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05BANGKOK3471 THAILAND: TRT FACTIONAL TENSIONS FLARE OVER AUDITOR-GENERAL CONTROVERSY

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This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BANGKOK 003471

 

SIPDIS

 

SENSITIVE

 

DEPARTMENT FOR EAP/BCLTV. HQ USPACOM FOR FPA HUSO.

 

E.O. 12958: N/A

TAGS: PGOV TH TRT

SUBJECT: THAILAND: TRT FACTIONAL TENSIONS FLARE OVER

AUDITOR-GENERAL CONTROVERSY

 

REF: (A) BANGKOK 3381 (B) BANGKOK 2347

 

¶1. (SBU) Summary: Opposition to Thai Senate efforts to

replace popular Auditor-General Charuvan — up to now led by

the Democrat Party (DP) — has been taken up by one of the

ruling Thai Rak Thai (TRT) party’s key factions. Powerful

TRT faction leader Sanoh Thienthong has drawn Prime Minister

Thaksin’s ire by spearheading a petition by some 60 TRT MPs

to the Senate against submitting to the King the nomination

of former Finance Ministry Deputy Permanent Secretary Wisut

Montriwat as Charuvan’s replacement. Prime Minister Thaksin,

whose administration may be vulnerable to Charuvan’s drive to

root out government malfeasance, has reportedly retorted that

MPs should not meddle in actions by the Senate. The bold

move by Sanoh in an atmosphere of heightened attention to

allegations of bribe-taking by politicians in the awarding of

new airport construction contracts cracks the facade of unity

that the TRT had hoped to present to its critics in academia,

the press, political opposition and the general public. End

Summary.

 

MOVE TO REPLACE CRUSADING AUDITOR-GENERAL SPARKS CRITICISM

 

¶2. (U) As noted in ref. A, a decision in 2003 by the

Constitutional Court that Khunying Charuvan Methanaka’s

appointment as Auditor-General was unconstitutional led the

Senate on May 12 to name a successor, former Finance Ministry

Deputy Permanent Secretary Wisut Montriwat. This decision

sparked accusations — largely from opposition DP officials

— that the Thaksin administration influenced the nominally

non-political Senate to get rid of a troublesomely efficient

corruption investigator. Critics of efforts to replace

Charuvan say that the upper body has no constitutional

grounds on which to remove her and appoint a new successor.

Wisut’s supporters disagree.

 

THAI RAK THAI FACTION LEADER GETS INVOLVED IN CASE

 

¶3. (U) On May 26, reportedly up to 60 TRT MPs (of 377 total

TRT congresspersons in the 500 seat lower house of

Parliament), headed by disgruntled TRT Wang Nam Yen faction

leader Sanoh Thienthong, appealed for Senate Speaker Suchon

Chaleekrua not to submit Wisut’s name to the King as

replacement for Charuvan. In their letter to the Deputy

Speaker’s office, the MPs reasoned that the Constitutional

Court,s ruling, which declared the unconstitutionality of

the Senate’s earlier selection of Charuwan as the

Auditor-General, did not stipulate that she be removed from

the office. Therefore, they argued, the royal appointment of

Charuvan as the Auditor-General was still in effect, and that

presenting Wisut to the King as new Auditor-General would be

both unconstitutional and disrespectful to the King by

involving him in the controversy.

 

¶4. (U) Thaksin has reportedly scathingly rebuked some of

the MPs, telling a group on May 26 that the Senate’s actions

are not the business of the lower house and that they have to

follow the rules. Thaksin has had tense relations with Sanoh

Thienthong from the period of his first administration

(2001-5), when Sanoh regularly complained that he and his

faction were being eclipsed by a rival faction headed by

Thaksin’s sister Yaowapha Wongsawasdi and not receiving

sufficient senior appointments in the Thaksin government.

The complaints of ill-treatment became louder following onset

of Thaksin’s second term earlier this year and selection of

Thaksin’s new cabinet.

 

POLITICS IN THE BACKGROUND

 

¶5. (U) Sanoh has not attempted to conceal his unhappiness

over what he considers the slighting treatment that he and

his faction members and allies have received from Thaksin in

the awarding of offices following February’s election (ref.

B). Sanoh’s Wang Nam Yen, and allied Wang Nam Yom and the

Suchart factions, feel that they were

“awarded” a relatively small number of cabinet posts compared

to Yaowapha Wongsawasdi’s Wang Buam Ban faction and the

Bangkok faction headed by Agriculture Minister Sudarat

Keyuraphun. Sanoh’s public show of support for Charuvan, a

bureaucrat considered potentially embarrassing to Thaksin’s

government, strongly reflects factional fissures and

jockeying for position and leverage within TRT.

 

POTENTIAL PROBLEM FOR THAKSIN

 

¶6. (SBU) Comment. No one is predicting the collapse of

Thaksin’s coalition. However, the bold move by Sanoh amidst

the furor over the allegations of bribe-taking by politicians

in the awarding of new airport construction contracts damages

any show of unity the TRT hoped to present to its critics in

academia, the press, its political opposition and the general

public. Sanoh is hardly the ideal champion for

anti-corruption. He has never enjoyed an untainted

reputation and his public support for Charuvan, and by

extension her campaign to uncover government malfeasance, is

a clear shot by Sanoh across Thaksin’s bows for his own

political reasons. It is a strong signal to the Prime

Minister that Sanoh and his allies can cause trouble if they

do not receive more generous treatment in the next Thaksin

cabinet.

 

 

 

 

 

 

 

ARVIZU

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Written by thaicables

August 28, 2011 at 6:13 am

05BANGKOK2665 ANTI-TERRORIST MEASURE — RTG REQUIRES ID FOR TELEPHONE CARD PURCHASES

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This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS BANGKOK 002665

 

SIPDIS

 

SENSITIVE

 

E.O. 12958: N/A

TAGS: PGOV PTER TH

SUBJECT: ANTI-TERRORIST MEASURE — RTG REQUIRES ID FOR

TELEPHONE CARD PURCHASES

 

REF: BANGKOK 2441

 

¶1. (U) Summary: In an effort to thwart or identify and

arrest separatist bombers, the RTG intends to require that

buyers of mobile phone SIM cards show their national ID cards

to register the purchase. Following the bombings in Hat Yai

and other locations in the south recently, the RTG is eager

to show its determination to track down the perpetrators.

Critics question the effectiveness of the measures. End

summary.

 

SUSPECTED USE OF MOBILE PHONES BY BOMBERS LEADS TO

RESTRICTIONS BY RTG

 

¶2. (SBU) The RTG announced on April 17 that buyers of

mobile telephone SIMs cards will have to produce either a

national identification card or a passport at the time of

purchase. In addition, according to press reports, all 21.5

million existing prepaid Thai and foreign mobile phone system

users in the country will be required to report their citizen

identification or their passport numbers to their phone

operators within six months. Phone services will be canceled

by the government if users do not meet the registration

deadline. The decision to regulate the use of SIM cards for

prepaid mobile phones was reportedly made in response to

Prime Minister Thaksin’s instructions at the April 12 cabinet

meeting following the April 3 Hat Yai Airport bombing, in

which Thai authorities believe separatists detonated an

improvised explosive device using a mobile telephone.

