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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

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

09BANGKOK2887 THAI-CAMBODIAN SPAT: EXTRADITION REQUEST REJECTED, THAI GOVT MULLS OPTIONS AS THAKSIN LECTURES IN CAMBODIA

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“234302”,”11/12/2009 10:39″,”09BANGKOK2887″,

“Embassy Bangkok”,”CONFIDENTIAL”,

“09BANGKOK1822|09BANGKOK2849|09PHNOMPENH832”,

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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 002887

 

SIPDIS

 

E.O. 12958: DECL: 11/12/2019

TAGS: PREL, PGOV, PBTS, TH, CB

SUBJECT: THAI-CAMBODIAN SPAT: EXTRADITION REQUEST REJECTED,

THAI GOVT MULLS OPTIONS AS THAKSIN LECTURES IN CAMBODIA

 

REF: A. BANGKOK 2849

B. BANGKOK 1822

C. PHNOM PENH 832

 

Classified By: Deputy Chief of Mission James F. Entwistle, reasons 1.4

(b) and (d)

 

1. (C) Summary: Fugitive former Thai Prime Minister Thaksin

Shinawatra reportedly criticized the current Abhisit

administration for encouraging false patriotism during a

November 12 address in Phnom Penh to Cambodian business

leaders and government officials in his role economic advisor

to Hun Sen. Thaksin\’s address came one day after the Royal

Thai Government (RTG)\’s extradition request of Thaksin was

rebuffed by Cambodia. In response to Phnom Penh\’s actions,

the RTG began a review of bilateral cooperation that will

apparently put in jeopardy soft loans and financial

assistance to Cambodia. The Thai media continued its strong

support for the government\’s actions, with some criticism

directed at what has been termed selfish behavior on the part

of Thaksin. End Summary.

 

2. (C) Comment: It should come as no surprise that Thaksin

did more than deliver an economics lecture in Phnom Penh,

using the neighborly venue to attack the RTG just as many

Thai expected he would; his trip was never primarily about

providing economic advise to Cambodia, but was intended to

increase pressure on Abhisit\’s government and set a precedent

of open travel to a neighboring country. The Thai government

appears committed to trying to utilize diplomatic measures to

maintain pressure on Hun Sen and to leverage Thai public

backing for its actions so far into more solid support,

without escalating the spat further into the economic or

security spheres. We are encouraged that the strains between

Abhisit and Hun Sen have apparently not resulted in border

tensions, as it appears the two militaries are actively

finding avenues to promote coordination and understanding.

The next act to this drama likely will come on the ground in

Thailand in the coming weeks, as Thaksin has promised to ramp

up red-shirt protests against the Abhisit government. End

comment.

 

THAKSIN GIVES SPEECH AFTER EXTRADITION REQUEST REJECTED

——————————————— ———-

 

3. (U) As expected, the Cambodia government November 11

rejected a Thai request for the extradition of former Prime

Minister Thaksin Shinawatra as soon as it was delivered.

According to Thai media reports and a copy of Phnom Penh\’s

response which was printed in Thai-daily The Nation, Cambodia

rejected the request because Thaksin had been appointed as an

economic advisor to Hun Sen, since Cambodia considered the

prosecution of Thaksin to be politically motivated, and

because Thaksin had been the victim of the 2006 coup.

 

4. (U) As planned, Thaksin November 12 addressed members of

the Cambodian business community and government, according to

press reports. Thai media reported that at least one Puea

Thai member of parliament attended the speech. AFP reported

that Thaksin told the gathering that those in the Thai

government who did not share his vision were promoting false

patriotism; Thai media reported Thaksin suggesting that the

RTG should promote partnership between the two countries,

rather than misleading the Thai people to hate Cambodia.

 

RTG REVIEWS ASSISTANCE PROJECTS

——————————-

 

5. (U) The Thai government has initiated a review of

Thai-Cambodian projects in response to Cambodian rejection of

the extradition request. An executive session of the

National Security Council led by PM Abhisit met November 12

to review potential actions in regard to Cambodia. Speaking

publicly after the meeting, Abhisit said the government

sought peaceful measures in solving the conflict and asserted

that the conflict would not be brought to ASEAN\’s attention.

