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“29716”,”3/29/2005 23:51″,”05BANGKOK2219″,”Embassy Bangkok”,


“CONFIDENTIAL”,””,”This record is a partial extract of the original cable.


The full text of the original cable is not available.


“,”C O N F I D E N T I A L SECTION 01 OF 05 BANGKOK 002219







E.O. 12958: DECL: 03/29/2015

TAGS: PREL, PGOV, ECON, TH, Corruption,



Cabinet Reshuffle, US-Thai FTA, Southern Thailand




Classified By: Ambassador Ralph L. Boyce. Reason: 1.4 (d)


1. (C) After six and a half years away and three months back,

this seems as good a time as any to review the landscape in

Thaksin Shinawatra,s Thailand. For starters, there is the

towering figure of the Prime Minister himself. Dominating

the scene as no previous civilian leader has ever done,

Thaksin,s influence is everywhere. The Bangkok elite, which

embraced him as the next new thing four years ago, has grown

scornful of him, but he actually revels in thumbing his nose

at the capital\’s chattering classes. Himself a self-made man

from the provinces (according to his myth makers), he has

successfully tapped into the aspirations of Thailand\’s

millions. And unlike previous regimes that rode into power

by buying the loyalties of the rural areas, Thaksin has also

won over the millions of Bangkok residents who are not from

the traditional elite ) the mom and pop shopkeepers, the

taxi drivers, the food stall vendors, department store

salespeople and the day laborers. In 2001, for the first

time in history, Bangkok voted along with the north, the

northeast and the central plains. In 2005, this phenomenon

actually grew stronger, as Thaksin,s machine swept 32 of

Bangkok\’s 35 seats. (The south — as noted below — was a

significant and problematic exception.) In the country as a

whole, Thai Rak Thai\’s (TRT) grip on 377 of Parliament\’s 500

seats is an unprecedented feat for a single party.




2. (C) But is this really &one-party rule,8 as the

newspapers love to shriek? A look at the 377 seats shows

that Thaksin is actually atop what amounts to a four- or

five-party coalition, i.e., more in line with recent Thai

political experience. Leaving aside the 67 party list

members who were elected on a national slate, a break out of

the 310 constituency seats reveals the following: 165

previous TRT members, 46 from three defunct parties

(Seritham-12, New Aspiration Party-17, and Chart Pattana-17)

that merged with TRT, 21 defectors from other parties (Chart

Thai-12, Rassadorn-1, and Democrat Party-5), 11 pre-2001 MPs

and more than 40 &inheritances,8 i.e., sons and daughters

of MPs from feudal-like constituencies. In putting together

his cabinet this time around, Thaksin had to juggle and

placate the various factions just as Prem Tinsulanonda or

Chatchai Choonhavan used to have to do repeatedly with their

unwieldy coalitions.


3. (C) That said, Thaksin has significantly altered the Thai

political scene, possibly forever (or at least as long as he

is around). In the 2001 and 2005 elections, he and his party

campaigned on issues and promises (affordable health care,

village loans), and then essentially delivered the goods.

Today Thailand basically has a two-party system, with Thaksin

having run the most recent campaign as a referendum on him, a

referendum that he most definitely won. The opposition is in

disarray, with the Democrats having been reduced to a weak,

regional party and the rest of the rabble having almost

disappeared (or been absorbed by Thaksin\’s juggernaut).

Thaksin accomplished this by mastering the reforms of the

liberal 1997 constitution, which altered the electoral

mechanics from three-member constituencies to the party

list/single member format. In power, he took full advantage

of the new charter\’s creation of a strong executive, while

distorting, dismantling or delaying the new \”watchdog\”

institutions that were supposed to check and balance that new

executive power.




4. (C) Now Thaksin has a second term and a new cabinet with

29 of the 35 ministers reshuffled from the previous slate.

This is probably a good place to note that Thaksin,s vaunted

&CEO style of management8 differs markedly from the model

which would have the company listed on the stock exchange,

shares traded on the market, stockholders to placate and a

board of directors to be responsive to. No, Thaksin,s style

is much more like the family-owned private company where the

CEO speaks and the lieutenants carry out his will ) much

like, say, Shinawatra Corporation used to be while Thaksin

was making his billions, or dozens of other Thai



5. (C) And now he runs his cabinet just like that. Among the

35 ministers are Thanong Bidaya, Thaksin,s former banker

(and widely rumored to have tipped Thaksin off about the

coming baht devaluation when Thanong was Finance Minister in

1997), four former aides, six business friends, one police

classmate, one family doctor and only eight MPs. Thaksin

today has ably positioned himself to be the only star in the

political constellation and could thus well be around for the

next eight years or more.


