It has taken Thai intellectuals five years to experience a shocking wakeup call. For Thaksin has shown how Thaksinomics really works: he sold Shin Corporation, which indirectly holds a telephone concession, a satellite concession and a television concession, to Temasek Holdings of Singapore for a handsome premium.

Five years ago, his family’s combined holdings in Shin Corp were worth about Bt20 billion. Then Shin Corp started to roll, buoyed by all the direct or indirect benefits it got from government policies. Last month, his family netted a staggering Bt73.3 billion from the sale of Shin Corp. This deal transcends any regulatory oversights, from foreign ownership limits and government concessions, to tax exemptions.

If Thaksin can sell Shin Corp this way, what’s stopping him from selling Thailand’s water and electricity utilities, telephones, roads and other state assets for maximum profits for his cronies?

Thai intellectuals and the middle-class have become disillusioned. They feel that Thaksin has betrayed their trust. They thought that Thaksin would protect the poor and at the same time modernise Thailand through his CEO style of management. They wanted to give Thaksin a chance to lead the country because the Democrats were too slow and they did not seem to be able to get their act together. Instead, what the Thai intellectuals and the middle-class have witnessed over the past five years is the corporatisation of Thailand. The financial handouts to the poor are nothing more than camouflage. The real motivation at work is the enrichment of his political cronies through the manipulation of the stock market, public policy, the budget process, privatisation and the eventual sell-off of Thailand. Thaksin has proved that he is a hundred times more liberal than the Democrats. In fact, he is a hard-core capitalist. Just take a look at his Special Economic Zone policy, his free-trade agreement deals, his privatisation policy, and his recent Thailand Grand Sale at Government House, in which he announced an open door policy to the foreign investors without any limit or restriction.

Hitherto, foreign investors looked at Thaksin with a suspicious eye. They liked the liberal Democrats. They were alarmed by Thaksin’s attempts to fuel nationalistic fervour among the Thai public. Now foreign investors really like Thaksin in spite of his contempt for the system of democracy because Thaksin is taking Thailand down the road of economic liberalisation in the fast lane. Thaksin has been promoting the stock market. Thaksin is making it easier for them to buy into Thailand. If Temasek can own all of Shin’s holdings in Thailand, everybody else can buy anything in Thailand. In the end, the Thais will have nothing left to sell. The foreign investors now are afraid of the nationalistic sentiment fuelled by the Sondhi mob.

 The political pendulum is really making a sharp swing.

Economic liberalisation is good in theory. In reality, Thais will be ripped off in the end. A country where most of the 63 million people are poorly educated, live in the agriculture sector, and try to make ends meet, won’t stand a chance against the capital, the technology and superior management brought by globalisation. You must have an educated population and skilled workforce before you accelerate the pace of economic liberalisation. Otherwise, liberalisation must be done cautiously in a gradual and calculated pace. Foreigners help the Thais to prosper, but they can also take away everything.

Thaksin’s selling off of Thailand reminds us of Carlos Menem, the former president of Argentina. In his first term between 1989 and 1995, Menem sold state assets like crazy. According to the Economist, Menem “had privatised the state oil monopoly, YPF; the telecoms monopoly; sundry electrical, gas and water companies; Aerolineas Argentinas; two television channels; steel and petrochemical firms; and much else, down to grain elevators, hotels, even racetracks. “He had put out to concession 10,000 kilometres of potential toll roads, 25,000km of railways, the Buenos Aires subway, ports and more. The state welfare system was run down in favour of private pension schemes. Today, just about anything that moves, even the postal service, is in private hands.”

And what is happening to Argentina now?  “Argentina today is a half-way house, a second-world country. On one level, it has to compete with rich countries, skilled and geographically favoured; on another, with next-door Brazil, its big market and competitor, barely out of the third world, with wages far below Argentina’s, but a managerial elite just as clever. That is the economic conundrum. Socially and politically, too, this is a half-way house. Nearly all Argentines are literate, many highly educated. Yet income inequalities recall the third world, with a few seriously well-off, many seriously poor, and a once-thriving middle class that has been squeezed downwards”.

You can see that Thailand is clearly travelling along the same path as Argentina.

Only big businesses and political cronies will reap the gains through Thaksin’s economic liberalisation while the Thai middle class will be worse off, not to mention the rural people who will be condemned to live in dirt poor conditions.

Still, Thaksin is only half-way finished his agenda of selling off Thailand.

Thanong Khanthong

The Nation