Deputy Finance Minister Pruttichai Damrongrat said Abhisit

had at the meeting ordered the Finance Ministry to review a

soft loan to Cambodia worth approximately $31 million for

constructing a road from Surin Province through Cambodia

(Note: Thailand recently completed a long road project in

 

BANGKOK 00002887 002 OF 003

 

Cambodia initiated by the Thaksin government but finished by

recent administrations. End note). In addition, Deputy

Prime Minister Suthep Thaugsuban said the Cabinet would not

consider a prior proposal to provide Cambodia with $1 million

in financial assistance.

 

6. (C) Ambassador Surapong Jayanama, Advisor to the Foreign

Minister and an influential actor in the formulation of

policy on Cambodia, told us November 12 that the most

immediate objective for the RTG would be to mitigate threats

brought about by actions of Thaksin and Hun Sen. Surapong

characterized the recall of the Thai Ambassador to Phnom Penh

and other Thai actions so far as normal diplomatic reactions.

Going forward, Thailand would need to take a firm stand

towards Cambodia and further Thai measures would depend upon

Hun Sen\’s actions, Surapong said. That said, all options

remained at the discretion of the government, Surapong said,

but the RTG would implement actions incrementally and

proportionately to show the international community that

Thailand was not the instigator of the current tensions and

that Thailand would pursue foreign policy, especially towards

neighboring countries, with prudence and reason.

 

WORKING TO BUILD MORE DURABLE PUBLIC SUPPORT

——————————————–

 

7. (C) Admitting that the current conflict was an opportunity

for the Abhisit administration, Surapong said the task for

the government would be to transform positive public opinion

over the incident as quickly as possible into more permanent

public support for the Abhisit government. Surapong said

that Thaksin\’s planned departure from Cambodia November 13

would not bring about a rapid improvement in relations.

Rather, ties would stabilize at their present state pending

Cambodian actions.

 

OPPOSITION MPS AND RED SHIRTS TO CAMBODIA

—————————————–

 

8. (C) While the Thai press reported November 12 that one

hundred Puea Thai MPs would travel to Cambodia to meet with

Thaksin, Puea Thai MP Pracha Prasopdi, a coordinator of the

visit, told us that only ten or so MPs would travel to

Cambodia November 13 after the close of the current

Senate-House joint session. According to Pracha, the trip

was still being planned, and it was unclear when or where the

MPs would be able to meet with Thaksin, since he was being

provided tight security by the Cambodian government. A Thai

official at the Aranyaprathet border crossing told us

November 12 that approximately thirty or so red-shirt

supporters had crossed into Cambodia this morning.

 

MEDIA CRITICAL OF THAKSIN

————————-

 

9. (U) Continuing the generally solid media support for

Abhisit\’s actions so far, editorials in a range of Thai

dailies November 12 strongly criticized Thaksin and Hun Sen.

An editorial in the Thai Rath, the most read Thai-language

newspaper, called on Thaksin to not collude with foreign

countries for his own benefit, but also cautioned Abhisit to

not use the conflict to gain popular support at the expense

Thai interest. The Daily News, the second most read Thai

daily, asserted that Thaksin\’s moves reflected selfish

behavior, as the former Prime Minister appeared to want to

raise tensions because the Thai Supreme Court was likely to

rule in December on whether to permanently seize 76 billion

baht from Thaksin.

 

NEW GROUP STAGES PROTESTS AT CAMBODIAN EMBASSY

——————————————— –

 

10. (U) Underscoring the fluid nature of Thai domestic

politics and the affect the conflict appears to have on Thai

public opinion, approximately one hundred members of a

previously unknown group by the name of Rak Chart (Love the

Nation) conducted a peaceful demonstration November 12 at the

Cambodian Embassy in Bangkok. The group called for Cambodia

to stop interfering in the internal affairs of Thailand; it

peacefully dispersed by mid-morning.