6. (C) That is, unless he stumbles. Analysts have been

predicting another debt-driven economic crisis since the day

he put his rural lending scheme into effect and everyone

upcountry suddenly had a cell phone and a pickup truck. Or

the south could erupt (see below). Or, simply, the Thai

people could exercise their penchant to tire of the same old

thing and go for the next new thing. For the moment,

however, there is no other thing than the Thaksin thing.




7. (C) Except maybe the King. In the age of Thaksin, the

King has on several occasions made public his differences

with Thaksin,s style and more importantly, his philosophy.

As respected former Prime Minister Anand Panyarachun puts it,

Thaksinomics teaches that it is OK to be greedy and that

money fixes everything. The King\’s idea is somewhat

different and has been neatly summarized in a short pamphlet

called, \”What is Sufficiency, Economy?8 This pamphlet

draws on royal utterances over the past 25 years and

essentially calls for a rural-based model of sustainable

development. Of late, the pamphlet is being flogged by Privy

Councillors, the head of the Crown Property Bureau, and

noteworthy columnists as the antidote to Thaksinomics.


8. (C) In addition, Bangkok observers have been aghast at

what they perceive as Thaksin,s unwillingness to be

appropriately obeisant to His Majesty. In the recent

campaign, they claim, he swanned about upcountry as though he

were the sovereign of the country. He is visibly impatient

with the many royal ceremonies he has to sit through where he

is not the center of attention. In this year\’s Mahidol

Awards, he fussed and fretted in his seat while the King

spoke softly to the American and German doctors who were

being honored.


9. (C) But the King will not be around forever, and Thaksin

long ago invested in Crown Prince futures. Nevertheless, the

debate over Thailand\’s direction has been joined, with the

outcome still in question.




10. (C) Thaksin is very rich. According to Forbes, after

distributing some of his assets to his children, the PM is

the third richest man in Thailand (after Charoen

Sirivadhanabhakdi, Chairman, TCC Group, who owns Chang beer

and has extensive real estate and hotel holdings, and Chalieo

Yuwittaya, who produces and sells the \”Red Bull\” energy

drink). Does Thaksin really need to make more money? Or do

people just unfairly and lazily ascribe every thing he does

to an ulterior profit-making motive? Every indicator seems

to suggest the adage that power corrupts and absolute power

corrupts absolutely. Thaksin, his family and his business

and political allies have made immense profits in the past

four years and seem on track to continue doing so. Is it

something in the entrepreneur\’s gene pool that cannot switch

off the quest for more, better, greater, now, now, now?

There are nuances to understand, but in all aspects of public

life (Burma policy and the current follow-on jet fighter

acquisition deal come to mind), a good case can be made that

business or political considerations are uber alles.


11. (C) Recall that Thaksin was driven out of the Foreign

Ministerial portfolio in 1994 because he refused to make

public his assets. Recall that he entered his Prime Ministry

in 2001 under a cloud when he finally grudgingly gave up

control of his wealth -) and even then only to his wife,

children and, in one memorable instance, his servants. In

any event, if corruption has indeed reached historic

proportions, as many claim, the people seem willing to

tolerate it as long as the rising tide lifts all boats.




12. (C) If business considerations are indeed primus inter

pares, shouldn\’t that bode well for our FTA negotiations?

The answer is a guarded yes — Thaksin has made it clear this

is his initiative and that he understands a U.S. FTA will

have to be comprehensive. This will be our single most

important weapon, to be deployed when the bureaucrats and

single-issue players create stumbling blocks. But that

assumes we will be able to get his attention. As long as his

laser beam is focused on an issue, he dominates that issue.

But the minute the beam moves on to another area, the carpet

mice run back out. And in the Free Trade area in general,

the current feeling in many pivotal sectors like financial

services, indeed, in the country as a whole, is that FTAs are

not in Thailand\’s interest.


