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THAILAND'S SURVIVAL IS AT STAKE



                      GUEST COLUMN/ECONOMIC CRISIS


THAILAND'S SURVIVAL IS AT STAKE
31.8.97/BANGKOK POST
AMARIN KHOMAN

THAILAND'S CURRENT ECONOMIC NIGHTMARE CAN ONLY BE SOLVED WHEN A
COMPETENT AND HONEST GOVERNMENT IS IN POWER

Towards the end of the Ayutthaya Period, Thai people were
governed by weak and corrupt rulers, armies and civil servants.
The happy-go-lucky characteristics of the Thais- sanuk (joy) and
mai pen rai (never mind)?prevailed. They were spoiled and did not
care about the future, living on a day-to-day, care-free
existence. When the Burmese learned about the "weakness" of the
Thais, they sent troops to invade Ayutthaya and destroyed the
capital city. King Taksin and King Rama I the Great later
mobilised patriotic Thais and drove out the Burmese troops from
Thai soil. 
     
The current economic crisis reminds me of the situation before
the fall of Ayutthaya. Our country is facing both internal and
external threats. Thailand's survival is at stake. Mounting
economic, social and security problems, created and accumulated
by some previous governments, together with the existing unsolved
problems, place the country in a very fragile and vulnerable
situation.

This time, however, the threat does not come from Burmese troops.
We are facing an economic invasion by countries with stronger
economies.

Since Prime Minister Chavalit Yongchaiyudh came to power nine
months ago, the Thai people have experienced a series of turmoil
unsurpassed by any other previous government. It started with his
pledge to create a "Dream Team" to improve the well-being of the
people. "Now is the time to eat well and live well," he told the
electorate in November 1996.

His pledge has now become a "nightmare", as people suffer from
economic hardships. Perhaps; it's about time that Gen Chavalit
changed his party's logo from "sunflower" to "dok phutan"
(changeable rose), which actually changes colours three times a
day.

The combination of some corrupt, inefficient politicians,
government officials and certain businessmen with strong
political ties led to the recent collapse of 42 finance
companies. This greatly affected the general economic and
political atmosphere of the country. People from all walks of
life were made to suffer.

Taking advantage of the nation's ailing economy, George Soros,
the legendary currency raider, speculated against the baht and
invested in the Foreign Exchange Swap Market. He lost some money
in the beginning but made huge profits later on. Soros reasoned
that the weakness of the baht was there for everyone to see. Even
an ordinary student of Thai economy should have realised that a
devaluation of the baht was going to happen due to its bad
management, and all he had to do was to accomplish his task.

The Thai government's "inaction" in the face of this threat is
baffling. We have to give credit to Malaysian Prime Minister
Mahathir Mohamad, who defied Soros and exposed his action. To
make matters worse, Western critics did not hesitate to defend
Soros. US State Department spokesman Nicholas Burns publicly
praised Soros as a highly respected individual in the US who has
done a lot of good deeds around the world, especially in Europe.
Again, Burns acted in a most irresponsible, shameful and
unforgivable manner. Is it a confirmation of the US government's
intention to take advantage of a much smaller nation?

The country's continuously decreasing official foreign reserves
have forced the country into a corner. With the ardent support of
the Thai government, the International Monetary Fund, backed by
the US and Japan, was allowed to step in to put certain pressure
and enormous restrictions, pretending to assist in salvaging the
Thai economy. It is outrageous that a foreign institution such as
the IMF has stipulated and enumerated regulations for the Thai
government to follow.

It will, of course, make a big difference if the IMF facilities
are fully utilised by a small developing country like Thailand.
But there is a possibility that foreign governments or
institutions like the IMF may eventually take control of the
economy and politics of a nation if corrupt and inefficient
politicians and government authorities allow them to do so. This
could happen to any country governed by corrupt and inefficient
officials.

To solve the ailing economy, the Chavalit government initially
took desperate steps to assist the real estate sector's inability
to sell 50,000 units of apartments and 200,000 units of houses.
Instead of helping the millions of Thais who badly need places to
live in, the government tried to sell the country just to please
the leader of a coalition party who has close ties with some
businessmen involved in the property business.

Another impetuous step being taken is the extension of loans only
to the very few big corporations, leaving small companies in the
dump. What's the reason behind this?

The cabinet's decision to allow 5,000 Hong Kong-Chinese
businessmen to work in Thailand by simply showing a
10-million-baht bank account, while most Thais and foreign
businessmen who are already in Thailand are still suffering from
the economic crisis, is bizarre. Was there any vested interests
involved?

     
Also, using taxpayers' money to guarantee huge loans is a comical
policy.

The only way out of this mess is to have a credible, capable and
honest government which is dedicated to protecting the interests
of the country and the public. Is Gen Chavalit really capable of
providing such a government?

Mr. Amarin Khoman is the president of the Thai Stars Group of
Companies. 

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