Yet the challenge to success is how wisely the government can eliminate the dark side of market forces.

Surayud upset those who used to support Thaksin, because the retired general is not keen on economics. In the eyes of Thaksin supporters, Surayud, so far, has not proven himself to be on a par with Thaksin in persuading others to follow his leadership in economic management.

Knowing his own limitations, Surayud assigned his two deputy prime ministers, MR Pridiyathorn Devakula and Kosit Panpiemras, to supervise economic policy.

Pridiyathorn, also finance minister, is a former central-bank governor. Industry Minister Kosit is a former executive chairman of Bangkok Bank and deputy secretary-general of the National Economic and Social Development Board (NESDB), a state-owned think-tank.

The two men are considered market followers. Pridiyathorn's first move was a reduction of government price subsidies for rice farmers, followed by reining in state-owned banks.

He exposed the negative side of the rice-subsidy scheme under the former Thaksin government that resulted in a taxpayer burden of Bt18 billion. Plus special financial institutions experienced a relatively high rate of non-performing loans.

Indeed, these actions were put into place to prevent popular greed from increasing consumption. Pridiyathorn also warned that more action would follow to discipline spending.

Therefore, observers predict the possibility that a large number of voters who were happy with the easy spending of the former government might participate in street rallies.

Kosit has placed productivity on the national agenda. Productivity is very important to sustainable capitalism but very hard to practise. Deposed Prime Minister Thaksin rarely put this word before the voters.

Thaksin might have realised they would not understand this abstract virtue, or perhaps he himself failed to appreciate the concept.

Renowned American economist Paul Krugman has often said politicians could never sell productivity to voters, because they simply do not care about it.

In plain English, productivity means using less capital, less labour and other resources to produce more goods. Past high growth in Thailand was underpinned by mobilising large inputs of labour, capital and national resources for production.

Sustainable economic growth needs a rise in productivity, not an increase of inputs.

Thailand uses "total-factor productivity" to measure economic efficiency, and its growth rate has been dismal, 2-3 per cent annually.

A sufficiency economy, as promoted by His Majesty the King, is in line with the principle of productivity.

While foreigners may not understand what sufficiency economy means and what its impact is on government policies, Kosit explained that "This means that we have to increase productivity, demand for higher ethical standards and focus on the quality of economic development."

The Thaksin government allegedly practised cronyism: bending capitalism to benefit the PM and his friends at the expense of others. The Surayud government promises to raise ethical standards for economic management, get rid of conflicts of interest and introduce transparency.

Virtues like productivity, ethical behaviour, transparency and fair play are integral parts of a well-functioning capitalism but obstacles to those who want to "get rich quick".

Observers are worried how the present government can implement these virtues.

"We can do it within one year, and I have listed all that I must achieve," Kosit asserted.

The Surayud government is apparently content with an economic growth rate of about 5 per cent annually. The government does not have ambitions to boost growth as high as possible by using public spending, which was Thaksin's goal. Well aware of the narrow growth base of the economy, critics are worried that a large part of society will not benefit from this moderate growth rate.

NESDB secretary-general Ampon Kittiampon insists evidence suggests that a 4-per-cent growth rate can absorb new employees who have just finished their university education.

Market forces are both on and against the government's side. Oil prices have become more stable, a positive factor. The world economy has slowed down, and this will affect Thailand's exports next year. Market forces have also pushed the baht up substantially, which is not good news for the export sector, but investors in the stock market welcome capital flows into the stock market.

Yet the market has no mercy for anyone. The government apparently does not take an extreme position like the International Monetary Fund (IMF) did in the initial stage of its effort to rescue the Kingdom from the 1997 crisis. Hoping to win market confidence, the IMF wrongly implemented drastic cuts in fiscal spending, which led to a sharp contraction of the economy and social crises in subsequent years.

The Surayud government will run a "small deficit" for fiscal 2007, in response partly to the world economic slow-down. The message from the government is it cannot do much about market forces and that following market trends will be safer for the economy.

In learning from the past economic crisis, the IMF's miscalculation of the rescue package and the undisciplined policies of Thaksin should serve as lessons for the current government. Hopefully, the Surayud government will lead Thailand on a safe path, although it may not be a smooth one.

Wichit Chaitrong

The Nation