VZCZCXYZ0001
OO RUEHWEB
DE RUEHBK #1209 0592351
ZNR UUUUU ZZH
O 282351Z FEB 07
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5170
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASH DC
UNCLAS BANGKOK 001209
SIPDIS
SENSITIVE
SIPDIS
STATE FOR EAP/MLS AND EB
COMMERCE FOR EAP/MAC/OKSA
TREASURY FOR OASIA
STATE PASS TO USTR FOR WEISEL
STATE PASS TO FEDERAL RESERVE SAN FRANCISCO FOR DAN FINEMAN
STATE PASS FEDERAL RESERVE NEW YORK FOR MATT HILDEBRANDT
E.O. 12958: N/A
TAGS: ECON PGOV PHUM PREL TH
SUBJECT: DEPUTY PRIME MINISTER PRIDIYATHORN RESIGNS
SENSITIVE BUT UNCLASSIFIED HANDLE ACCORDINGLY
REF: A) 2006 BANGKOK 6156(New Thai Economic Team)
B) 2006 BANGKOK 6002(Central Bank Governor Emerges as top Economic
Advisor)
C) Bangkok 1036 (SOMKID RESIGNS)
D) Bangkok 940 (ANAND DOWNBEAT)
E) Bangkok 152 (FOREIGN BUSINESS ACT)
F) 06 Bangkok 7484 (CAPITAL CONTROLS IMPOSED)
1. (U) On February 28, Deputy Prime Minister and Finance Minister
Pridiyathorn Devakula resigned his positions in government effective
March 1. The reasons he gave for his resignation were:
- Unhappiness with the criticism leveled at him by the head of the
Manager Media group, Sondhi Limthongkul. Pridiyathorn accused
"certain members of this government" of working "for the benefit of
certain media."
- A none-too-veiled accusation that the current government is
somehow working with pro-Thaksin elements, as illustrated by the
appointment of former Deputy Prime Minister Somkid (who resiQNQQP8Qguous way.
And the connection with the previous government is
still continuing. It is because a contact person with Thaksin
government is still holding position in this government."
- A general sense of being "uncomfortable" with certain cabinet
members.eQQ'3k3Q}'|owing, the junta's credibility QX_QGQNign. One local
observer argued that Pridiyathorn continues to harbor political
ambitions and that he had to start disassociating himself from the
current regime in order to position himself for a run at parliament
in the next elections -- although some credible figures believe
Pridiyathorn's image is now beyond repair (for example, see ref D).
3. (SBU) Another story making the rounds in explanation for today's
events is that General Sonthi (head of the Council for National
Security) working with Pridiyathorn arranged for Pridiyathorn to
resign while making accusations regarding the cabinet's probity on
the way out. This was done in order to pressure PM Surayud into
resigning. The endgame, according to this thesis, would be
Pridiyathorn becoming PM. This story is given credibility by those
noting Pridiyathorn's close ties to the royal family.
4. (SBU) Comment: Shortly after the coup, Pridiyathorn told us (ref
B) that he was sought out by the generals to take on the economic
portfolio before the tanks rolled on September 19. He was to take
care of the economy and reassure foreigner investors while the
generals cleaned up the political problems left by Thaksin. By all
accounts Pridiyathorn has been the overwhelmingly dominant voice on
economic matters in this government and his departure will leave a
vacuum that will be difficult to fill; not so muc c}gDCQ
which have been widely reviled in the foreign business community)
but because there are few credible replacements even for this weak
performer.
5. (SBU) Comment, continued: With this government having only monthQ in its self-professed mandate, increasingly difficult economic
and political environments, and the example of Somkid's recent
difficulties, it may prove difficult to find an acceptableQQJQqzom, among other ailments, a severe lack of high-level
policy coordination.