They made their remarks in a prelude to their release next week of a comprehensive assessment of the economy over the past five years under Thaksin's stewardship. The study is a response to regular claims by the prime minister and his supporters that his policies have helped turn the economy around since he assumed office in 1999.

Its comprehensive analysis of Thailand's recent economic history will cover the populist policy of village funds, debt suspension for farmers, the transparency of the government's economic policies and its debt restructuring scheme, said Somchai Jitsuchon, who is TDRI's research director for macroeconomic development. Other members of the team include Ammar Siamwalla and Somkiat Tangkitvanich.

He said he would demonstrate how the economy would have performed had there been no Thaksin government.

In a preliminary assessment, Somchai said the government of Prime Minister Thaksin Shinawatra had not done much to contribute to the post-crisis recovery of the economy. In fact, he said, had Thaksin not been in office, the economy would not have been as bad over the past five year as some people believe.

Positive factors that contributed to growth included the expansion of the world economy, which boosted Thailand's exports, while low interest rates around the world reduced the threat of inflation. Among other things, the team found that the economy had its own mechanism for rebounding after the crash.

"Credit should be given to Thaksin for making the public aware that he was alert to the changing world economy," Somchai said.

However, a majority of his Cabinet did not share Thaksin's high degree of awareness and the result was ineffective policy implementation. Reform of the public sector, implemented by Thaksin, has not delivered the expected performance, while market mechanisms have been damaged by the prevailing monopoly and the lack of a level playing field, he said.

Somchai is still optimistic about the economic outlook despite the political turmoil.

"Investors and consumers should not take a negative view of the current political turmoil since awareness of political reform will be good for the long term economy," he said. Foreign investment will come if Thailand can demonstrate that it is mature enough in politics, or can find a peaceful solution to the political crisis.

He said the export sector would perform well due to rising demand for Thai products. Japan is recovering from more than decade of deflation and high growth continues in China and India, although growth may decline slightly in the United States.

He warned of a psychological factor: that waning confidence among investors and consumers may be self-fulfilling and lead to a real decline in both consumption and investment.

All parties should avoid panicking and instead build up their confidence, he said.

He did not agree with an election claim by Thaksin, who said that if Thai Rak Thai is not re-elected, the Thai economy will face a crisis and the International Monetary Fund will step in.

He also played down concerns about a deep separation in Thai society now that the middle class had joined protests seeking to oust Thaksin and the poor are campaigning for him to stay in power. Many of members of the middle classes today were poor 10 or 20 years ago, he said.

"Thailand's economy is more dynamic than some pessimists think," Somchai said. "The opportunity is available for the poor to move up the social ladder."

But a serious issue, is  politicians offer populist handouts to the poor and then abuse their power to boost their personal wealth, he said.

Wichit Chaitrong

The Nation