 

BANGKOK 00002887 003 OF 003

 

THAI-CAMBODIAN SPORTS DAY AT THE BORDER

—————————————

 

11. (U) In an attempt to promote coordination and prevent a

border conflict, Thai Army Commander General Anupong Paojinda

made use of the Thai military\’s traditional sports day on

Thursdays by ordering the Thai 2nd Army to sponsor a

Thai-Cambodian sports day for troops on both sides of the

border stationed near the Preah Vihear temple, according to

the Bangkok Post. Thai and Cambodian troops reportedly would

engage in a range of activities including volleyball and

tug-of-war in order to ease tensions.

JOHN

Written by thaicables

July 22, 2011 at 9:25 am

09BANGKOK2867 THAI-CAMBODIAN SPAT: THAKSIN REPORTEDLY TO VISIT TO PHNOM PENH THIS WEEK

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“233813”,”11/9/2009 10:40″,”09BANGKOK2867″,

“Embassy Bangkok”,”CONFIDENTIAL”,

“09BANGKOK1822|09BANGKOK2849″,”VZCZCXRO3074

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INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE

RUEHKO/AMEMBASSY TOKYO IMMEDIATE 2078

RUEHBJ/AMEMBASSY BEIJING IMMEDIATE 7667

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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 002867

 

SIPDIS

 

STATE FOR EAP/MLS, P; NSC FOR BADER

 

E.O. 12958: DECL: 11/09/2019

TAGS: PREL, PGOV, PBTS, TH, CB

SUBJECT: THAI-CAMBODIAN SPAT: THAKSIN REPORTEDLY TO VISIT

TO PHNOM PENH THIS WEEK

 

REF: A. BANGKOK 2849

B. BANGKOK 1822

 

Classified By: Deputy Chief of Mission James F. Entwistle,

reasons 1.4 (b) and (d)

 

1. (C) Summary: In a move certain to inflame bilateral

tensions, fugitive former Prime Minister Thaksin Shinawatra

reportedly will visit Phnom Penh November 12 to address the

Cambodia Ministry of Economy and Finance. The Thai

government has repeatedly stated that it will ask Cambodia to

extradite Thaksin per a joint extradition treaty but Phnom

Penh has publicly stated it will refuse the request. The

appointment last week of Thaksin as an economic advisor to

Hun Sen (Ref A) risks damaging prospects for negotiations to

resolve border disputes, as the RTG plans to cancel a 2001

MOU that addresses mechanisms for overlapping sea claims in

the weekly Cabinet meeting November 10, and the Thai

Parliament appears likely to delay by three months or more

approval for demarcation of disputed land borders, originally

scheduled for routine approval in the November 9 session.

The situation at the border remains calm, with informal

Thai-Cambodian military talks increasing in an attempt to

prevent the diplomatic dispute from sparking a broader

conflict. End Summary.

 

2. (C) Comment: A visit by Thaksin to Phnom Penh would

unquestionably increase political tensions. The move comes

on the heels of more polls that show the Thai public mood

moving significantly against Thaksin, as his and Hun Sen\’s

actions have been judged by the public to have gone against

Thailand\’s interests. Since several of the most credible,

level-headed Thaksin associates told us November 4 that they

had advised him against a Cambodia trip, the announcement

raises the question that surfaced at the time of the April

violence: whose advice is Thaksin taking? While we are

encouraged that the two militaries have made principled

efforts to ensure that the dispute does not raise military

tensions, continued efforts by Thaksin and Hun Sen to provoke

the Thai government would likely be seen by many Thai as

reasonable justification for stronger reaction by the Thai

government against Cambodia. We will continue to urge calm

and restraint in our interaction with RTG officials. End

comment.

 

THAKSIN TO VISIT PHNOM PENH THIS WEEK

————————————-

 

3. (U) According to November 9 media reports, fugitive former

Prime Minister Thaksin Shinawatra will visit Phnom Penh this

week to address the Cambodia Ministry of Economy and Finance.

Cambodian Prime Minister Hun Sen said that Thaksin would

November 12 give a briefing to Cambodian economic experts,

one week after being named economic advisor to Hun Sen.