 

¶3. (SBU) The new requirements were reportedly reached on

April 17 at a meeting chaired by Deputy Prime Minister and

Interior Minister Police General Chidchai Vanasatidya and

attended by top security officials such as Defense Minister

Thammarak Issarangkura, National Security Council Secretary

General General Winai Phattiyakul, National Intelligence

Director Jumpol Manmai and Police Commissioner-General Kovit

Wattana, as well as officials from the Information and

Communications Technology Ministry (ICT).

 

THAKSIN SAYS NEW REQUIREMENTS STRICTLY SECURITY-RELATED

 

¶4. (U) Prime Minister Thaksin Shinawatra told reporters

that the campaign to trace SIMs card users is intended to

follow and locate bombers quickly but must not undermine the

users’ privacy. An ICT Ministry official told reporters that

the RTG is actively seeking the cooperation of service

providers nationwide in the registration effort. This will

theoretically prevent potential saboteurs from buying cards

in peaceful areas of the country to use in the troubled

provinces. With Cabinet endorsement, the ICT Ministry is

expected to draw up the requirements as ministerial

regulations which will then be signed by the ICT Minister and

published in the Government Gazette.

 

HOW EFFECTIVE?

 

¶5. (SBU) Comment: In the wake of the bombings at Hat Yai

airport and several other locations in the south earlier this

month (reftel), the RTG is eager to show that it is taking

measures to track down the perpetrators. It is hard to see

how this effort will have an impact on the use of bombs in

the south. Already critics are being heard. National

Reconciliation Commission (NRC) member and Muslim scholar

Asmadsomboon Bualuang complains that the measure does nothing

to resolve the overall situation in the south. Bangkok

Senator Seri Suwananond reacted to the measure by saying that

forged documents (and Bangkok is the center of an

international document forgery industry) will simply be used

by separatist bombers to purchase phone cards for use in

detonating improvised explosive devices. With virtually all

of these unknown persons who have set off bombs in the

southern border provinces over the past year still at large,

we expect the bombings to continue.

 

BOYCE

Written by thaicables

August 28, 2011 at 6:01 am

05BANGKOK2322 THAILAND: THAKSIN SIGNALS SHIFT IN SOUTH POLICY

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This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS BANGKOK 002322

 

SIPDIS

 

SENSITIVE

 

DEPARTMENT FOR EAP/BCLTV. HQ USPACOM FOR FPA (HUSO)

 

E.O. 12958: N/A

TAGS: PGOV PREL TH

SUBJECT: THAILAND: THAKSIN SIGNALS SHIFT IN SOUTH POLICY

 

REF: BANGKOK 2255

 

¶1. (SBU) Summary: On March 30, Prime Minister Thaksin,

speaking to a joint session of parliament, surprised the

political establishment by suggesting that the RTG would take

a less security focused approach towards Thailand’s troubled

far south. Thaksin’s conciliatory tone, with statements such

as “violence only begets violence,” is a dramatic shift away

from past tough talk about the south. On March 31, Thaksin

indicated that troops would have a less visible presence in

the South, but would not, as some reports had indicated, be

withdrawn. Thaksin’s conciliatory speech, and the recent

formation of a National Reconciliation Commission, or NRC

(reftel), are positive developments for a region that has

received or produced only bad news of late. However,

Thaksin’s promise to use a less security focused approach

might meet with some internal resistance from Thai security

forces. End Summary.

 

¶2. (SBU) On March 30, Prime Minister Thaksin addressed a

rare joint session of parliament. He had convoked the

special session to debate the violence-plagued far south of

Thailand. Thaksin, showing uncharacteristic humility,

admitted to policy missteps in the region, “I am now

determined to undo what I have done wrong in the past.” The

Prime Minister also backed down from his usual tough

rhetoric, agreeing with critics that a less security focused

approach was called for, “violence only breeds violence” he

said.

 

¶3. (SBU) Thaksin was also surprisingly conciliatory towards

opposition leader Aphisit Vejjajiva, saying the Democrat

Party leader’s views on the South “are mostly consistent with

my thinking.” Continuing his praise for his main political

rival Thaksin said, “I admire your presentation and accept

all your 9-point proposed approach to the southern unrest for

further implementation.” (Note: The 9-point Democrat plan

calls for the government to: 1) cancel plans to withhold

government development funding from “red zone” villages

blamed for harboring militants; 2) increase development

projects; 3) name a civilian official, vice military, to

coordinate regional government programs; 4) compensate

victims of the violence; 5) improve the southern economy; 6)

improve education in the South; 7) encourage local officials

to learn about Islamic culture; 8) allow international

organizations to access the South to help; 9) follow the

advice of the National Reconciliation Commission (NRC). End

Note.)

 

¶4. (SBU) Thaksin also reiterated his public endorsement of

the 48-member National Reconciliation Commission which, under

the leadership of Anand Panyarachun, a highly respected and

politically independent former Prime Minister, is tasked with

developing policy recommendations for the troubled south.

Thaksin said, “I would like to see it use its independent

role, offer diverse views and dimensions, and I confirm full

governmental support and readiness to respond to its

requests.”

 

¶5. (SBU) Speaking to reporters on March 31, Thaksin seemed

to indicate that troops would be “withdrawn” from the far

south as part of the government’s new strategy. He said

“adjustments are imminent.” However, the military was quick

to clarify that “adjustments” did not mean that actual troop

levels would be reduced in the south; instead troops would

have a less visible presence, or would work on civil-military

projects instead of security missions only. General Sirichai

Tunyasiri, who heads the Southern Border Provinces

Peace-building Command (SBPPC) and acts as the coordinator

for all Thai security forces in the region, said that troops

would be repositioned in the South, but “absolutely will not

be pulled out of the region.”

 

¶7. (SBU) Comment: Thaksin’s assuaging remarks in front of

both houses of Parliament are a welcome change from past

rhetoric or inflammatory off-the-cuff remarks about the

south. The Prime Minister’s apparent new policy flexibility

on the south, coupled with the appointment of the politically

independent NRC, are positive signs that the administration

may be learning from the policy failures of the last two

years. However, if he tries to move too far away from a

security-based strategy for the South, Thaksin could face

internal resistance from hard-liners within the RTG security

forces. This seems to be the implication of the rapid

clarification by the SBPPC that no troops would actually be

withdrawn from the troubled far south. End Comment.

