SHADOW BOXING
KORN CHATIKAVANIJ
The Democrat party's internal elections today come at a pivotal time; a time when sweeping political change is needed to tackle increasing economic challenges facing Thailand's frail economy.
An end to the current political discourse is important, if not vital to Thailand's re-emergence as a player in the region's economy. As such, it is essential that I discuss the re-organisation process of the Democrats and explain how the party will be strengthened for the next election.
In addition, it is imperative that the government is forced to start focusing on the real issues at hand and put a stop to the political instability, which is progressively taking its toll on the struggling economy.
Stability through consolidation
First, the Democrat party will be electing a new executive committee this morning. The last time this took place was in 2005 when Abhisit Vejjajiva was elected party leader.
A lot has happened since then, including an election we boycotted that was later declared void, a planned election interrupted by a coup and then another election that we lost.
Throughout, the pressures on our party leader have been consistently immense. There have been many occasions when I have thought: "boy, I couldn't do that" and a few times when I have told him exactly that.
The external criticism of Khun Abhisit has also been unrelenting. Perhaps it's a function of high expectations, but he is generally given a very hard time even though he has maintained a consistently high standard of behaviour and integrity.
He led a spirited election campaign which saw the Democrats' national vote fall a mere 100,000 short of our rival, the People Power party. That's a huge swing from the loss by seven million votes in 2005.
His support base in the party is stronger today than it was when he was first elected and thus it is no surprise that there will be no contest for the leadership post today.
Not so for other positions though, and this is natural given that we are streamlining our management structure by reducing the number of executive committee members from 49 to 19. I would be economic with the truth if I was to deny that part of the reason for this reduction was to reduce the risk of a wayward executive triggering a party dissolution.
However, it was evidently clear that the large executive committee was cumbersome and inefficient. It also meant a lack of accountability and it was due for a shake-up. It will mean though that the elections today will be particularly competitive in a uniquely "Democrat" way. I have no doubt that we will emerge stronger from the process.
Nevertheless, in my opinion, the internal positions are less significant than our external roles as shadow cabinet ministers, or simply as MPs doing our job as lawmakers and looking after our constituencies. No need for internal positions to do the job and indeed some of our more productive shadow ministers are not even MPs.
From that perspective, today's events will have a bearing on how we build our party more than any immediate impact on how the public is served by us.
Onus is on the government
Second, of more significance to the public is what the government decides to do, given the legal and political set-backs they have had over the past two weeks.
There is no doubt that normal political standards would require the entire cabinet, or at least the Prime Minister, to take responsibility for acting unconstitutionally.
This is clearly not going to happen. There is every attempt to buy as much time as possible, not least to allow for another move at amending the constitution. This is potentially hugely negative for the Thai economy and for political stability.
The most positive move the government could make is to resign, thus allowing parliament to elect a new prime minister. A new cabinet would be formed with a fresh mandate.
Better still, this cabinet should comprise individuals who are not executive members of parties cited for potential dissolution. They should also not be persons facing criminal charges. This would allow for continuity even if parties were to be dissolved and continuity means confidence. It is a reflection of the pathetic state of Thai politics that our requirement is now simply that ministers are not alleged law breakers.
Searching for the silver lining
Third, on this note, I met with a group of local fund managers last week and was asked whether there were any reasons to be optimistic for Thailand. One manager told me that three of his friends had actually decamped abroad. One emigrated to Singapore, which signals how desperate he must have been!
My view on this subject is simple; I waste no time on being pessimistic. There are problems - and it could get even worse - but these problems can be solved.
In fact, I would say that bit-by-bit, even the political scene is getting better. The judiciary's role in this is very important and as long as the National Counter Corruption Commission and the Election Commission maintain the aggression of the pre-Thaksin era and the single-mindedness of the Assets Scrutiny Committee then I am certain that politician's behaviour will be forced to change.
For this, and I am loathe to say it, we do need to thank the coup. Without the coup, it would seem unlikely that many of the investigations that have led to criminal charges would have even been initiated.
It is obvious that even without the various charges against the government and individual ministers, there needs to be a concerted effort to set a clear economic agenda. The sense of hopelessness is largely because of this policy vacuum and is likely to be compounded by the monetary authority's decision to increase interest rates tomorrow. The signals from the central bank are clear on this though it is likely that the rise will be no more than a cautionary 0.25% increase.
Cynically speaking, the central bank has nothing to lose by making this decision but has everything to lose if it decided to do nothing. To clarify, a slow down in the economy will be the government's problem but an accelerating rate of inflation will squarely be the responsibility of the central bank.
The problem, however, is that even the Bank of Thailand cannot give assurance that increasing rates will have much of an impact on inflation that is largely caused by rising oil prices. To date, money aggregate has not increased and consumer spending is naturally being curtailed by lower real income, so there is no "exuberance" that needs to be taken care of.
Moreover, there is no asset price bubble either so all that an increase in rates is likely to lead to is higher costs for business and greater burden for individuals in debt.
I fear that rates will be increased for all the wrong reasons, with negative consequences for the economy.
Still, it is healthy for such debates to take place, if only we could have a government that could focus on what the government should do if the central bank was to start tightening.There are reasons to believe that we are on the way towards a more positive environment, though the route might be somewhat circuitous, and it requires all of us to remain disciplined in requiring nothing short of the highest ethical standards from our public servants.
Korn Chatikavanij is shadow finance minister. He can be contacted via email at: korn.chatikavanij@gmail.com.
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