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Published on July 17, 2007

Every day headlines shout the good news: insurrection in the South is getting better, the economy will improve next quarter; exports rise; bombers arrested; and Thaksin to be prosecuted. The government wants us to believe all is well when all is falling apart. Taken together the negative elements are a witches brew ready to spill out of the cauldron. Here are a few worries.

Exports remain strong thanks to industries that assemble imports such as electronics. Home-grown exports in agriculture, clothing, etc, are shrinking. This will negatively affect the employment of a large population, causing unrest and protest. This has already begun.

Highly speculative money is flowing into the SET. The baht strengthens. And yet the underlying economy is weak with domestic consumption falling and government spending behind schedule. Banks are cautious and lending percentages are below average.

Thailand does not have a developed bond market. Investment is financed with short-term money. If this short -term money is pulled out, the economy falls.

Thailand receives failing grades in education. Education reform is a misnomer since test results show languishing skills of Thai students.

Media freedom, sinking before the coup, is in tatters. Websites are blocked, TV is restricted, self-censorship is encouraged, books banned.

The environment is deteriorating. Industry waste chemicals pollute the water and air. Forests are stripped bare. Flooding is exasperated by ecologically questionable programmes.

Because it is not close to a reality, democracy should not be mentioned. But it is spoken about daily. Most people on the street do not know what democracy is. They cannot define it. They do not understand the function of a constitution. Votes can easily be bought or peoples opinions swayed. Little is done to prevent this.

The southern insurrection is intensifying. Almost every day another bombing, beheading, killing, or burning occurs. Thaksin's years of neglect cannot be righted in a few cursory visits by a prime minister who does not have experience in this most delicate form of diplomacy.

The power base in Bangkok is comprised of several conservative elements but freedom and democracy is anathema to them. As the status quo has benefited them, any adjustments to the current state of affairs will be assailed.

The military is stronger today than a year ago. With the Internal Security Operations Command (Isoc) implanted throughout the country, and the potential for it to be further strengthened via the Internal Security Bill, the Army is poised to dominate for years to come. This may be in response to the fear and loathing of Thaksin or the military's own quest for power. Either way, the end game is being readied.

All of the above serve to weaken the country's political, economic, moral and ethical infrastructure. This leaves the country vulnerable to a single destabilising event.

That watershed event will happen soon. This will expose a destabilising power vacuum. The disenfranchised and marginalised will see opportunity. The same opportunity will be seen in the South. Residents of Bangkok and surrounding areas will have divided allegiances. New power cliques will be formed with disparate factions joining together for survival.

The two strongest factions will compete; supporters of Thaksin and perhaps Thaksin himself on one side; the military and the wealthy conservative elite, perhaps lead by General Sonthi Boonyaratglin, on the other side.

If the military controls the government, the former Thai Rak Thai members and those in sympathy will attempt a coup. If the military is not in power, two attempted coups, one by the military and the other by Thaksin supporters, could stage simultaneous coups. In either case civil war would be inevitable. A civil war is a lose-lose situation for the country. The South will break away, perhaps aligning with Malaysia. The Northeast will align with Laos. Burma may have designs on chunks of the country. Cambodia is the wild card.

This is old stuff. It has been happening throughout history. Any sane person will quickly say impossible. But look deeply into the country's ills. And look deeply into the heart of darkness that beats inside many men. Impossible? We hope so. But let us not just hope. Let us face the problems. Let sane men disagree but work together, compromise and cut the Gordian knot.

Tom Fin

BANGKOK

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Strange shenanigans in the world of finance

Be aware that international investors have watched closely what has been going on in Thailand since the bloodless coup in September.

As the current government is an interim one, Deputy Prime Minister and Industry Minister Kosit Panpiamrat is aware that if he also supervises the Ministry of Finance, he would be barred from going back to resume his former job as Bangkok Bank executive chairman during the two-year hands-off period after leaving politics. Though not overseeing the finance portfolio, and hence the central bank, Kosit has made at least two missteps into the minefield into which he refused to trek from the beginning.

Kosit recently commented that the central bank still could lower the interest rate further to stimulate the domestic economy and consumption, similar to what Japanese Finance Minister Koji Omi had suggested to BOJ governor Toshihiko Fukui: to no avail. Ironically in the Thai case, Finance Minister Chalongphop Sussangkarn suddenly dismissed the likelihood of lowering interest rates further.

Then the industry minister early this week reached out to summon Bank of Thailand governor Tarisa Watanagase for a one-on-one meeting without the knowledge of the finance minister. Though it could be explained that Kosit acted in response to a concerted call from the private sector for the central bank to intervene in the foreign exchange market to halt the appreciation of the Thai currency, the most vocal of all noises came from the minister's former banker colleague, who has been serving the ousted prime minister in the private sector since he left the oldest Thai bank and also advises the Ministry of Finance.

Aside from advising Thaksin on overseas investment and tax havens, the adviser has been brewing up something else in Bangkok.

Sornnagi Kumar

NEW YORK

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Is the cash for football club really clean?

In regard to Jaruvan chasing another Bt500 million, Thaksin's lawyer states that everyone knew that he had more than Bt60 billion in assets 13 years before he entered politics. Well, let us hope that he is buying a foreign football club and its people with that legally earned money and not with the countless billions which he has made since entering politics.

Mr Bird

CHIANG MAI

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Thaksin is already interfering with play

I was half joking when I wrote before that Thaksin would include Thai nationals in his team selection, but Reuters has just published an article stating that Thai goalkeeper Kosin Hathairattanakool is "flattered by reports" linking him with a move to English Premier League side Manchester City.

They say local media reported that Kosin was a transfer target of the English side's new owner but the "modest stopper" thinks the top league in England might be a little beyond his reach.

"When I heard about these reports, I thought it was a joke," Kosin told Reuters. So did I, but I can't say I'm really that stunned that Thaksin's got the brass balls to actually go ahead with taking team selection away from Eriksson just yet.

Level 8

BANGKOK

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Ghost stories to lighten up your breakfast

Re: "Jail ghost story smacks of superstition to reader", Letters, July 15.

Bernie Farber asks "Do we really need a front-page story that celebrates ignorance and trumpets superstition?", referring to the item about monks performing exorcisms in a jail cell.

While reading such items may disturb his breakfast, I would encourage more such articles - it gives us a much better understanding of what this "Buddhism" is that some Thais are asking to be included as the national religion in the new constitution.

Bkk guy

BANGKOK

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