ARVIZU

Written by thaicables

August 28, 2011 at 5:56 am

05BANGKOK2137 MEGAPROJECTS: WE KNOW WHY, NOBODY KNOWS HOW

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This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 BANGKOK 002137

 

SIPDIS

 

SENSITIVE

 

STATE FOR EAP/BCLTV AND EB

STATE PASS TO USTR FOR WEISEL AND COEN

TREASURY FOR OASIA

COMMERCE FOR 4430/EAP/MAC/OKSA

 

E.O. 12958: N/A

TAGS: ECON EFIN ETRD PREL TH

SUBJECT: MEGAPROJECTS: WE KNOW WHY, NOBODY KNOWS HOW

 

REF: BANGKOK 1266

 

1.(SBU) Summary. The economic centerpiece of Prime Minister

Thaksin’s second term is a series of major infrastructure

projects estimated to cost US$57.5 billion over five years.

It remains unclear how the RTG will finance these projects

given self-imposed fiscal constraints, previous projects that

disadvantaged private investors and an illiquid bond market.

Given the importance Thaksin attaches to these projects, we

expect he will engineer a formula to try and attract

financing without any government guarantee of repayment.

Whether he actually convinces enough investors to put their

money where the PM’s mouth is must await specifics. End

Summary.

 

“COMMITTED PROJECTS” NOT A PROBLEM

———————————-

 

2.(SBU) As reported previously (reftel), the Thaksin

government has announced plans to undertake massive

infrastructure expansion and modernization projects estimated

to cost Bt2.35 trillion (US$57.5 billion) over the next five

years. The total RTG budget for FY2005 is about Bt1.2

trillion (US$30.8 billion) and 2004 GDP was Bt6.6 trillion

(US$169.3 billion). Projects the RTG describes as “committed”

include the purchase of new aircraft by parastatal Thai

Airways, rail links to the new Bangkok international airport

and industrial development in the area around the airport,

expansion of the existing Skytrain and subway lines,

expansion of the highway system, expansion of the gas

pipeline system and low-income housing development. Projects

that are planned but “non-committed” include expansion of the

railroad network, expansion and modernization of the water

grid and development of a refinery and oil pipeline

associated with the “land bridge” project across the Thai

isthmus between the Andaman Sea and Gulf of T

hailand.

 

WHY THE SUDDEN URGE TO SPLURGE

——————————

 

3.(SBU) The RTG has several goals in pursuing these ambitious

“megaprojects.” First, is to stimulate investment as the new

driver to the Thai economy now that domestic consumption and

export growth are leveling off. The second goal is to upgrade

Thailand’s infrastructure so that the country is better able

to compete internationally. The stated intention is to reduce

the cost of logistics in Thailand to less than 10 percent of

GDP from its current level of about 19 percent (U.S. and

Japan figures are 10 and 11 percent respectively). It is also

intended to improve worker productivity by reducing the

amount of time Bangkokians spend commuting. In the aftermath

of the 1997-1998 financial crisis, little new public

infrastructure investment has been made. Finally, in keeping

with Thaksin’s self-image as Thailand’s CEO, he views the

on-going excess liquidity in the banking sector (estimated to

be Bt200-300 billion -US$5.1-7.7 billion) as an

under-utilized asset that should be mobilized.

 

FISCAL POLICY TO REMAIN CONSERVATIVE

————————————

 

4.(SBU) The RTG does not intend to pay for these projects out

of current budget expenditures or by increasing the net debt

on the government’s balance sheet. “Fiscal sustainability”

is the government’s watchword: defined, in part, as a maximum

public debt/GDP ratio of less than 50 percent (currently

about 47.9 percent – down from 52.9 percent in January 2002 –

with an RTG goal of reducing this number to 40 percent by

2009), a balanced budget and debt service comprising less

than 15 percent of the yearly RTG budget. With additional

calls on the budget ranging from increasing the salaries of

low-paid civil servants to tsunami and drought relief efforts

to expenditures related to quelling the separatist movement

in the south, there is little room in the RTG budget to

finance the megaprojects and within the defined fiscal limits

even if the economy continues to grow at 6 percent each year.

 

 

SO HOW TO PAY FOR IT ALL?

————————-

 

5.(SBU) The official capital-raising framework outlined by

the Ministry Of Finance plans for 26 percent of the required

capital to come from the government budget, 35 percent from

State-owned enterprises (SOEs) and 39 percent from “other

means such as securitisation or property development of areas

adjacent to the projects.” In fact, to bridge the apparent

gap between fiscal rectitude and an investment binge, the

Thaksin administration is studying a variety of approaches to

keep these projects off the government books. First, many of

the ‘committed’ projects will be undertaken by SOEs (Thai

Airways, Airports of Thailand, PTT) that will finance the

projects themselves either on the strength of their own

balance sheets, through asset-backed financing or by forming

joint ventures with private sector companies and/or financial

institutions. Market observers seem confident that these

established organizations can use the cash to be generated by

the projects, backed by their other substantial assets, to

secure proj

ect financing.

 

6.(SBU) For the mass transit expansion projects – extensions

of the Skytrain, subway and toll roads – the RTG would like

follow its previously successful method of granting long-term

concessions (typically 25 years) to Special Purpose Vehicles

– companies created specifically to build and operate these

concessions. Existing examples of such entities are Bangkok

Metro PCL – subways, Bangkok Expressway PCL – toll roads, and

Bangkok Mass Transit PCL – Skytrain. These companies are

typically joint ventures between leading Thai companies with

the key foreign infrastructure suppliers (e.g. Siemens,

Obiyashi) often taking an equity stake. The problem is that

the equity investors in these projects have not done well.

The RTG has limited the amounts the ventures may charge for

their services (fares and tolls) and is currently trying to

force operators of the Skytrain and subway to sell out to the

mass transit regulatory authority at what the companies

consider a low price. This history will make it very

difficult to

convince new private investors to commit to any equity

positions in the proposed projects.

 

7.(SBU) The most likely structure will be for the RTG to

create “Public-Private partnerships”, not-for-profit limited

liability companies with initial capital provided by the

government and granted a concession to built and operate a

subway line or toll road or some other potential asset. These

entities will issue bonds backed by the value of the

anticipated future cash flow from its concession. There would

be no RTG guarantee backing the debt.

 

BOND MARKET PROBLEMS

——————–

 

8.(SBU) There are several problems with this model. First,

given the inherent risk of construction delays and over-runs,

the debt will have to be very attractively priced (i.e. offer

a high yield) in order to attract investors, especially in

the absence of RTG backing. Second, if Bt2.3 trillion in new

projects actually start-up over the next five years, in a

domestic bond market which currently has severe liquidity

problems and rising interest rates, the effect on corporate

borrowing rates and crowding out effect could be severe.

There is considerable skepticism among Thai market

participants whether the domestic market has sufficient depth

to absorb this much new paper. In November 2004, the total

value of all outstanding bonds in Thailand was Bt2.74

trillion (US$70.3 billion) of which Bt2.51 trillion (US$64.4

billion) was either issued or backed by the RTG.

