Who's pulling the economic strings?

Who's pulling the economic strings?

As Thaksin is released on parole, business leaders muse on whether policy will change for a coalition government headed by the party he started

Thaksin waves to his supporters as he arrives at Don Mueang airport in Bangkok on Aug 22, 2023. Pattarapong Chatpattarasill
Thaksin waves to his supporters as he arrives at Don Mueang airport in Bangkok on Aug 22, 2023. Pattarapong Chatpattarasill

The political soap opera in Thailand is expected to revive after former prime minister Thaksin Shinawatra was released on parole, returning to his Ban Chan Song La residence in Bangkok, his de facto command base for years during his tenure as premier.

His first homecoming in 15 years has been closely watched by the business sector, which is curious about what changes this might cause to the current administration, especially regarding economic policy under the coalition government led by Pheu Thai Party, controlled by Thaksin since 2007.


Sisdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents, said whatever changes occur in Thai politics, consistent policies are necessary for the long run, as the current administration led by Prime Minister Srettha Thavisin has been working for only six months.

He said it might be too soon for a cabinet reshuffle, as each ministry has only started to push their projects, while fiscal budget disbursement is delayed.

Mr Sisdivachr said the return of Thaksin to his residence should not change much from his years in exile or detention at the Police General Hospital since September 2023, as most Thais realise he still has the power to pull the party's strings in the background.

"Whether or not Thaksin is involved with Thai politics, I believe most entrepreneurs would like to see the nation's economy left intact," he said.

"The government should do more to cooperate with different parties to solve critical economic and social problems in a transparent manner."

While stability in this administration is expected, Mr Sisdivachr said the political outlook in the long run is unpredictable as people will monitor the performance of the government, then make an evaluation during the next election.

"Whoever leads the government, they should realise the old way of doing politics doesn't work anymore. More people have higher expectations and want change if a better option can help the country survive downturns," he said.

Cambodia's former premier Hun Sen, centre left, poses for a picture during his meeting with Thaksin, centre right, on Feb 21, 2024.  Photo By Samdech Hun Sen of Cambodia Facebook Page


Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said from an economic perspective, Thaksin could be an advisor to the government because he is considered knowledgeable and has significant economic expertise.

"Having previously served as the Thai prime minister, Thaksin would be useful to the incumbent government," he said.

Regarding political risk, Mr Chookiat said Thaksin's return might not pose any as Thais tend to have a forgetful nature and any societal discomfort often fades away after about a year.

Aat Pisanwanich, an economics analyst and senior consultant at Intelligence Research Consultant Co Ltd, said Thaksin's release could influence economic policies beyond those previously announced during the campaign by the Pheu Thai Party.

There could be new developments based on Thaksin's knowledge and capabilities, as well as his 17 years in exile, as he may have identified factors Thailand needs to address but hasn't yet, said Mr Aat.

He said following the completion of the parole period, investors are expressing heightened confidence, both domestically and internationally.

Mr Aat said the presence of Thaksin has led some people to believe the government has obtained a key economic support structure.

In terms of politics, he said Thaksin's release might redefine the image of Mr Srettha and who is the real political baron overseeing the government's economic policies.

Regarding the impact of a cabinet reshuffle, Mr Aat said he expects it would mostly affect ministers from the Pheu Thai Party.

"Political risk is likely to increase because of lingering questions about fairness and equality in legal matters, from both the public and some senators," he said.

"However, opposition and public sentiment may not be strong enough at the moment, as many still empathise with Thaksin's past struggles."

Supporters of Thaksin and journalists are seen in front of the Shinawatra family’s Ban Chan Song La residence after his return home. Apichart Jinakul


Prakit Siriwattanaket, managing director of Merchant Partners Asset Management, said the stock market has been monitoring what role Thaksin might play in formulating government policies.

While living abroad, the former premier actively communicated with his supporters on social media, discussing various economic issues. But he went quiet after returning to Thailand, even after his release on parole.

"The image of the government under the shadow of Thaksin might cause people to doubt the concepts or ideas of Mr Srettha, who has openly expressed his vision on whether various policies can be realised," said Mr Prakit.

People may be confused about who has the real power within the government, he said.

"Mr Srettha has expressed many ideas, but has not been able to enact some of them, in part because it is a coalition government that sometimes lacks unity," said Mr Prakit.

"Mr Srettha's conflicts with the Bank of Thailand should not happen. If politicians think they can dictate to independent organisations, it causes the market to lose confidence."

Yet Mr Prakit said he believes if Thaksin speaks about an interest rate cut, more people would believe in such a move.

"I agree interest rates should be reduced. Last year, the central bank raised rates many times to 2.50%, causing the business sector to shoulder higher costs," he said.

"At the next meeting in April, there is the possibility the rate might be cut, though there may only be one reduction this year."


Somchai Sittichaisrichart, managing director of SIS Distribution (Thailand) Plc, an IT distributor, said the release of Thaksin on parole is unlikely to bring any change to the direction of Thai economic development given he is on parole.

He said Mr Srettha should implement short-term economic stimulus that neither borrows nor adds to public debt, aiming to generate revenue quickly.

Mr Somchai also urged the government to expedite state spending and work to increase foreign investment in Thailand.

Apichart Kasemkulsiri, chief executive of SET-listed L.P.N. Development, said political turmoil is unlikely following Thaksin's release on parole.

"There might be some opposition, but it's unlikely to escalate into political unrest as Thaksin probably wouldn't want such events to occur after his return to Thailand," he said.

"He is not as bullish as he used to be, considering his age."

Mr Apichart said the release of Thaksin could result in more vigorous government operations, such as economic stimulus policies that are expedited and intensified.

"Economic stimulus will be implemented to boost economic growth, as Thaksin comes from the private sector and has a better understanding of economic issues and conditions than someone from the public sector," he said.

Somnuek Tanthathoedtham, managing director of mid-sized developer N.C. Housing Plc, said potential political unrest would depend largely on opposition to Thaksin.

"I can't predict what will happen after his release. However, everyone wants the economy to progress and stabilise," said Mr Somnuek.

"If there is any opposition, it shouldn't escalate to violence."


The Federation of Thai Industries, the Federation of Thai SMEs and the Employers' Confederation of Thai Trade and Industry preferred not to comment on economic prospects following Thaksin's release, noting it is a "sensitive issue" they wanted to avoid discussing in case it caused some unwanted impact for businesses.

Thaksin has long been seen as the de facto leader of the ruling Pheu Thai Party, now led by his youngest daughter, Paetongtarn Shinawatra.

Political observers believe Thaksin will continue to exert influence on politics, especially with Pheu Thai at the helm of the government.

He was convicted by the Supreme Court last year on graft cases.

While serving as prime minister between 2001 and 2006, Thaksin implemented an economic policy, widely known as Thaksinomics.

One element of Thaksinomics is to emphasise populist policies, especially for the rural population. This was viewed by analysts as a way to help politicians gain votes in general elections.

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