13. (C) When Thaksin is not engaged in the process -) and

that will be most of the time -) his two most senior

economic aides and loyalists, Pansak Vinyaratn and Somkid

Jatusipitak, will call the shots. Pansak seems to understand

his boss\’s desires, and while he can always be counted on to

come up with nutty, flaky ideas, he essentially will be an

ally in the negotiations. Somkid is another matter. He

talks a good game, and parrots Thaksin,s free trade

rhetoric, but we have our doubts about his true commitment to

the cause. We need to mount an aggressive public relations

campaign to the effect that &both sides give8 so &both

sides get8 in a successful FTA. We can also point out the

high opportunity costs entailed in passing up the FTA. This

will be an uphill battle, in the aftermath of Chinese and

Australian FTAs widely perceived to have been in Thailand\’s





14. (C) Thai traditional foreign policy style has been

understated, subtle, even graceful, and widely lauded within

ASEAN as among the most professional. Together with

Malaysia, Singapore and Indonesia, Thailand has helped define

the &ASEAN way8 over the years. Eschewing conflict, always

seeking that elusive &consensus,8 keeping problems behind

closed doors — this was the formula within ASEAN for

decades. But notably, under Thaksin, Thai foreign policy

style has been most un-ASEAN, and even un-Thai. Today, with

Thaksin often in the lead, Thailand is much more

unilateralist and often prone to practice megaphone diplomacy

in place of quiet persuasion.


15. (C) The recent tsunami conference in Phuket was a

perfect example. Even as conferences were being organized in

Japan, Indonesia and elsewhere, Thaksin,s then-Foreign

Minister Surakiart suddenly announced that Thailand would

host a conference with a view towards establishing an early

warning system for the Indian Ocean region as a while.

(Admittedly, much of this had to do with Surakiart\’s

bombastic style, and his own naked ambitions.) The Thai made

little secret of the fact that they expected the center to be

established in Thailand. Surakiart browbeat key countries

unceasingly to send ministerial-level attendees. In the U.S.

case, he was nothing short of delusional, seriously proposing

that Secretary Rice attend as her first official act after

being confirmed. (He even promised to &personally8 escort

her to the devastated Khao Lak area.)


16. (C) In the event, the conference was largely attended by

technical ministers or resident Ambassadors, and the Thai

dream of achieving consensus on establishing the center here

fell apart when the hosts forgot the cardinal tenet of ASEAN

diplomacy ) always pre-cook the deal in the hallways.

Instead, they crudely tried to ram their preferred outcome

down the throats of the 40-odd attendees. When several

significant countries objected )- including India,

Australia, and most notably fellow ASEAN member Indonesia -)

the conference ended with Surakiart suggesting that those

countries not happy with the Thai proposal should take a

hike. It was not a pretty sight.


17. (C) The tsunami conference was a recent example, but in

general Thailand\’s relations with Malaysia and Indonesia over

the south have taken on a shrillness not frequently seen

among these founding members of ASEAN. In Burma policy, the

Thai effort to come up with a &Bangkok Process8 to give

them cover to pursue largely their own narrow interests in

Burma has collapsed. It is telling that the lead efforts in

recent weeks on the problem of Burma rotating into the 2006

ASEAN Chair have come from Singapore, Malaysia and Indonesia

rather than from the Thai.


18. (C) And then there is China. Some are concerned about

Chinese inroads into Thailand and indeed the region as a

whole. The Thaksin government seems to be embracing the

Chinese wholeheartedly. Thailand is being portrayed as the

gateway to China. Is this a concern for the U.S.? With the

benefit of three months, reflection, it seems to be less of

a zero-sum game than might appear. The Chinese are

indisputably very active. Yes, they have better tailors and

speak better English. Yes, they are very close with the

largely Sino-Thai crowd that dominates the Thaksin

government. But is every Chinese gain necessarily at our

expense? It seems to be more a return to traditional

patterns in the region over hundreds if not thousands of

years. This is China\’s neighborhood, and while they were out

of the picture for fifty years after the end of World War II

(precisely the period when U.S. presence was paramount), they

are back, and they are bringing the A team. For reasons of

geography, we cannot realistically match the Chinese

visit-for-visit. But we are capable of directing more

high-level attention to the region, and we should.




19. (C) The past twelve months have brought a series of

increasingly serious developments in the three southernmost

Muslim-majority provinces. In January 2004 the armory was

raided. In April the Krue Se mosque incident raised the

level of violence and government response to new proportions.