 

9.(SBU) Some observers posit that the RTG will provide the

necessary capital to the PPPs with no effect on the RTG net

debt level through the proceeds from IPOs of State-Owned

Enterprises EGAT (electricity) and CAT and TOT (telecom)

while also removing the government guarantee from the debt of

these entities (thereby making room for new RTG debt to be

issued under the debt/GDP cap). While this would be a start,

the total of all RTG-guaranteed SOE bonds outstanding is only

about Bt322 billion (US$8.3 billion); not enough even with

the IPO proceeds to fund everything anticipated. Others

point to the Asian Bond market initiative as a source of

funds. There is no indication, however, that ASEAN central

banks are interested in funding Thai infrastructure

development, or even having more than a nominal exposure to

Baht. This nascent effort for a pan-Asian debt market would

have to develop much more quickly than it has to date in

order to be a source of funds for the mega-projects

 

10.(SBU) COMMENT. We have spoken to money managers, bond

market senior officials, academics and RTG officials

responsible for managing government debt and designing some

of the projects. None have been able to explain how the

government will follow through on its seemingly contradictory

promises of expanding investment while reducing debt. Most

are dubious it can be done, with some arguing that the entire

exercise is designed to channel funds to Thaksin family and

cronies (septel will examine the issue of corruption in

Thailand – anecdotally it appears that large scale corruption

may be getting worse while petty corruption may have

marginally improved).

 

11.(SBU) The mega-projects are the single most important new

plank in Thaksin’s economic strategy for his second term. As

an economist who helped design the “dual track” economic

policy of Thaksin’s first term told us, “Keynesian demand-led

recovery is played out. We must move on to the next level for

the economy to continue to grow.” He continued: “In creating

economic value, Thailand is ahead of China and about ten

years behind Taiwan and Korea. We must maintain our pace to

stay ahead of fast-moving China. We can’t do that without

significant new investment in infrastructure and improving

human resources. I just don’t know how we will pay for it.”

Although many here believe the PM’s program is mostly talk

and the majority of projects won’t get off the ground, the

Prime Minister’s penchant for financial engineering means we

cannot rule out a scheme that, at least on its face, gets the

mega-projects underway. We suspect that Thaksin will be

aggressively marketing portfolio investment in Thailand to

foreigners

beginning with a planned visit to New York in June.

 

 

BOYCE

Written by thaicables

August 28, 2011 at 5:49 am

05BANGKOK1266 THAKSIN,S ECONOMIC POLICY: THE NEXT FOUR YEARS

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This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 05 BANGKOK 001266

 

SIPDIS

 

SENSITIVE

 

DEPT FOR EB AND EAP/BCLTV

TREASURY FOR OASIA

COMMERCE FOR 4430/EAP/MAC/OKSA

PACOM FOR FPA (HUSO)

STATE PASS TO USTR FOR WEISEL AND COEN

 

E.O. 12958: N/A

TAGS: ECON ETRD EFIN PREL TH

SUBJECT: THAKSIN,S ECONOMIC POLICY: THE NEXT FOUR YEARS

 

REF: A. 04 BANGKOK 6918

¶B. BANGKOK 1169

 

SENSITIVE BUT UNCLASSIFIED

 

1.(SBU) SUMMARY AND INTRODUCTION. The overwhelming victory

achieved by Prime Minister Thaksin’s Thai Rak Thai (TRT)

party in the February 6, 2005 general elections, in which TRT

won 376 of 500 parliamentary seats, offers Thaksin an

unprecedented degree of political power for a democratically

elected Thai politician. This cable is a first-take (before

a new cabinet has been named) on what economic policies the

new administration will pursue in the aftermath of TRT’s

electoral mandate. Our conclusions are:

 

– There will not be any policy surprises. Thaksin will follow

the goals he laid out in his electoral platform.

 

– These goals are to undertake catch-up infrastructure

“mega-projects” to stimulate domestic investment, continue

raising rural incomes, encourage the development and

expansion of SMEs, increase the competitiveness of Thai

industry and Thailand’s logistical ability to compete, and

conclude regional and bilateral trade agreements to gain a

market advantage for Thai producers and make Thailand a

center of Asian trade; all while slowly reducing government

debt.

 

¶2. (SBU) Thaksin, flush with victory and confident that his

first term economic polices (which his critics described as

overly populist) have been vindicated by Thailand’s economic

growth record, has the political power to push all these

programs ahead. The questions are how he chooses to spend his

political capital – since many of his programs will call for

such unpopular actions as privatization of state-owned

enterprises and other sorts of economic liberalization,

including FTAs with the U.S. and others, – and whether his

penchant for clever-but-complicated financial engineering to

fund projects off the RTG books proves sustainable. It is an

open question whether Thaksin, ever sensitive to criticism,

will husband his political capital and not undertake needed

economic liberalization if opposition proves too fierce or

there is any significant slowing in the Thai economy. END

SUMMARY AND INTRODUCTION.

 

¶3. (SBU) On February 7, immediately following TRT’s historic

sweep of 75 percent of parliamentary seats, the party

released an outline of its economic goals for the next four

years entitled “Towards economic transformation.” It begins

by identifying the previous four-year period as a time to

“repair and revive” and sets a new goal of “transformation

and restructuring of Thailand to meet the challenges of the

increasingly competitive global arena.” The document then

lays out four sub-goals; ‘assuring prosperity of the people;

enhancing the production sector’s competitiveness, building

infrastructure to enable progress and from local links to

global reach.”

 

Trickle-Down Economics, Thai Style

———————————-

 

¶4. (SBU) As has been reported (ref A), a key component of

Thaksin’s first administration was the stimulation of

domestic demand to revive the economy following the 1997-1998

economic crisis. RTG programs designed to funnel cash into

the hands of rural citizens combined with commercial bank’s

post-crisis focus on consumer credit which introduced credit

cards and other consumer finance products to many Thais for

the first time, led to a surge in demand for Thai-made

motorbikes, cars and appliances (because of the weak baht and

tariff barriers, imported goods at the lower-end of the

market are not competitive with domestic producers). This

recovery of domestic demand with a revival of export markets

helped Thai manufacturers utilize the enormous capacity they

had added in investment boom of the 1990s. The RTG focus on

domestic demand, combined with continued efforts to increase

exports, was the heart of Thaksin’s first term economic

approach – the so-called “dual-track strategy”.

 

¶5. (SBU) Under the rubric “assuring the prosperity of the

people”, Thaksin has identified “strengthening the

grass-roots economy” as a continued focus during his coming

term. This is defined largely as programs to “empower local

communities to better manage their own finances” together

with “removing barriers” and “unlocking the great potentials

that flow from(grassroots knowledge, creativity and skills.”

Most of our interlocutors argue that the economic development

aspect of Thaksin’s rural programs have actually done little

but provide a quick boost to rural consumption and

confidence. A program which provided each village a Bt1

million revolving loan to invest as they pleased, for

example, was largely used to fund consumption rather than

investment. Aggressive lending by special purpose government

banks (the Government Savings Bank and Bank for Agriculture

and Agricultural Cooperatives) also served largely to finance

the many new one-ton pickup trucks and color TVs that are

seen in the countryside. Consi

derable anecdotal evidence indicates that when these loans

came due, the borrowers reverted to traditional village money

lenders (who charge usurious rates) to pay off the official

loans that were typically collateralized by houses and

farmland. The RTG can be expected to continue to encourage

programs to lend to rural sectors and keep the

credit/consumption cycle flowing.

