Thaksin Asserts Global Role as Sister Unveils Thai Spending Plan
Former Thai Prime Minister Thaksin Shinawatra
Haruyoshi Yamaguchi/Bloomberg
Thaksin Shinawatra, former prime minister of Thailand.
Thaksin Shinawatra, former prime minister of Thailand. Photographer: Haruyoshi Yamaguchi/Bloomberg
Thai fugitive ex-premier Thaksin Shinawatra said he plans to boost ties with countries around the globe after his sister’s election win, signaling he will play a central role in articulating her policies.
“Anything that I can do to continue our good relationships with any other countries, I will do,” Thaksin, 62, told reporters in Tokyo today. “I will avail myself for the good of my country and my people.”
Thaksin, who was ousted as prime minister in a 2006 coup and later fled the country, was granted an entry visa by Japan in the wake of his sister Yingluck Shinawatra’s majority win in a July 3 election. He spoke for about an hour at two separate media briefings in Tokyo at the same time as Yingluck read a 44- page policy brief in her first address to Parliament in Bangkok.
Moves to clear Thaksin’s name at home and abroad threaten to galvanize Yingluck’s opponents as she seeks to meet campaign pledges to boost living standards for poor Thais that underpin her support. In her speech to Parliament, Yingluck reiterated plans to raise the minimum wage, boost civil servant salaries and lift rice prices.
Thaksin’s appearance “opens up Yingluck’s administration for critique by the opposition that it is indeed controlled from abroad by Thaksin himself and that he’s the de facto leader,” Johannes Lund, Southeast Asia analyst at Control Risks Group, said by phone from Singapore. “We are probably going to see a lot more of these high-profile appearances in the future.”
‘Politically Motivated’
Since the coup, courts have disbanded two parties and disqualified two prime ministers allied to Thaksin, who has lived in Dubai since fleeing a jail sentence for abuse of power in 2008. Thaksin and about six Pheu Thai lawmakers face terrorism charges in Thailand for their role in violent street protests in Bangkok that led to 92 deaths last year.
Thaksin called for an investigation into the loss of life, saying those found guilty of committing crimes would be held accountable. He also said a new constitution was needed “to allow freedom and justice” and ruled out going to jail, calling the charges against him “politically motivated.”
Yingluck, 44, said in her parliamentary address she would implement “a more balanced economic structure” in an effort to safeguard Southeast Asia’s second-largest economy from external shocks. Thaksin said the government’s policies will “strongly stimulate” growth once they take effect about two quarters from now.
“We recognize that increasing the minimum wage and the price of rice will fuel a little more inflation, but it can be managed,” Thaksin said. “If it were increasing, it would be for only one year and next year it would be flat.”
Fueling Inflation
Economists expect Bank of Thailand policy makers to raise borrowing costs at a meeting tomorrow even after Thailand’s economic growth unexpectedly slowed last quarter. Commerce Minister Kittiratt Na Ranong said yesterday he wants the central bank to review its interest-rate policy to ensure that higher borrowing costs don’t raise production costs.
“Everybody pays for higher prices and the ones who suffer most are the poor,” opposition leader Abhisit Vejjajiva, who was replaced as prime minister this month, said in Parliament after Yingluck’s address. “If we destroy the discipline and independence in fiscal and monetary policies, inflation will accelerate.”
Higher Borrowing Costs
The Bank of Thailand will raise borrowing costs by 0.25 percentage point tomorrow for the seventh straight meeting, taking the key rate to 3.5 percent, 16 of 20 economists said in a Bloomberg News survey. Four expect no change.
Pheu Thai promised tablet computers, high-speed trains, dams and the construction of a new city before the election. Yingluck offered no further details today on plans to reduce the corporate tax to 23 percent from 30 percent and almost double the minimum daily wage in some parts of the country.
Higher wage bills, borrowing costs and a stronger currency may affect exports of manufacturers like Hana Microelectronics Pcl (HANA), Thailand’s largest packager of semiconductors. Toyota Motor Corp. (7203), General Motors Co. and Ford Motor Co. (F) are among automakers that have used Thailand as a global production hub due to tax incentives and trade arrangements that grant access to Southeast Asia’s 592 million consumers.
The baht, little changed today, has strengthened 3 percent since Yingluck’s election win, the most among Asia’s 10-most traded currencies outside of Japan. The SET Index, Asia’s second-best performer after Mongolia since the election, fell 0.3 percent as of the midday break.
Loyalty to the Throne
Pheu Thai won 265 seats in the 500-seat parliament, the fifth straight time a party linked to Thaksin has won the most seats in an election since 2001. The military ousted him in 2006 on grounds he failed to respect King Bhumibol Adulyadej, 83.
Thaksin, who founded what became Thailand’s biggest mobile- phone company, draws his support from poorer Thais in the north and northeast who make up a majority of the population. His opponents accused him of seeking to monopolize power during his five years as prime minister, threatening the monarchy’s role.
Thaksin today pledged loyalty to the throne and said Thailand’s constitutional monarchy “will continue forever.” Laws protecting the royal family from criticism were invoked too often to persecute political opponents, he said.
The former premier said he doesn’t plan to return home immediately and would only do so once rifts within the country had been healed.
“I would like to urge every Thai, reconciliation is the key for the stability and prosperity of Thailand,” Thaksin said. “We should come together and clear the differences.”
Thaksin was granted a visa by Japan at the request of the Thai government, Japan’s Chief Cabinet Secretary Yukio Edano told reporters on Aug. 15. He plans to meet with victims of the March 11 tsunami in northern Japan during his stay.
To contact the reporters on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net; Patrick Harrington in Tokyo at pharrington8@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net
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