Keeping Thailand Open

Thaksin Shinawatra, Thailand's Prime Minister, fancies himself an Asian visionary. He's behind a fund that would have Asians buy bonds issued by other Asians instead of sending their money to America. He even envisions a regional currency for Asia, like Europe's euro.

As the leader of the region's fastest-growing economy after China, and with a popularity rating of 70%, Thaksin is firmly in control and worth listening to. He has correctly read the populist mood of Thailand's farmers and has showered them with cheap credit to stimulate demand. As an ex-cop, he has also flexed his muscle as a law-and-order leader. A bloody, nationwide crackdown on drug dealers and criminals has accompanied a move against the once-booming sex trade. In an interview with BusinessWeek, Thaksin says he's an admirer of Asian leaders such as Malaysia's Mahathir Mohamad and Singapore's Lee Kuan Yew.

Asia's standard-bearers of the past, though, have a mixed record. Some, like Mahathir and Lee, have built modern economies through a commitment to free markets coupled with a strong dose of authoritarian rule. Others, such as Indonesia's President Suharto, have gotten off to a promising start but ultimately were undone by corruption and cronyism. Thaksin still has time to set his direction. But that means paying special attention to the roles his friends and associates play in government posts and maintaining an arm's length between government affairs and his family business. He is Thailand's richest man, worth as much as $2 billion, and controls the biggest commercial TV station and the country's leading cellular carrier.

Thailand suffered greatly in the Asian crash of 1997, and much of the world's financial community wrote the country off. Today, the nation is getting back on its feet. The Bangkok stock exchange has soared 41% this year, exports surged by 18% in the first half, and hard currency reserves now stand at $40 billion as manufacturers have boosted both quality and productivity. Now it's Thaksin's job to make sure that Thailand's political culture keeps up with its economy so the country can become a modern, progressive nation.

Thaksin needs to choose the right path. If he veers off course, he risks destroying the institutions that make Thailand one of Southeast Asia's most open societies -- its feisty press, nongovernmental organizations, and vocal political opposition. The country and outside investors will be watching closely to see what kind of Asian leader Thaksin really wants to be.

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