He was appointed by General Sondhi Boonyaratglin, leader of the bloodless September 19 coup, as head of the economic advisory team for the Council for Democratic Reform, since renamed the Council for National Security.

Ammar, who is also honorary adviser to the Thailand Development Research Institute, said in an interview with The Nation that he agreed with most of the policies Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula has said he wants to implement during the one-year period of the transitional government. Ammar said the sufficiency-economy philosophy being adopted by the government was in fact a model for a "prudential economy" and a risk-management strategy for the government.

Ammar said Thailand did not need to reduce its economic growth despite the sufficiency-economy philosophy. "Four to five per cent is still fine," he said.

However, Ammar recently met a foreign economist, who asked him how Thailand would cope with the neighbouring countries if they grow 7-8 per cent while Thailand is happy with 4-5 per cent.

Ammar said the foreign economist pointed to capital outflow as a problem for Thailand that might draw down the country's gross domestic product down to 2-3 per cent. However, Ammar believes Thailand has enough savings to be stable with a growth rate of 4-5 per cent. But there would indeed be a risk of an outflow of entrepreneurs, business know-how and information technology to neighbouring countries with higher growth rates.

"I still can't figure out this

problem," Ammar admitted.

However, importantly, Ammar said Thailand should be decisive about the nominee law.

"I personally don't care which way we tackle the nominee issue. I don't mind if they want to open or to close a particular business to the foreigners. But once a decision is made, we must stick to it. It is the government's duty to keep the spirit of the law, not play games with it. Investors should be informed this is our policy. This is the spirit of the policy. We shouldn't change in mid-stream," he said.

The nominee law has emerged as a crucial issue, because the controversial sale of Shin Corp shares by ousted Prime Minister Thaksin Shinawatra and his family to Temasek Holdings raised suspicions that some of the major Shin shareholders were nominees of foreigners.

Ammar suggested that if Thailand was to have a nominee law, the government should introduce an amnesty for past transactions. It should then gradually straighten out the situation within three years, before a full control mechanism is in place in 10 years. He said to be clear on the nominee law was to respect the "rule of law".

In addition, Ammar suggested the government dissolve the BoI, since investment promotion has in fact not helped much. Corporate tax reform should also be a priority. He also described the BoI as a body for helping only the rich.

"I think the BoI should be purged, and we should also do tax reform, but every government is afraid of tax reform. But I'm not sure whether this could be done within one year [of the interim government]. If it is to be done, the interim government should leave the loose ends and allow the next elected government to put in the exact rates," Ammar said.

Ammar also recommended the interim government privatise all Thai banks, including Krung Thai Bank, to prevent politics from becoming involved in the banking sector. However, he said specialised financial institutions should remain state-owned.

"We should reduce state intervention in the banking sector. We should indicate the rule of law will apply to the country's administration of financial institutions," he said.

However, he said the interim government should not privatise state enterprises, but rather set up a legal framework for the regulatory body on privatisation.

"The privatisation of PTT Plc did not go through any consideration of the regulatory body. But I think Khun Piyasvasti [Amranand, the new energy minister] knows about this issue," he said.

Wichit Chaitrong,

Jiwamol Kanoksilp

The Nation