 

4. (U) Thai Prime Minister Abhisit Vejjajiva reiterated

publicly November 8 that the RTG would seek the extradition

of Thaksin if he traveled to Cambodia. The two countries

have an extradition agreement, but the Cambodia government

has so far maintained publicly that it would not extradite

Thaksin because the treaty contains a mechanism to deny

extradition if a government considers the offense to be

political in nature. (Note: Thaksin was convicted in October

2008 by the Thai Supreme Court for corruption, sentenced to

two years\’ imprisonment; he skipped the country prior to the

conviction after being released on bail. End note.)

 

SETBACK TO BORDER AGREEMENTS

—————————-

 

5. (C) The Thai Cabinet plans to cancel November 10 a 2001

Thai-Cambodian memorandum of understanding on overlapping sea

claims in the Gulf of Thailand, according to news reports.

The MOU, signed when Thaksin was premier, provides a

framework for negotiated demarcation of the area in the Gulf

of Thailand and on joint deals to develop gas and oil there.

Scrapping the MOU could significantly slow resolution of the

Preah Vihear border dispute, as Deputy Prime Minister Suthep

Thaugsuban told EAP Assistant Secretary Kurt Campbell in

 

BANGKOK 00002867 002 OF 003

 

July, shortly after a meeting with Hun Sen, that he believed

a grand compromise could be forged with Cambodia over the

disputed territory around Preah Vihear temple and the

overlapping sea claims (Ref B).

 

6. (U) The Thai parliament was initially scheduled to

consider approval of agreed minutes of Thai-Cambodian Joint

Boundary Commission (JBC) meetings in November 2008, and

February and April of this year in the session starting

November 9, but media are reporting such approval, required

for the next round of JBC discussions, may now be delayed due

to the recent escalations in Thai-Cambodian tensions.

Approval by Parliament is required by Section 190 of the

Constitution before Thai negotiators can proceed with joint

surveys and demarcation of disputed border areas, including

near the Preah Vihear temple. A joint Senate-House meeting

will be held this week, but the Bangkok Post reported Senator

Khamnoon Sitthisaman as saying that legislators were likely

to delay approval because of Hun Sen\’s actions in regard to

Thaksin. Parliament would instead form a joint committee of

MPs and senators to study the issue, Khamnoon said. The

study could continue until next February, as parliament goes

into recess November 28.

 

7. (C) Vasin Teeravechyan, the Thai JBC chairperson, told us

November 9 that the request for Parliamentary approval was a

normal procedure, and that the minutes had been agreed upon

together at the last JBC meeting in April. As such, it was

not unusual that Parliament would only now consider the

issue. According to Vasin, the decision on when to convene a

joint session of the House and Senate was the prerogative of

the President of the National Assembly Chai Chidchob. A

parliamentary official confirmed to us November 9 that the

joint session would likely set up a joint extraordinary

committee comprising of members of both chambers to

scrutinize the issue for 90 days, before re-submission to the

National Assembly.

 

MILITARY COORDINATION AT THE BORDER BUT TRADE AFFECTED

——————————————— ———

 

8. (U) The situation at the border remained calm but

cross-border trade and visits had been affected, according to

media accounts. Thai Second Army Commander Wiwalit Jonsamret

over the weekend publicly said that he had met with General

Jia Dara, Cambodian Deputy Supreme Commander, to ensure order

along the border. The two sides reportedly agreed that the

ongoing spat was an issue between governments and that it

should not impact relations between the two militaries.

 

9. (U) There were mixed reports about the effect of the

diplomatic tiff on border trade. Thai daily Naew Na reported

November 8 that the Thai-Cambodian dispute had reduced normal

business along the border, alarming some local Cambodians to

the point where they had begun to hoard food and other goods.

The newspaper also reported a drop in number of Thais

crossing border at Aranyaprathet to go to casinos in Poipet.

