Locals bad, 'WSJ' good

"Thai Leaders Look to Free Up Economy" is the headline. The lead paragraph says: "Supporters of Thailand's ousted prime minister Thaksin Shinawatra are now preparing a series of economic measures to put the country back on the international map."

In other words, the paper suggested the PPP planned to rescue Thailand, which lost its way on the international map since the military coup of September 19, 2006. The article said the foreign community was placing high hopes that the new government, under the guidance of Thaksin Shinawatra, would soon return confidence to the country.

The article was based on an interview with PPP secretary-general Surapong Suebwonglee, who is now widely tipped to become finance minister, and featured the PPP "quick win" economic policies on the Saturday after the PPP announced it would lead a six-party coalition government.

Yes, it was the same day PPP leader Samak Sundaravej took a swipe at local reporters who raised the question about who would be prime minister in the coalition government. While Samak was in no mood to discuss politics with reporters, Surapong was more comfortable talking with The Asian Wall Street Journal's reporter about the party's economic plans.

First, Surapong said the government would cancel all capital controls imposed in December 2006, in order to "send a powerful signal to the international investment community".

Surapong also repeated promises to construct infrastructure mega-projects to improve Thailand's economic efficiency.

And here comes another interesting point.

"The new government also will begin discussing interest-rate cuts with the central bank," Surapong said.

The suggestion may well irk the ladies at the Bank of Thailand who guard against monetary instability.

Unfortunately, the reporter did not ask about the dangers of interest-rate cuts amid the pressures of inflation and rising oil prices. But we would not bet against the PPP, as we have seen this happen before when Thaksin became prime minister: he cut interest rates during his first year in office.

But the circumstances now are obviously different.

We only hope the quick-win economic policies of Thaksin - widely believed to be the sequel of populism - will not leave dire consequences: a bleeding-out fiscal position, accumulative debt at the Oil Fund and rising household debt.

But that may be a point for PPP politicians to worry about later. For now, they would do better to concentrate their energy on the selection of new economic ministers, in order to ensure a warm reception from the locals.

busdsk@nationgroup.com

The Nation