Published on January 13, 2006

The pep talk Prime Minister Thaksin Shinawatra gave to leading members of the business community at Government House on Wednesday was simply a rehash of old speeches.

But it provided a clear insight into his vision of how the Thai economy could benefit from “leapfrog” strategies and achieve lasting prosperity and stability.

The prime minister was particularly good at reassuring the captains of industry that he has put Thailand back on an even keel and that the economy is poised to take off this year.

Thaksin could keep on drawing a rosy picture of Thailand’s economic prospects without having to burden himself with the mundane tasks of spelling out policy objectives, thrashing out concrete measures and setting a time-frame to achieve them. But what is the use of a leader in possession of a grand vision if he lacks the wherewithal to translate it into reality? It was obvious that his audience was too polite to ask the PM to go beyond superficialities of the Thai economy under best-case scenarios.

Thaksin went so far as to ask his audience and the public at large to place their unquestioned trust in him. “What you all have to do is group together and brainstorm [to identify opportunities and suggest ways to overcome obstacles]. I’ll be the tree on which you perch before flying off to earn a living,” he told his audience at the “Growth for the Future” forum.

As if we could all choose to lead such a carefree and idyllic life under his benevolent leadership.

Thaksin offered up a favourable economic forecast. He said that government stimulus measures, particularly the infrastructure mega-projects, would guarantee economic growth of at least 5 per cent this year, especially since his administration has surmounted last year’s plethora of problems. These include negative consequences from the 2004 tsunami, bird-flu outbreaks, violence in the deep South, droughts and floods.

Apparently, such risk factors have no place in this year’s vision for Thailand.

The PM did not even bother to mention the possibility of global economic uncertainty. Even the most upbeat economists agree that Thailand’s economic performance this year hinges on the price of oil, effects of global financial imbalances on international trade, the direction of interest rates, inflation rates, current-account balances and the pace of mega-project implementation.

But Thaksin kept repeating the same old mantra, saying that to achieve 5-per-cent growth, the country must continue to focus on a “dual track” policy with exports and domestic consumption as the main driving forces. It’s as if the Thai economy was totally isolated from what happens around the world.

The prime minister pointed to the export sector’s strength and resilience, saying Thailand could have recorded a huge current-account surplus last year if not for the high oil prices. He attributed the current-account deficit of US$3.5 billion (Bt138 billion), or about 2 per cent of last year’s GDP, to the surge in oil imports, which reached $9 billion last year. That was how Thaksin downplayed external factors in order to provide positive reinforcement for boosting the flagging morale of the Thai business community.

He also launched into a favoured topic - the need to develop “industry clusters”: networks of interconnected companies that include suppliers, service providers and associated institutions in specific geographical areas, with the aim of increasing productivity and competitiveness. With liberal borrowing from business-strategy textbooks, Thaksin came up with an ambitious undertaking to group the country’s 76 provinces into 19 industry clusters, the identification of which has been delayed now that his One Tambon, One Product (Otop) initiative has begun to unravel.

It is not necessarily a bad thing for the prime minister to come up with a lot of vision: too many Thai leaders have been accused of lacking this. But it would be nice for Thaksin to develop a well-thought out vision - not just some potpourri of quick fixes - and stick with it long enough to develop concrete strategies that translate it into reality.

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