 

¶6. (SBU) These programs and such others as “One Village One

Product” handicraft development plan are marketed by the RTG

as empowerment and development programs. However, many

observers believe they are actually more akin to an income

redistribution policy. With 60 percent of all Thais still

living in villages and no other government social safety net,

these programs are both politically expedient and have been

an effective way to “prime the pump” economically while

calling it “rural empowerment” rather than rural welfare.

Although these programs will continue over the next four

years, they are not the centerpiece of the Thaksin economic

strategy going forward. With pent-up consumer demand largely

satisfied and consumer indebtedness at record heights, Thai

economic policy is to look elsewhere for future economic

drivers.

 

Enhancing Competitiveness Through FTAs

————————————–

 

¶7. (SBU) In order to assure a continuing surplus available

for redistribution, and to generate the growth in GDP that

Thaksin views as the bottom-line measure of his success, the

new Thaksin administration has said “the private sector needs

to focus on restructuring to compete effectively in the

globalized marketplace.” What this restructuring and reform

are supposed to look like is not identified, perhaps because

it is widely accepted that Thai industry needs to end such

practices as rent-seeking behavior, poor corporate governance

and a failure to upgrade labor and management skills that are

below those of Thailand’s competitors – all problems

attributable in large measure to long-standing protection

from foreign competition for many industry sectors.

 

¶8. (SBU) Key RTG policy-makers have identified FTAs as a

means to force the private sector to reform by removing trade

barriers, thereby exposing Thai companies to global

competition in their home market. Officially, Thaksin views

FTAs as part of a “global reach” strategy designed to open

doors to the “unique” qualities of Thai goods and services

and place Thailand at the center of a web of bilateral and

regional trade agreements. While these stated goals make

sense, we believe the greatest benefits to a comprehensive

FTA with a country like the US would be in the positive

effects on the Thai economy from liberalization; a view

espoused by at least one senior advisor to the Prime

Minister. The political difficulty of carrying forward such

liberalization, even under the cover of an FTA (“the

Americans made us drop your protection”), was evidenced by

the hiatus on bilateral FTA talks with the US in the run-up

to the Thai elections – primarily out of concern that the FTA

could be used by the opposition to bludgeon the government.

We are not sure if Thaksin and his government will be able to

muster and sustain the political will to successfully

conclude comprehensive FTAs with Thailand’s major trading

partners. We are certain, however, that in the absence of

such an external influence, real reform in the private sector

will not occur – a view shared by most Thais.

¶9. (SBU) An indication of the seriousness with which Thaksin

is taking his new economic agenda (and perhaps indicative of

the difficulty he anticipates in its implementation) is the

mooted elevation of Finance Minister Somkid to Deputy Prime

Minister responsible for economic affairs. Somkid is the

Prime Minister’s key economic advisor and one purpose of

giving him effective strategic control over all aspects of

the Thai economy would be to ensure that implementing

agencies carry out the administration’s strategic vision and

that necessary decisions are made quickly. This was related

to Ambassador Boyce during a February 13 meeting with Thaksin

at which it was suggested that Somkid would play an important

role in the FTA talks with the U.S. (ref B).

 

¶10. (SBU) Another difficult area we expect Somkid to manage

is the privatization of state-owned enterprises (SOEs).

During his first term, Thaksin failed in his attempt to sell

shares in the government electricity company EGAT following

strong opposition from the company’s labor unions and NGO

groups which argued that the exercise was simply a way for

company management, TRT officials and other insiders to make

a quick buck from the floating of shares – as they argue

occurred in the partial privatization (corporatization) of

Thai Airways and oil giant PTT. The government has pledged to

again try to privatize EGAT (and perhaps some of the other

60-70 SOEs) through a process that begins with a relatively

small (20 percent of total equity) floatation on the Bangkok

stock exchange, leaving the RTG as majority owner. The

Thaksin privatization goals are to eventually remove the

government’s contingent liabilities associated with SOEs, to

encourage greater competition in the business sectors in

which the SOEs operate and promote sound business practices

in these companies.

 

¶11. (SBU) The emphasis Thaksin puts on markets is somewhat

belied by the continuing subsides the RTG provides to

consumers for diesel fuel and electricity prices. The diesel

subsidy is expected to start phasing out as of March 2005

(although there is talk of waiting until May so that the

economic impact of the tsunami dissipates first). There is no

indication, however, that electricity prices will be unfrozen

and the subsidy to make up the cost differential to EGAT will

change. We believe that Thaksin and his advisors continue to

wrestle with the issue of ensuring Thai businesses have

low-cost basic inputs in order to be competitive with their

regional competitors while realizing that such subsides

distort company business decisions. We believe that during

the second Thaksin term, subsidies will very slowly be phased

out with the RTG stepping back in to prevent any price

spikes.

 

Infrastructure

—————

 

¶12. (SBU) The government has announced a series of

“mega-projects”, primarily to upgrade Thailand’s transport

infrastructure. The RTG estimates that its companies pay 20

percent more than regional competitors for logistics and

transportation due to inefficient and antiquated

infrastructure. It is true that since the late 1990s

economic crisis, few new infrastructure projects have been

started due to the need for fiscal rectitude and, as a

result, Thailand needs to play catch-up with much of its

infrastructure. We believe, however, that the government’s

primary purpose for the US$20-26 billion that it plans to

spend on such projects is the need to create a new driver to

Thailand’s economic expansion – investment -to replace the

now largely played-out consumer consumption driver.

 

¶13. (SBU) Some observers are concerned that the RTG will fund

these projects through increased government spending and

additional debt issuance. While there is little doubt that

there will be some increased government spending and new

RTG-backed debt associated with these projects, we believe

that Thaksin feels strongly that government spending should

not significantly exceed its current rate of about 16.8

percent of GDP and overall government debt should slowly

decline. The Finance Ministry has announced that public debt

will not exceed 50 percent of GDP (currently around 48

percent) and the government debt/service ratio will stay

below 15 percent of GDP. Thaksin views monetary and fiscal

stability as prerequisites to business confidence and

progress on these metrics as a sort of report card on how

well his administration is proceeding on the economic front

in general. Besides, he believes there is another, more

effective, way to finance his ambitious plans.

 

¶14. (SBU) There is no shortage of capital in Thailand. Banks

remain flush with more than Bt200 billion in unloaned funds

even though real interest rates on deposits are negative and

commercial bank lending rose 6.8 percent in 2004. The RTG is

seeking to mobilize this capital to fund infrastructure and

upgrade private sector capacity and efficiency. The buzzwords

to accomplish this are “public-private partnerships” and,

“Special Purpose Vehicles” (SPVs). An example being mooted of

how this might work for an extension of the Bangkok subway

system is the creation of an SPV to which the RTG would cede

control on government-owned land under which the subway would

be routed. The SPV would develop the property above ground

and finance the digging of subway tunnels below. In return

for the land, the RTG would own a minority share of the SPV.

