Wednesday, April 05, 2006

Thaksin's Smartest Move
How To Win, Then Concede, Then Win Again

24 hours ago, Thaksin claimed victory in Sunday's controversial snap elections. A few hours ago, Thaksin stepped down as PM. The elections was a near-farce because almost all opposition parties boycotted it (sounded like an old Hungarian election). His party Thai Rak Thai party won just 16 million out of the 28 million votes cast. The figure is very shocking when you consider that the opposition parties boycotted the election. The 16 million figure was significanly down from the 19 million votes garnered by Thaksin's party in a similar election held 14 months ago. A smart person knows when to fight his battles. Thaksin tried to pick his, and the election results showed a sway that is too great to defend. Might as well go graciously and win some brownie points. Thaksin does not need the money, he has the money. He may need the political power, but where is the power when the vote count came in the way it did, and it would be a very stressful period ahead to continue. Already, as pointed out in a previous blog, the courts are beginning to show more vigilance in favour of public interests, which would make Thaksin's job all the more difficult.

Whether Thaksin got rich from his coveted position is not up for examination here. He did contribute some significant things for the Thai economy. After the financial implosion in 97/98 which affected many Asian countries, Thailand was one of the hardest hit. To be fair, Thailand rose the quickest from the pile of debris and hubris. Thaksin boosted domestic demand and export growth, especially domestic demand. This is a good appreciation of sufficient critical mass to drag yourself out of ruins. Which is also why I always advocate that countries like Malaysia, Australia and NZ should try and bring up their population to 50m-60m mark as fast as they can. This will greatly reduce the dependency on exports. Thailand has a population of 65 million.

Thaksin's policies helped the economy grow by an astounding 44% since 2001 and foreign direct investment into Thailand more than doubled to US$2.7 billion in the 3 years to 2005. The good times were to be had for all, in fact Thai stock markets was performing much better than its neighbours for the last 2 years. The one thing which escaped Thaksin is that in a domestic pump-primming exercise, you must know how to hold back and fine tune. CPI was already on a significant uptrend even before the oil price hikes over the last 12 months. This has led to rumblings of dissatisfaction in recent times. The sale of Shin Corp to Temasek was the right "poster boy" for the groundswell to break the barricades.

At least Thaksin has the foresight and street-smarts to step down upon hearing the results of the election. He won't be far away. Any mis-steps by the new PM and you can betcha Mr. T will be waiting in the wings to come back as the "prodigal son reborn-revised-rejuvenated-matured-remodeled-transformed-refreshed-rehabilitated"!

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