 

REDSHIRTS ADVISE CAUTION…BUT ADVICE APPARENTLY UNHEEDED

——————————————— ————

 

10. (C) Thaksin\’s apparent decision to accept Hun Sen\’s

invitation and travel to Phnom Penh will apparently come as a

surprise to members of his inner circle. On November 4 we

met separately with former Deputy Prime Minister and close

Thaksin ally Sompong Amornvivat, as well as red-shirt leader

Vira Musikapong, to discuss Thaksin\’s latest moves. Both

Sompong and Vira told us that they had counseled Thaksin

against going to Phnom Penh, arguing that there was little to

be gained by making the trip. According to Sompong, simply

suggesting he might travel to Cambodia had already triggered

the desired result: an overreaction by PM Abhisit and the

RTG. Sompong told us that he had advised Thaksin to avoid

pushing the issue any further, suggesting to him that he try

to strike a balance between making the government look bad —

which he said had already been accomplished by provoking a

public reaction — and damaging the national interest, which

he risked doing by actually traveling to Cambodia. When we

asked Sompong whether his advice had registered with Thaksin,

 

BANGKOK 00002867 003 OF 003

 

he told us that he believed that it had, and predicted

Thaksin would not go.

 

POLLS AND MEDIA STRONGLY BACK ABHISIT

————————————-

 

12. (SBU) If Hun Sen and Thaksin sought to bring pressure on

Abhisit, their actions appeared to have backfired, at least

in the short term. Support for Abhisit has shot up since the

controversy over Thaksin and Cambodia started. An ABAC poll

conducted November 6 showed that 83% of Thais believe that

Thaksin\’s actions with Hun Sen had hurt Thailand. The same

poll showed that the approval rating for Prime Minister

Abhisit was 60%, while that of Thaksin had fallen to 21%.

This stands in stark contrast to an ABAC poll conducted

October 22-24, during the first days of the ASEAN Summit and

Hun Sen\’s public offer to host Thaksin in Cambodia, which

reported that the approval rate for Thaksin was 25%, while

the rate for Abhisit was 22%.

 

13. (SBU) Editorials in Thai-language press have for the most

part shown strong support Abhisit\’s actions to date in the

dispute with Cambodia. Krungthep Turakit, a top

business-oriented daily, called PM Abhisit\’s decision to

downgrade Thai-Cambodian relations by recalling the Thai

Ambassador in Phnom Penh the right move. Naew Na, another

Thai-language daily, said that the poll numbers should make

Thaksin and his lackeys realize that their actions have hurt

the country. Kom Chad Luek, the third largest daily, called

for Thaksin to resign from being a Thai.

JOHN

Written by thaicables

July 22, 2011 at 9:24 am

09PHNOMPENH832 PRIME MINISTER HUN SEN PREVIEWS THAKSIN VISIT

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“234047”,”11/10/2009 11:42″,”09PHNOMPENH832″,

“Embassy Phnom Penh”,”CONFIDENTIAL”,””,

“VZCZCXRO5591

OO RUEHCHI RUEHDT RUEHHM RUEHNH

DE RUEHPF #0832/01 3141142

ZNY CCCCC ZZH

O 101142Z NOV 09

FM AMEMBASSY PHNOM PENH

TO RUEHC/SECSTATE WASHDC IMMEDIATE 1348

INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY

RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0009

RUEHBJ/AMEMBASSY BEIJING PRIORITY 2581

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RUEKJCS/SECDEF WASHINGTON DC PRIORITY

RHHMUNA/CDR USPACOM HI PRIORITY”,

“C O N F I D E N T I A L SECTION 01 OF 03 PHNOM PENH 000832

 

SIPDIS

 

STATE FOR EAP/MLS, EEB, IO

SINGAPORE PLEASE PASS TO DAS SCOT MARCIEL

 

E.O. 12958: DECL: 11/10/2019

TAGS: PREL, PGOV, MARR, MOPS, TH, CB

SUBJECT: PRIME MINISTER HUN SEN PREVIEWS THAKSIN VISIT

 

PHNOM PENH 00000832 001.2 OF 003

 

Classified By: AMBASSADOR CAROL A. RODLEY FOR REASONS 1.4 (B, D)

 