Increasingly violent protest was met with more and more

force. Last October, the horrific Tak Bai event saw 78

prisoners suffocate while in police custody, after which the

Prime Minister most unhelpfully suggested that the prisoners

had died because they were &weak from fasting8 in the holy

month of Ramadan! The February election was a debacle for

TRT in the three provinces, as the party lost all but one

seat. Still the hard-line approach continued, with Thaksin

unveiling his plan to withhold all government funds for

districts judged to be problematic. Indeed, Thaksin and many

of his hard-line supporters around the country view the

election outcome in the South as vindication of the

government\’s policies.


20. (C) Fortunately, of late there are signs the PM may be

willing to consider a new approach. His appointment of the

Anand commission would seem to be a no-lose proposition -)

provided he is really willing to consider whatever

recommendations the panel ultimately makes — and, more

importantly, conveys that impression to skeptics in the

south. Some cynics have suggested the Anand appointment is

simply a cynical sop to mollify the Bangkok elite Thaksin so

despises. If it is (and we don\’t think it is), Thaksin will

have made a mistake, because Anand will not let himself be

used by anyone and he won\’t be shy to speak his mind.


21. (C) The south is not a new problem. Some point to

Thaksin,s 2001 disbanding of a joint

military-police-civilian task force (at the urging of his

fellow policemen) as the root of the problem, but in fact its

origins go back a hundred years, to the very incorporation of

these ethnically and religiously different areas into the

Siamese Kingdom. The Thai have yet to make a concerted

effort to understand the culture and values of the Muslim

south, a fact which has only compounded Muslim sensitivities

in general since the onset of the global war on terror. It

is high time that this neglectful, superior attitude changed.




22. (C) There are plenty of areas where Thaksin deserves

credit. The tsunami disaster was generally well handled,

turning a national calamity into an opportunity to

demonstrate that Thailand can take care of itself. Moreover,

the fact that the relief effort was centered out of Thailand

was greeted in the region without dissent. The image was of

an emerging leader helping weaker states in the neighborhood

like Indonesia and Sri Lanka.


23. (C) And however Thailand\’s quixotic campaign to put

now-former Foreign Minister Surakiart in the UN Secretary

General\’s job ends up, if nothing else it is further

demonstration the Thailand desires to play more of a global

role. Bangkok is a much more livable city today than it was

twenty years ago, traffic is manageable, the air is cleaner,

the airport is first-class, the Thai smile is still charming

and as a result the country is legitimately challenging

Singapore and Hong Kong as a regional business hub. That is

a good thing, it started before Thaksin rose to power, and it

is a trend we should encourage.




24. (C) In Indonesia, everything we do charts new territory

and defines our relationship with a country that is literally

reinventing itself from soup to nuts. In Thailand, we have a

mature, deep-seated, historic friendship with a stable,

sophisticated partner. The scars of the 1997 financial

crisis (when the U.S. was widely perceived as having failed

Thailand in its hour of need) linger, but not with Thaksin.

He very much sees the past as past, and is focused much more

on the here and now, and prospects for the future. He

studied in the U.S., and likes our business model. All of

this is very good for us.


25. (C) The U.S. response to the tsunami was a huge public

relations plus for us, but we do have to confront a general

sense of unhappiness with elements of U.S. policy that have

nothing to do with Thailand -) the war in Iraq is not

popular here, despite the Thai having sent forces.


26. (C) In general, though, we continue to enjoy huge

advantages in Thailand that few other countries can rival.

The fact that the Embassy is among our largest in the world,

and growing, is testament to this. The real challenge for

us, and increasingly for the Thai, is to resist relying too

much on the mantra of the \”historic relationship.\” Instead,

we need to bring this important partnership into the 21st

Century, and channel our long-standing influence in positive

directions, including the further consolidation of democratic

institutions in Thailand. Despite the unprecedented

concentration of political power recently under Thaksin,

civil society continues to develop in a healthy, Thai way.

Thaksin\’s style is to push the envelope, but democracy in

Thailand is more resilient than his critics, Thai and

foreign, are willing to acknowledge. Here in Thailand, we

can have our cake and eat it too — by mixing classic

\”realpolitik\” (which Thaksin understands and responds well

to) with principled interventions when the need arises.




Written by thaicables

June 23, 2011 at 2:04 am

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