The SPV would issue bonds – not backed by an RTG guarantee

-to finance the real estate development projects and subway

construction with interest and principle repayments financed

by the rent and eventual sale of the office and/or commercial

sites developed and rent on the tunnels paid by the subway

operator. A second SPV would run the subway with the

purchase of rails and rolling stock financed by a second

issuance of non-guaranteed bonds to be repaid from subway

fares and underground real estate development. A major

purchaser of the bonds would probably be government pension

and social security funds (the social security fund currently

has Bt268 billion – US$6.7 billion, in assets). In one blow

infrastructure is developed and Thai savings mobilized all at

no change or risk to the government balance sheet. Should

anything go wrong, however, and pensions put at risk from

non-performing SPV bonds, the RTG would have a major problem.

There is also the question of how much real estate would need

to be developed to finance the subway and whether this

supply-led building boom would negatively influence the

Bangkok real estate market.

 

¶15. (SBU) In addition to the physical infrastructure to be

developed, the government recognizes that for industry to be

more competitive the intellectual and job skills of Thai

workers must be enhanced. Thai schools are widely seen as

poorly funded and teachers badly trained with most teaching

by rote. The individual Thaksin names as new Education

minister will indicate the seriousness of the new

administration in tackling this matter. Thaksin is also keen

to increase the amount Thai companies spend on research and

development, currently only 0.13 percent of GDP (Malaysia-a

country Thaksin views as a key competitor-spends at rate

about five times greater).

 

¶16. (SBU) COMMENT. The Prime Minister has a clear vision

for Thailand’s economy and usually takes decisive actions

towards its realization. The risk that he, and the country,

run is that sometimes his decisions are not well thought-out

and may result in short-term gains and long-term costs. An

example; Thai commercial banks have become quite conservative

lenders following their climb back from the 1997 crisis.

Seeing a lack of lending to stimulate the economy, Thaksin

ordered state-owned Krung Thai bank to be more aggressive in

making loans. The bank did so, increasing its loan portfolio

at a rate more than double that of its nearest competitor.

Unfortunately, the quality of some of the larger loans was

poor and Krung Thai has been forced to make major asset

write-downs and some of its top executives are being indicted

for corruption and malfeasance. Other quickly and poorly

executed plans, such as the agreement with China for free

trade in certain agricultural goods, was based more on vision

without sufficient attention to details.

 

¶17. (SBU) We know the direction Thaksin wants to take the

economy during his second term. We do not know if he has

learned the need for better preparation and better guidance

for the implementing bureaucrats. We also must wait and see

if Thaksin’s stated vision of a reformed business sector is

something he is willing to aggressively fight for, e.g.

taking on entrenched local elites who are likely to oppose a

comprehensive FTA with the U.S. The structure of his new

cabinet should be the first clue in answering these

questions.

BOYCE

Written by thaicables

August 26, 2011 at 5:28 am

09BANGKOK3188 THAI-CAMBODIAN SPAT: THAKSIN RETURNS TO CAMBODIA TO TAKE CREDIT FOR PARDON OF THAI, LATEST ILLEGAL LOGGING INCIDENT

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“240310”,”12/17/2009 9:54″,”09BANGKOK3188″,

“Embassy Bangkok”,”CONFIDENTIAL”,””,

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RUEHBY/AMEMBASSY CANBERRA IMMEDIATE 0256

RHMFISS/CJCS WASHINGTON DC IMMEDIATE

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RUEAIIA/CIA WASHINGTON DC IMMEDIATE

RHEHNSC/NSC WASHINGTON DC IMMEDIATE”,”C O N F I D E N T I A L SECTION 01 OF 03 BANGKOK 003188

 

SIPDIS

 

E.O. 12958: DECL: 12/17/2019

TAGS: PREL, PGOV, PBTS, TH, CB

SUBJECT: THAI-CAMBODIAN SPAT: THAKSIN RETURNS TO CAMBODIA

TO TAKE CREDIT FOR PARDON OF THAI, LATEST ILLEGAL LOGGING

INCIDENT

 

Classified By: Acting Deputy Chief of Mission Robert D. Griffiths, reas

ons 1.4 (b) and (d).

 

1. (C) Summary: Former Thai Prime Minister Thaksin Shinawatra

December 13 returned to Phnom Penh to take credit for the

by-all-accounts orchestrated release of Siwarak Chutipong, a

Thai engineer who had been imprisoned for reportedly sharing

flight details for Thaksin\’s November visit to Cambodia with

the Thai Embassy. Major General (ret.) Sornchai Montriwat, a

close associate of opposition party leader Chavalit

Yongchaiyudh, confirmed to us that public speculation was

correct that the pardon of Siwarak was a continuation of the

closely managed effort by Cambodian Prime Minister Hun Sen

and Thaksin to pressure the government of Prime Minister

Abhisit Vejjajiva. Contacts have recently indicated to us

that the Thai-Cambodian relationship is not as strained as it

appears publicly, yet a December 16 public statement by

government spokesperson Panitan Wattanayakorn clearly

illustrates that much will need be done before relations

return to normal. Panitan called on Cambodia to cease

interference in the Thai judicial system and in Thai politics

and to annul Thaksin\’s appointment as economic advisor to

Phnom Penh. While the two governments continue to quarrel,

the latest of three armed clashes involving Cambodians

illegally logging in Thailand took place, leaving one dead.

End Summary.

 

2. (C) Comment: Nearly all Thai officials and pundits we have

talked to recently say that Thaksin\’s Cambodia gambit is an

extension of Thai domestic politics. Though Thaksin\’s image

within Thailand likely risks being tarnished if his visits

leave him appearing too closely aligned with Cambodia, the

former Prime Minister\’s visits serve his apparent goal of

socializing Thai audiences to the idea of his presence in a

neighboring country. In addition, the visits also appear to

be part of a strategy to pressure Prime Minister Abhisit at a

time when the Thai Supreme Court for Political Office Holders

is expected to rule soon on the fate of 76 billion baht of

assets seized from Thaksin by the Assets Examination

Committee due to accusations that Thaksin illegally enriched

himself while Prime Minister. End comment.

 

THAKSIN RETURNS TO CAMBODIA AS PART OF A MANAGED DRAMA

——————————————— ———

 

3. (U) Fugitive former Prime Minister Thaksin Shinawatra

returned December 13 to Cambodia to visit Siwarak Chutipong,

a Thai national who had been sentenced to seven years in

prison following his November 12 arrest for reportedly

leaking information about Thaksin\’s flight schedule during a

November visit to Cambodia, and to resume duties as an

economic advisor to Cambodian Prime Minister Hun Sen.

Siwarak had been sentenced December 8 to seven years in

prison by Phnom Penh Municipal Court but received a royal

pardon December 11. Siwarak had been working as engineer for

the Cambodian Air Traffic Services prior to his arrest.

