Economists have suggested the government should reform the boards of directors of state enterprises to prevent the repetition of political intervention, since politicians tend to name their supporters to sit on the boards for their own personal benefit.

The comments were made as the Airports of Thailand board of directors resigned en masse last week in an apparent move to show their support for the new government having a free hand in running state enterprises.

In a related development, two directors of state-run Krung Thai Bank also announced their resignations. Somchai Wongsawat, who is former PM Thaksin Shinawatra's brother-in-law, and Wichianchot Sukchotrat submitted their resignations, effective from last Friday.

The resignations of the state-enterprise directors have raised the question of whether politicians should be entitled to fill some of the boards' seats. There are also increasing calls for politically appointed directors to leave now that the government that anointed them has gone.

The economists, however, noted that the directors' replacements would not solve the problem, because their seats would be filled by the new government anyway.

Chulalongkorn University economics lecturer Teerana Bhongmakapat said the government should instead take this chance to reform the management of state enterprises.

His comment came as public and political pressure mounted against state-enterprises boards that had been appointed by the ousted Thaksin government. The military coup leaders last month cited allegations of widespread corruption in the Thaksin administration as one reason for overthrowing the government.

Teerana said permanent secretaries and government officials should not sit on the boards of directors of any state enterprise. He pointed out that currently, a permanent secretary could be the chairman or a member of a state enterprise's board.

But this practice has resulted in managerial inefficiency, because these officials cannot devote full time to their boards and often send representatives to attend board meetings.

Those who support senior officials on the boards have argued that they know the job well, while politicians or outsiders may not be keen on the details. But Teerana pointed out that this might create problems, because bureaucrats tend to succumb to political pressure.

Teerana said ousted Prime Minister Thaksin Shinawatra tended to lessen the role of bureaucrats and preferred to name people with close connections to the Thai Rak Thai Party to sit on the boards of state enterprises.

He said political connections and the patronage system had been obstacles for the reform of state enterprises, because the boards did not fully act to protect the interests of the agencies.

Teerana suggested there be an independent body to make regular assessments of the performance of state enterprises and release that information to the public. He believes that the public could exert pressure on the state-enterprise boards, deterring them from corruption or poor performance.

Proper privatisation would improve management of state enterprises, but the poor privatisation under the Thaksin government has given a bad impression, because people suspect that politicians and their cronies want to pursue personal gain from privatisation by transferring state assets into their own hands.

Aat Pisanwanich, an economist at the University of the Thai Chamber of Commerce, shared similar concerns, saying representatives from the private sector, non-government organisations and academia should be represented on state-enterprise boards.

Sombat Thamrongthanyawong, a member of the board of the Secondary Mortgage, a state enterprise under the Finance Ministry, conceded it was hard to prevent state-enterprise boards from seeking personal gain. One solution was to select those with good reputations for key posts in state enterprises, said Sombat, who was recently appointed a member of the National Legislative Assembly.

Wichit Chaitrong

The Nation