1. (C) Summary: The diplomatic spat between Cambodia and

Thailand took center stage during the Ambassador\’s meeting

with Prime Minister Hun Sen November 8. Hun Sen confirmed

that former Thai Prime Minister Thaksin Shinawatra would

arrive in Cambodia on November 10 and would deliver a speech

to Cambodian officials at the Ministry of Economy and Finance

on November 12. He also confirmed that, aside from the

diplomatic friction, tensions were low and military

commanders remained cooperative at the border, and that he

would continue to monitor Thailand\’s reaction and would

respond in kind to each diplomatic downgrade that the Abhisit

government initiated. We expect Hun Sen will now shift

largely from an offensive to a defensive position. He is of

course hopeful that the Thai will refrain from taking

precipitous actions, but he is prepared to match any Thai

action with a Cambodian reaction. In that context, Hun Sen

will likely be both confident and relaxed during the upcoming

Singapore meetings, amenable to suggestions that a

de-escalation of rhetoric and a re-engagement between

Cambodia and Thailand is in the best interests of the region

as well as the parties. End summary.

 

2. (C) In raising this issue during a meeting previously

scheduled to discuss a broad range of other issues (septel),

the Ambassador reaffirmed that both Cambodia and Thailand

should work to reduce political tensions and to refrain from

acts that could be considered provocative. Hun Sen replied

that military cooperation was proceeding very well at the

border ) \”there is no chaos,\” he explained, and \”things

remain very quiet.\” He also said there is no need \”to keep

so much force there\” and confirmed press reports that he had

ordered the 911 Brigade paratrooper unit be recalled to Phnom

Penh and that he would do his best to ensure that Thai and

Cambodian commanders continued to cooperate and avoid any

military confrontation. If the situation remained calm, Hun

Sen added he would also recall Division 1, which would reduce

the Cambodian military presence at the border to normal,

pre-July 2008, levels. Hun Sen reiterated that he wanted to

\”build up mutual trust between the armies,\” and that he hoped

that Thai military commanders would continue to cooperate and

work to \”reduce tensions.

 

3. (C) Hun Sen underscored that Thaksin would travel to

Cambodia from \”another ASEAN country,\” but that \”the Thai

don\’t care\” about the purported double standard that has led

the Thai government to criticize Hun Sen so publicly while

ignoring Thaksin\’s presence elsewhere in the region. (Note:

Hun Sen did not cite the name of the country where Thaksin

was reportedly currently residing. End Note.). \”Whether

Thaksin comes or not,\” Hun Sen explained, it remains the

\”business of Cambodia\” to engage him as an economic adviser

during the current economic downturn. Hun Sen confirmed what

he has said publicly: that the RGC would not \”accept\” any

extradition request from Thailand as this case was \”purely

political\” and the Thai-Cambodian extradition agreement was

based on customary international law that clearly allowed

extraditions to be rejected based on political context. And

although he said he expected the Thai government to deliver a

\”letter of extradition,\” he said that the RGC had already

prepared a reply rejecting the request.

 

4. (C) Because military relations at the border remained

cooperative, Hun Sen said that the principal conflict with

Thailand was diplomatic and that the public pronouncements

from various Thai officials to downgrade diplomatic relations

between Thailand and Cambodia reflected \”internal confusion\”

within the Thai government. After Thaksin\’s arrival, Hun

Sen said he would simply monitor the Thai reaction day by

day. \”There are many in the Thai government who are not

acting under orders of the Thai Prime Minister,\” Hun Sen

stated, pointing to the example of the Thai army, which \”had

to obstruct the yellow shirt protesters\” sent from Bangkok

from reaching Preah Vihear on September 19. In fact, Hun Sen

averred that the Thai business interests in Sisaket Province

were \”already complaining\” and would suffer most if Thailand

prolonged and exacerbated the diplomatic dispute by closing

the border with Cambodia in a \”frenzied reaction\” to

Thaksin\’s visit. He added that the RGC had already sent a

message to Bangkok that it was indeed the right of Thailand

to close the border but, unlike in 2003 when the Thais

 

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allowed goods to continue to cross, he would respond by

directing that Thai goods would also be barred from crossing

into Cambodia if Thailand did so.