 

SIWARAK A VICTIM OF POLITICS, NOT INTERNATIONAL ESPIONAGE

——————————————— ————

 

4. (C) Siwarak\’s case has been widely viewed by the Thai

media and our contacts as a continuation of the Thai

political divide that pits Thaksin and his red-shirt

supporters against the Democrat-led government. Siwarak

worked for a company controlled by Thai businessman Samart, a

long-time competitor to Thaksin\’s A.I.S. and currently one of

the key financial backers of Phumjai Thai defacto leader

Newin Chidchob, who defected from the pro-Thaksin camp in

December 2008.

 

5. (C) MGEN Sornchai Montriwat, a Puea Thai MP and close

advisor to Puea Thai Party leader General Chavalit

Yongchaiyudh, told us during a December 9 meeting that he had

not slept the night before due to the case. A bleary-eyed

Sornchai said he had fielded calls from Hun Sen, Cambodian

Defense Minister Tea Banh, and Siwarak\’s mother as

discussions proceeded on how to script the pardon. According

to Sornchai, Hun Sen and Tea Banh wanted Chavalit to file the

pardon request immediately after the Cambodian court had

sentenced the Thai defendant. Sornchai reluctantly woke

 

BANGKOK 00003188 002 OF 003

 

Chavalit up in the middle of the night, after telling Hun Sen

and Tea Banh that he could not make commitments himself.

Sornchai, who had been negotiating as the point man between

Hun Sen and Chavalit, told us that Chavalit had not wanted

his name at the top of the pardon petition signature list.

In the end, Hun Sen credited Thaksin for the pardon;

according to December 14 press reports.

 

6. (C) Sornchai told us December 16 that he had led the Puea

Thai team of MPs to Phnom Penh December 14 to bring Siwarak

back to Thailand and that the group had met with Hun Sen for

one hour. Regarding the incident which led to accusations of

spying by Siwarak, a conviction, and then a pardon, Sornchai

told us Hun Sen had said that the event had been a

coincidence and the Thai air traffic controller was unlucky.

Sornchai\’s account of Hun Sen\’s assessment that the Siwarak

incident was ancillary to Thai-Cambodian relations was backed

up publicly December 14 by Thani Thongphakdi, the Thai MFA\’s

Deputy Spokesperson, who said that the RTG welcomed the

release of Siwarak, but that this act would not necessarily

lead to a restoration of full diplomatic ties.

 

RELATIONS REMAIN OFF TRACK

————————–

 

7. (U) Despite the recent worsening of bilateral relations,

signs point to halting attempts to improve relations. Thai

Government Spokesperson Panitan Wattanayakorn said publicly

December 16 that the Cambodian government had expressed its

intention to repair bilateral relations via the return of

Ambassadors to the two capitals. Panitan cautioned that the

first steps to restoring normal diplomatic relations must be

taken by Cambodia, as Phnom Penh would need to stop

interfering with the Thai judicial system, cease meddling in

Thai domestic politics, and revoke the appointment of Thaksin

as an economic advisor to the Cambodian government. Panitan

did suggest that the two sides may return the First

Secretaries of their respective Embassies, who had been

expelled after the Siwarak arrest, as a first step in

normalizing relations. In contrast to the Thai government\’s

strident reaction to Thaksin\’s November visit to Cambodia,

Panitan December 13 downplayed the effect of Thaksin\’s second

visit. Panitan said the RTG considered the trip a matter

between Thaksin and Cambodia.

 

8. (U) Later December 16, Hun Sen was quoted publicly as

saying that frayed relations with Thailand could not be

normalized while the Abhisit government was in power, and he

blamed the troubled relations on the conflict over disputed

territory near the Preah Vihear temple. Hun Sen reportedly

said that a new government in Thailand was necessary before

the Thais would be willing to send an Ambassador back to

Phnom Penh.

 

9. (C) While relations between Thailand and Cambodia are

strained; contacts have suggested to us recently that the

state of affairs is not as serious as described in the media.

Thai National Intelligence Agency XXXXXXXXXXXXXXXXXX

XXXXX told us in late November that it was his personal

view that the ongoing Thai-Cambodian confrontation was all

about Thai domestic politics. Hun Sen had placed a bet on

one side in the ongoing Thai domestic political conflict,

XXXXX said, but Hun Sen would eventually make a deal with

whoever was in power in Bangkok in order to protect his own

interests. XXXXX predicted that Hun Sen would ultimately

lose his bet because Thaksin would not be coming back.

 

LATEST LOGGING CLASH LEAVES ONE DEAD

————————————

 

10. (C) An unpublicized December 6 incident that involved

rangers (taharn praan), police, and forestry officials on the

Thai side, and Cambodian loggers and possibly some

moonlighting Cambodian police or soldiers on the Cambodian

side, resulted in the death of one Cambodian on the way to

the hospital. XXXXXXXXXXXXXXXXXXX passed us an

after-incident report, complete with pictures of Thai

security officials\’ confrontation with Cambodians conducting

illegal logging along the border in the vicinity of the

Kantharalak District of Sri Sa Ket Province. XXXXX told us

 

BANGKOK 00003188 003 OF 003

 

that Cambodian soldiers were protecting the loggers when

shots were exchanged between the two sides, resulting in the

death of one of the loggers, who suffered from shotgun and

grenade wounds. Patches confiscated from the Cambodians

involved suggested involvement by security personnel, who

were presumably moonlighting in this other role. A saw

machine, 14 processed logs, and carts were also seized. The

logger\’s body was repatriated December 7.

 

11. (C) This armed conflict involving illegal logging inside

Thailand by Cambodians was the third such incident which has

come to our attention in recent months. A September 11 clash

between Thai security officials and Cambodian loggers on the

Thai side of the border resulted in the death of one

Cambodian. Some Cambodian NGOs and media alleged that that

the logger had been burned alive by Thai forces, but the

initial reports had the location of the incident in the wrong

province, and we could not find any corroborating evidence to

substantiate Cambodian allegations. XXXXXXXX told us that

he had been able to confirm that the Cambodian had been shot

to death during a confrontation with Thai taharn praan, but

not burned alive.

 

12. (C) We were able to confirm XXXXX account separately

with XXXXX, the XXXXXX of the XXXXXXXXXXXXXXXX

XXXXXX, who is likely the province\’s XXXXXX human rights

advocate. XXXX had taken three trips to the border to

inquire about this case, and a clear picture had emerged that

no one had been burned. According to XXXXX, both Thai and

Cambodian contacts reported that an illegal logger had been

killed on the Thai side of the border, and Cambodian contacts

were sure the perpetrators had been dressed in the black

outfits of the Thai rangers.

 

13. (C) XXXXX stressed to us that while Thai police and

military sources admitted the killing took place, they

adamantly denied anyone was burned either before or after the

fact. Such an act would trigger retaliation and no one

wanted to see that. Killing illegal loggers was one thing,

XXXXX suggested, but burning someone would constitute an

unimaginable act of barbarism. Separately, the regional

Internal Security Operations Command reluctantly confirmed to

us that a Cambodian had been killed, but stressed that there

had been no burning involved in the incident.

