfallen after delivering a closing statement to the Constitution Court, which disbanded his 34-yearold party. APICHIT JINAKUL

Chart Thai leader Banharn Silpa-archa said his party would “regenerate” under a new name and would not merge with any party.

Chart Thai deputy leader Somsak Prissananantakul yesterday admitted a replacement party will be up and running soon. The new name is being mulled over, possibly Chart Thai Pattana.

Mr Somsak said Chumpol Silpa-archa, a former senator and Mr Banharn’s younger brother, may be invited to lead the new party. However, it is too early to decide, Mr Somsak said.

The Constitution Court yesterday disbanded the 34-year-old Chart Thai, the country’s second oldest political party, the Matchimathipataya party and the ruling People Power party (PPP).

Executives of the parties were stripped of their political rights for five years.

Mr Banharn said the dissolution would not be the end of Chart Thai as people still had faith in his party.

He denied it would merge with Puea Thai, a back-up party of the PPP.

Nikorn Chamnong, another deputy leader of Chart Thai, said the party had tried its best to fight the charges and its MPs will move to a new party.

He was confident all 15 Chart Thai MPs would not defect to other parties.

Chart Thai secretary-general Prapat Pothasuthon said he was stunned by the court’s ruling. The party would meet over its fate soon.

Three Silpa-archas - Mr Banharn, his daughter Kanchana and son Warawut - face a five-year political ban. Suphan Buri is the family’s stronghold.

Mr Warawut was named deputy transport minister only two months ago.

Mr Warawut vowed to return to politics after the political ban expires. He noted the court may have rushed to wrap up the trial and did not give the accused enough time to defend themselves.

A source said Mr Banharn was very sad his party was dissolved. He would likely approach his younger brother Mr Chumpol to lead the new party.

Many PPP MPs, meanwhile, plan to move to Puea Thai.

Natthawut Saikua, the former government spokesman, reiterated that all six coalition parties would stick together and form a new government.

Matchimathipataya leader Anongwan Thepsuthin said the 11 party MPs would meet to discuss their future. She admitted the party had already set up a reserve party - Phumchai Thai (Thai Pride).

Ms Anongwan, wife of Somsak Thepsuthin who is among the 111 executives of the dissolved Thai Rak Thai banned from politics for five years as well, said the court was rather quick to pass the verdict.

“The verdict came out shortly after I read out my closing statement. Does this mean the court did not care about what the party had to say? What is going on with the judicial system?” Mrs Anongwan, the natural resources and environment minister until yesterday, said.

She said questionable standards in the judicial system were a prime cause of the country’s political strife.

The party leader, who is now out of politics for five years, admitted the Constitution Court’s ruling to dissolve her party was beyond her expectation.

She said reliable sources had told her the party would survive the dissolution.

Pornthiwa Nakasai, a Matchimathipataya MP, confirmed the coalition parties would be united behind the PPP.

Bangkok Post
Wednesday December 03, 2008

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Conflict leaves nation’s reputation abroad in tatters

Gunboy — Wed, 03 Dec 2008 14:56:08 +0000

Conflict leaves nation’s reputation abroad in tatters

PAVIN CHACHAVALPONGPUN

The political face-off between the People’s Alliance for Democracy (PAD) and the Somchai Wongsawat government has not only seriously caused great political instability, but also tremendously damaged the country’s international standing and reputation.

The statue of a mystical creature known as Kinnaree stands at Suvarnabhumi Airport, its eyes blindfolded with a PAD headband.

The political crisis is no longer limited within the domestic realm. It has far-reaching implications on Thailand’s foreign affairs.

As of Tuesday morning, a Thai court dissolved the ruling party and banned PM Somchai Wongsawat from politics, plunging the kingdom into further uncertainty. Although the PAD responded to the verdict by suspending their protest until further notice, the damage to the country has been done.

The loss of revenue from tourism is enormous, indeed as much as that of Thailand’s image as one of the ultimate tourist destinations in the world. More than 350,000 passengers have reportedly remained stranded in Thailand since the closing of the airports. Countless foreign tourists voiced their disappointment in the way the PAD has held the country hostage and the government’s inability to solve the crisis.