 

5. (C) Again referring to perceived dissension among key

leaders of the current Thai government, Hun Sen claimed that

\”not everyone is on good terms\” and that Deputy Prime

Minister Suthep Thaugsuban and Minister of National Defense

General Prawit Wongsuwan did not agree with Prime Minister

Abhisit and Foreign Minister Kasit on this issue. \”I met

with them here,\” Hun Sen noted, and \”spent three hours with

them in Hua Hin\” on October 23, where their lack of support

for the direction of the current Thai government was clear.

Moreover, Hun Sen said that he had been contacted by

unspecified Thai Senators and other members of the government

to begin the work of diplomatic \”remediation.\”

 

6. (C) As previewed by the Prime Minister, Thaksin\’s private

commercial charter arrived at the military side of Phnom

Penh\’s airport at about 9:30 a.m. on November 10, originating

from Mumbai. Although local and international press viewed

the arrival from a distance, Ministry spokespersons were

guarded in their comments about the visit. Thaksin\’s car

entered a motorcade secured by Hun Sen\’s bodyguard unit and

departed for a lunch at Hun Sen\’s residence in Takhmao, south

of the capital. At the end of the day, MFA spokesman Koy

Kuong told reporters that no Thai request for extradition had

yet been officially received, although others report that an

extradition request from the Thai government has been already

transmitted. Thaksin is reported to be staying in a villa

close to the Cambodian Peoples Party headquarters not far

from the Royal Thai embassy. Unconfirmed reports indicated

that Thaksin is scheduled to depart Cambodia on November 13.

Separately, in response to the Ambassador\’s inquiry during a

meeting November 10, Commerce Minister Cham Prasidh commented

that he was very familiar with the popularity polls recently

conducted in Thailand and did not think they were the least

bit credible. He added that he thought nothing Thaksin did

or said in Cambodia would have much effect on the domestic

situation in Thailand.

 

7. (C) Comment: Hun Sen remained thoughtful and calm

throughout his discussion with the Ambassador, and there was

no hint of the provocative rhetoric that he sometimes

displays in public or private. In the weeks since Hun Sen\’s

October 23 announcement that he would appoint Thaksin as an

adviser, he has been most concerned about increases in border

military activity; he now seemed pleased with the extent of

military cooperation and believes that his decision to reduce

the number of troops will contribute to continued

cooperation. With that in place, Hun Sen has now turned his

attention to the diplomatic front and seemed focused

predominantly on how much and how quickly the Thai would

erode diplomatic relations in what he believes is an effort

to attract public support for a regime that can command long

term support of neither the military nor a majority of the

people. While it remains to be seen whether he has

miscalculated in that assessment, it is apparent that he has

received indications from some Thai officials that he has

not. But, more importantly, none of that seems to matter

much to the Prime Minister. Hun Sen has clearly calculated

that whatever diplomatic downgrades are initiated by the

Abhisit government do not outweigh the benefits that Hun

Sen\’s friendship and support to Thaksin could provide to

Cambodia both now and in the future. He seemed similarly

uninterested in ASEAN or international reaction to the spat

and did not directly respond to the Ambassador\’s inquiry

about the message he intended to send to ASEAN or the

international community about his actions.

 

8. (C) As much of the press and other reporting has

suggested, Hun Sen\’s motivations are best described as

personal political moves designed to attract perceived

benefits to himself and Cambodia and to disarm his foes in

the current Thai government. As this continues to play out,

we expect Hun Sen will shift largely from an offensive to a

defensive position. He is of course hopeful that the Thai

will refrain from taking precipitous actions, but he is

prepared to match any Thai action with a Cambodian reaction

every step of the way, as he has done with the reciprocal

recall of Ambassadors. In the meantime, we expect the U.S.

and others will find a confident and relaxed Hun Sen during

 

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the upcoming Singapore meetings amenable to suggestions that

a de-escalation of rhetoric and a re-engagement between

Cambodia and Thailand is in the best interests of the region

as well as the parties themselves. End Comment.

RODLEY

Written by thaicables

July 22, 2011 at 9:16 am