JOHN

Written by thaicables

July 22, 2011 at 9:32 am

09BANGKOK2902 REDS AND YELLOWS SET TO CONGREGATE (SEPARATELY) THIS WEEKEND

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“234558”,”11/13/2009 11:06″,”09BANGKOK2902″,

“Embassy Bangkok”,”CONFIDENTIAL”,

“09BANGKOK2405|09BANGKOK2746|09BANGKOK2855|

09BANGKOK2875|09BANGKOK2887”,

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RHEHNSC/NSC WASHDC PRIORITY”,”C O N F I D E N T I A L SECTION 01 OF 02 BANGKOK 002902

 

SIPDIS

 

STATE FOR EAP/MLS, NSC FOR WALTON

 

E.O. 12958: DECL: 11/13/2019

TAGS: PREL, PGOV, TH

SUBJECT: THAILAND: REDS AND YELLOWS SET TO CONGREGATE

(SEPARATELY) THIS WEEKEND

 

REF: A. BANGKOK 2887 (THAKSIN EXTRADTION REJECTED)

B. BANGKOK 2855 (COLOR ME GREEN)

C. BANGKOK 2875 (THAKSIN PUTS HIS FOOT IN HIS MOUTH)

D. BANGKOK 2746 (THAKSIN MOVES PROMISE TURBULENT

NOVEMBER)

E. BANGKOK 2405 (BRAWL NEAR BORDER)

 

BANGKOK 00002902 001.2 OF 002

 

Classified By: POL Counselor George Kent, REASON 1.4 (B) AND (D)

 

1. (U) SUMMARY: The upcoming weekend will see red and yellow

political rallies, though on different days and different

parts of the country. On Saturday, November 14, the United

Front for Democracy Against Dictatorship (UDD), aka

\”red-shirts,\” will hold a fundraising concert in Khao Yai

National Park, two hours outside of Bangkok. On Sunday,

November 15 the yellow-shirted People\’s Alliance for

Democracy (PAD) plans to hold a demonstration in downtown

Bangkok protesting recent moves by fugitive former Prime

Minister Thaksin Shinawatra (REFS A and C). The rally will

be PAD\’s first major public event since its Bangkok airport

sieges ended December 2, 2008; over 10,000 \”yellow-shirt\”

supporters are expected to attend. The PAD shifted the date

of its rally from Saturday to Sunday so that it would not run

concurrently with the red-shirt gathering; the PAD also

shifted locations in Bangkok because the military is running

a practice session for the December 2 King\’s birthday parade.

The RTG announced that it would not invoke the Internal

Security Act (ISA) for either gathering; all indications are

that both rallies will be peaceful affairs.

 

2. (C) COMMENT: This weekend,s twin red and yellow events

both seem poised to unfold without incident, which is welcome

news after a turbulent week; we have used meetings with

national red and yellow leaders in the past two weeks to

underscore the need to stick to peaceful measures as they

express their political views. With the diplomatic spat with

Cambodia over fugitive former PM Thaksin\’s visit dominating

headlines and PM Abhisit in Singapore for the APEC and

US-ASEAN Leaders\’ Meetings, the rallies have not attracted as

much attention as they otherwise might have. End Summary and

Comment

 

REDS HEAD TO THE HILLS, FOR ONE DAY, EYE ON LATE NOV.

———————————— —————-

 

3. (C) The UDD have directed supporters to converge on Khao

Yai National Park on November 14. Located two hours from

Bangkok in Nakhon Ratchasima Province, Khao Yai is the

gateway to Thaksin\’s traditional stronghold in the northeast.

Red-shirt leader Vira Musikapong told us the gathering would

be a concert and fund-raiser with an eye on bringing in

funding for the next big UDD protest (note: in early November

call-ins to red rallies, Thaksin urged supporters to hold

more sustained rallies in greater numbers. See ref D).

 

4. (C) When Vira suggested to us that next full fledged

red-shirt rally was likely to begin November 28 or 29 and

span three-five days, we asked how such a prolonged rally

would affect the King\’s birthday celebration, which begins

December 2 with the annual parade in which the military

renews its oath of allegiance to King Bhumibol, in the same

public space that red-shirts usually use for Bangkok rallies.

Vira conceded the UDD was aware of the potential conflict,

impishly acknowledged some red-shirts would relish the

opportunity to \”bash\” the military, but said leaders would

hold a meeting on November 20 to determine the best strategy

to reconcile UDD plans with the King,s birthday. We urged

Vira to ensure that the red-shirts stick to peaceful means to

express their opposition to the government and avoid the

escalation of street action which culminated in the red riots

of April in Pattaya and Bangkok.

 

PAD TO GATHER FOR FIRST TIME IN ALMOST A YEAR

———————————————

 

5. (C) The PAD on November 10 announced it would gather

supporters on Sunday, November 15 for the group\’s first

national rally since December 2008; the national PAD

leadership did not sanction the Preah Vihear border adventure

 

BANGKOK 00002902 002.2 OF 002

 

on September 19 (REF A). PAD coordinator and Secretary

General of the New Politics Party Suriyasai Katasila publicly

stated the purpose of the rally to be held at Sanam Luang

would be to protest Thaksin and Cambodian Prime Minister Hun

Sen (REFS B, C). The Manager newspaper quoted Suriyasai

saying that 100,000 people would attend the gathering;

privately, however, he told us November 11 that he expected

between 30,000 and 50,000 people would show up. (note: the

police are predicting 10,000).

 

6. (C) The PAD movement is in transition to forming a new

political party to promote its core ideas within the formal

parliamentary system, as Suriyasai detailed to us November 4

(ref B). At the time, Suriyasai delineated the focus of the

two vehicles in this way: the PAD would retain a focus on

countering Thaksin\’s influence, while the New Politics Party

would focus on reforming the political system and increasing

transparency from within (note: there is currently complete

overlap between the leadership of the PAD and the NPP).

 

ISA: DOUBLE STANDARDS, OR DIFFERING INTENT?

——————————————-

 

7. (U) Deputy Prime Minister for security Suthep Thuagsuban

on November 12 announced that the ISA would not be invoked

for the PAD rally, which is not directed against the Thai

government but against Thaksin and Hun Sen. Likewise there

were no indications that the government planned to have

security forces in any state of visible readiness for the PAD

demonstration. Red-shirt netizens lit up the Internet in

both Thai and English after hearing the news, accusing the

RTG of employing a double-standard, given the seemingly

automatic imposition of ISA for UDD rallies in the post

Songkhran riot period.

 

8. (C) RTG contacts, including Deputy Secretary General Isra

Sunthornvut, readily admitted in private conversations that

the RTG employed double standards for crowd control. That

said, rally intent is a key factor; at this point, red-shirts

are calling for the current government to fall, yellow shirts

not. Isra told us that while the PAD and the RTG did not see

eye to eye on everything–as evidenced by the fact that the

PAD felt compelled to create its own political vehicle–in

general they shared similar perspectives on many core issues.

JOHN

Written by thaicables

July 22, 2011 at 9:26 am