Some US Congressmen have warned that Thailand is slipping into becoming a failed state. A failed state is defined as a state whose central government is so weak or ineffective that it has little practical control over much of its territory. Max Weber once said that a state could be said to succeed if it maintains a monopoly on the legitimate use of physical force within its borders. When this is broken, such as through the domination of warlords and terrorists, the very existence of the state becomes dubious; and the state could become a failure.

Within Asean, at least three members - Vietnam, Laos and Cambodia - suggested that Thailand give up its chairmanship this year due to its escalating political violence. Thailand is thus being put on a par with Burma, whose government was forced to relinquish its chairmanship in 2005 because of its legitimacy crisis.

Unable to cope with the increasing violence, the Thai government has decided to postpone the Asean summit to March 2009.

Cambodia quickly tied Thailand’s political crisis with its military aggression over the territorial disputes near the Preah Vihear temple. Prime Minister Hun Sen even lectured Thailand on how to solve its troubles in a democratic way.

With Thailand sinking into deep turmoil, many doubt if it could exercise leadership in Asean, particularly at this juncture of the launching of the Asean Charter.

Meanwhile, Thailand, once a vital player that helped promote democratisation in Burma, has found itself lacking in moral authority to preach to its neighbouring military state. The PAD, despite its name bearing the term “democracy”, has initiated the idea of “New Politics” whereby future parliaments would consist of 70% appointed members and 30% elected. The new political paradigm is scarily analogous to the future political structure of Burma, where a portion of parliamentary seats is reserved for the military.

As the political division is getting wider, compromise is becoming a rare commodity. Can Thailand, experiencing this difficulty all by itself, have any legitimacy to urge the Burmese junta to search for political reconciliation with its opposition and ethnic minorities?

The PAD, however, is not the only player that has tainted the country’s international credibility. Former prime minister Thaksin Shinawatra, now a fugitive, has been strident in further inflaming the political situation in Thailand on the global stage.

In his interview with an American journalist in Dubai last week, he warned that a military coup would lead to inevitable bloodshed.

He let the world know that Thailand has plunged deeply into an anarchic state, with the rule of law being bluntly rejected by the opposition.

Although it may be true, the fact that Thaksin is painting a gloomy picture of the current political situation so as to serve the little legitimacy he has left, has further put Thailand in the international limelight. In June 2006, Thaksin, while still in power, sent a personal letter to US President George W Bush, lamenting the democratic situation in his home country.

“Having failed to provoke violence and disorder,” Thaksin said, “my opponents are now attempting various extra-constitutional tactics to co-opt the will of the people.”

The political conflict at home has also made the work of Thailand’s diplomatic missions aboard more difficult. The profound political division is clearly evident inside the Foreign Ministry.

One ambassador is said to have recently challenged the headquarters’ instruction on how to explain to foreigners in a way that would play down the fatal incident of Oct 7, in which the police used excessive force against protesters.

The ambassador emphasised that it did not matter where his political stance was. What really mattered was the fact that diplomats, like other professions, must have integrity and ethical professionalism.

The prolonged political bickering has effectively hampered the country’s active foreign policy. Thaksin’s foreign policy initiatives have been much criticised for being unsustainable. It has already been an uphill task for Thai diplomats to continue Thaksin’s past policies.

Now, with the country falling further into turmoil, the Foreign Ministry is preoccupied with having to explain to the outside world about the domestic situation, as well as protecting the country’s image, which has seemed to be a mission impossible.

A good image and a solid reputation take years to blossom. Sadly, it has been snatched away in the blink of an eye. The notion of Thailand as the “Land of Smiles” is becoming obsolete. It is fast turning itself into a land of misery and strife.

The writer is a Visiting Research Fellow at the Institute of Southeast Asian Studies.

Bangkok Post
Wednesday December 03, 2008

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Dissolved parties will reform as new entities / Coalition partners vow they will stick together

Gunboy — Wed, 03 Dec 2008 14:37:22 +0000