They are now lauding "Thaksinomics" and yearning for the return of the good old days of ousted prime minister Thaksin Shinawatra. It seems they have come to love Thaksin's style of capitalism.

At the same time, these three publications have slammed the Sufficiency Theory, as if it would turn the clock backward and lead Thailand down the drain. They tried to link the Sufficiency Theory with all the things that have gone wrong with the Surayud government, from the military coup, the capital controls to moves to revise the Foreign Business Act.

The Surayud government might not have come into being through a legitimate democratic channel, because it was appointed by the military leaders who staged the coup on September 19 last year. However, the coup took place against a backdrop that all legal channels and the system of checks and balances had failed to rein in the corrupted power of the Thaksin regime. Nobody likes the coup. But it happened because the political crisis had reached a dead-end. The coup has nothing to do with the Sufficiency Theory.

The Surayud government might have shot itself at the foot by introducing capital controls to curb the surging baht. It could have cut interest rates or slapped a tax on money market bonds to relieve upward pressure on the baht. But the capital controls also have nothing to do with the Sufficiency Theory.

The Surayud government might have failed miserably to communicate with international investors about the revised Foreign Business Law, which was, overall, a good move. The changes to the Foreign Business Law do not add new industries or services for protection. So, how could it be deemed protectionist? It only defines existing regulations more clearly and tries to create a level playing field. No law is perfect. This can be debated further in the National Legislative Assembly. There is no need to panic. If it was that bad, DTAC would not have announced yesterday that it will invest Bt30 billion over the next three years to expand and upgrade its mobile phone network. Again, the revised Foreign Business Law has nothing to do with the Sufficiency Theory.

You may recall, when Thaksin came to power in 2001, the Asian Wall Street Journal, Newsweek, The Economist and most other international publications questioned his policies. In an attempt to win votes, Thaksin introduced a range of populist and "easy money" policies that went against the free-market principles and capitalism that The Economist and Asian Wall Street Journal editorials claimed to champion.

The populist policies under Thaksinomics that shocked the world in its early years have now become a darling of these foreign publications. How can things turn upside down so quickly?

Thaksinomics has left Thailand with more than Bt150 billion in debt arising from subsidies for farmers' programmes, labour and social policy programmes, education programmes, agricultural bank loans that had gone wrong, rice and rubber subsidies, village funds, and the universal healthcare scheme. And that doesn't include Bt80 billion for the diesel subsidy. The Surayud government has had to set aside Bt80.5 billion in the current fiscal year to pay for these huge debts.

Let me point out the flaws of Thaksinomics that has gone against capitalism and the free-market principles that The Economist and Asian Wall Street Journal so cherish.

First, Thaksinomics prescribed a debt moratorium for farmers. Was this populist policy in line with capitalism and the free-market principle? Thaksin was promoting a culture of debt write-offs. At the heart of capitalism lies the honouring of loan contracts. If you borrow the money, you have to repay it later, plus interest.

Second, Thaksinomics threw easy money around into several populist projects - the village funds and other subsidies that have become a source of corruption and saddled the country with a huge debt load. The 30-baht healthcare scheme was one of the few good projects by Thaksin, but it was poorly implemented, and going forward, the fiscal budget might not be able to finance it.

The grass-roots people, of course, loved the handouts and they came to identify these with "Thaksin's money", things they did not have to repay. Instead of using the money for investments, the handouts were spent on mobile phones, motorcycles and pick-up trucks that ended up creating more debt for poor rural people. Thaksin could artfully spend public money to buy votes. Did the Asian Wall Street Journal cover a series of stories on what went wrong with the village funds in the early Thaksin years?

Third, Thaksin and his team hated Time, Newsweek, The Economist, the Far Eastern Economic Review and the Asian Wall Street Journal. Do the editorial writers of these publications recall the foreign press' spats with the Thaksin regime? A few years ago they were covering stories that suggested the Thaksin regime was intimidating the press. How come they now kiss mouths with him so dearly?

Fourth, the international press jumped against Thaksin when he announced in 2001 at a UN seminar that Thailand would turn "inward-looking" against unfettered capitalism. Thaksin wanted to pursue a dual-track policy to emphasise domestic demand. With Thailand reeling since the 1997 financial crisis, he wanted Thailand to walk away from the East Asian economic model that promoted exports as the engine of growth. He was then suspicious of foreign money and the uncertainty of foreign markets. He wanted to rebuild Thailand through domestic demand.

Fifth, Thaksin and his team had bad-mouthed the US over its global role. They hated the IMF and the World Bank. They were suspicious of Western dominance. That's why Thaksin moved to shift Thailand's foreign policy toward China and, unsuccessfully, at one point, toward Russia. They envisioned a rise of Asia, which would counter the West's long imperialist grip over the world. They thought that Thailand could contribute to this Asia resurgence by playing a catalyst role in support of China and Japan, who together could form an axis to go against the Western powers.

I leave it to readers to think for themselves whether Thaksin's foreign policy was good or bad for Thailand, but I wonder how come The Economist and Asian Wall Street Journal love his policies unreservedly when these policies appear to clash with their fundamental beliefs?

Along the way, Thaksin could get away with all of his mistakes, ironically, because of the exceptional performance by exporters. Exports were the catalyst of Thai economic growth during the Thaksin era - not domestic demand or his populist policies. With the current account surplus, Thailand was be to rebuild its international reserves and Thaksin could pursue an "easy money" policy without having to worry about public debt. The low interest rate environment, the sound global economy and high exports were the true story behind the economic growth during his time in power.

But Thaksin was exceptionally good at marketing. He could revive hope for the grassroots people and rebuild domestic confidence to make it sound as if he alone saved the Thai economy.

Then he fine-tuned his policies by gradually walking away from past mistakes by embracing privatisation, mega-project investment, free-trade agreements and stock market promotion - areas that the foreign investors liked to embrace - without any feasibility studies. At the same time, his cronies went on to amass wealth without any checks until his regime was toppled last year. Now Thaksin and the foreign publications are blaming the Sufficiency Theory as the root of all things going wrong in Thailand at the moment. Sufficiency Theory, as espoused by His Majesty the King, calls for a middle-path practice, like Buddhism, which can be applied to all the sphere of human activities. It does not go against globalisation or the principle of a free market, but it urges moderation and "self-immunity" as pointed out by MR Pridiyathorn Devakula, the deputy prime minister and finance minister.

If you practice moderation, you should not run into debt beyond your ability to repay. With moderation, businesses or economies should not over-leverage their borrowings, otherwise they would run into a 1997-style crisis again. If you run your business with moderation, you reduce the chance of bankruptcy. With self-immunity, you have to make sure that when the worst comes, you have to survive. Again, businesses and economies must make sure that they can survive, say, a Sars epidemic, a global oil shock or terror attacks. Thailand is now buying oil imports equivalent to 10 per cent of its GDP. This goes against sufficiency. For when the price of oil rises, the overall economy is hurt. So Thailand has to find alternative resources of energy to reduce this high oil bill. If it can cut oil imports to 3-4 per cent of GDP, then it is practising sufficiency theory. As you can see, we don't practise sufficiency theory by cutting back oil imports 100 per cent. We only need to bring the risk down to a level we can manage. By practising moderation and self-immunity, you are pursuing sufficiency - not self-sufficiency. So stop distorting the facts.

Thanong Khanthong

The Nation