VZCZCXYZ0000
RR RUEHWEB
DE RUEHBK #1520/01 0730936
ZNR UUUUU ZZH
R 140936Z MAR 07
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 5534
RUCPDOC/USDOC WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASH DC
UNCLAS BANGKOK 001520
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: SOMKID PLANS OWN POLITICAL PARTY
SENSITIVE BUT UNCLASSIFIED HANDLE ACCORDINGLY
1. (SBU) Summary. On March 14 Econoff met with Somkid Jatusripitak,
Deputy Prime Minister for the Economy during the Thaksin regime and,
for five days, the current government's spokesman on "sufficiency
economy" questions. In a wide-ranging discussion, Somkid expressed
full confidence that elections would be held by early 2008 at the
latest, that with former Deputy PM Pridiyarthorn's departure RTG
policies will become friendlier towards foreign investors and that
he plans to form his own political party and run in the next
elections "if the new constitution is good enough." Somkid expressed
confidence that with more appropriate economic policies, the Thai
economy could again grow at a pace in line with other regional
economies because Thailand "has a good, sound base from which to
build." End Summary.
The Old Economic Policies are Dead
---------------------------------------------
2. (SBU) Accompanied by his key advisors, former Vice Minister for
Commerce, Dr. Uttama Savanayana, and former Secretary (a
politically-appointed advisory position) to the Commerce Minister,
Pimon Srivikorn, we met with Somkid in the "Royal Suite" at the
Bangkok Intercontinental hotel, owned by Pimon's family. Somkid
began by acknowledging that recent Thai economic policies were bad
and "damaged confidence of foreign and Thai investors." He blamed
these policies entirely on former Deputy PM Pridiyathorn and Bank of
Thailand governor Tarisa whom he described as "arrogant" and "just a
regulator" respectively. Somkid absolved the rest of the government
from any responsibility for problematic economic policies explaining
that PM Surayud "is just a soldier who doesn't know anything about
economics and he left everything in that field to Pridiyathorn."
Somkid also argued that Pridiyathorn did not confer with other
ministers or outsiders when devising his policies. He did not answer
our question as to why Pridiyathorn chose these policies other than
that the former Deputy PM "is extremely confident."
3. (SBU) Economic policies such as capital controls and the FBA
amendments will soon be reversed, according to Somkid, the only
question is how long is needed to do so in order to avoid the
government "losing too much face." He claimed that Deputy PM Kosit
"takes his orders from (Bangkok Bank president) Chatri" and
therefore will do whatever is good for business. He urged us to
encourage a committee of foreign business leaders here to meet with
Kosit to express their concerns.
4. (SBU) Somkid said he has recently met with several leading
Japanese and PRC businesspersons who have decided to put off any
additional investments in Thailand "for at least one year after
elections." He claimed that this extends to JBIC which has been
approached by the RTG to help fund light rail expansion projects in
Bangkok. Somkid says JBIC will not say no to the loan request, but
will stretch out negotiations as needed. Despite this, Somkid
believes that the Thai economy "will be OK because we have such a
good base" and that investors will quickly return to Thailand once
political stability is restored.
Political Ambition
-------------------------
5. (SBU) Turning to politics, Somkid repeatedly said "don't worry"
about the current regime given up power; "elections will be held end
of the year; early next year at the latest." Regarding the drafting
of the new constitution, Somkid argued that even if the new version
is defeated in a referendum, the RTG "will simply pull the old one
off the shelf" and elections will be held as planned; "we are too
democratic now for anything else to happen."
6. (SBU) Somkid then asked "what would the Americans think if I form
my own political party." He went on to explain that he has the
support of about 100 former MPs "and a large part of the business
community." Like any good politician, Somkid averred that he would
rather stay retired and out of politics but that he should take
advantage of being "so popular." The deciding factor will be whether
the draft constitution allows for an appointed PM; if so then Somkid
said he will not proceed with his party. That said, he and his
advisors all argued that popular sentiment against such a clause in
the constitution made it highly unlikely that appointed PMs would be
incorporated into the draft.
7. (SBU) In response to our question about whether he might be
excluded from politics if the Thai Rak Thai party is found guilty of
violating election laws and dissolved by court order, Somkid
responded that "it all depends on the generals and what they want."
He said that he believes that the CNS "will pick and choose a few
people they want to exclude" and that he and Pimon will be exempted.
On the other hand, he believes that Thaksin will certainly be
excluded from politics by the court.
8. (U) Somkid has begun formulating the basis of his party's
economic platform; basically a middle path between the "sufficiency
economy" philosophy currently espoused and the demand-led, high
growth approach he pursued when working for Thaksin. His new
approach, Somkid explained, is based on "four pillars", namely
"sufficiency by adopting a culture of productivity and a culture of
collaboration; 'virtue' by introducing market as well as moral
wisdom; 'capacity' focusing on education; and 'balance' focusing on
fair income distribution between city and rural areas and balancing
the economy in both domestic and international fronts, and allowing
greater participation from the private sector on policy/strategy
making." Finally, he wants to differentiate Thailand by positioning
the country on the basis of its "Thainess" meaning its culture of
hospitality, cooperation and style.
9. (SBU) Comment. Somkid was jovial and relaxed and seemed
unperturbed by last month's debacle which saw him resign from
working for PM Surayud after only 5 days. While he did not want to
talk about those events, he said he thought the outcome made him
more popular and made Pridiyathorn an unviable political figure.
When we asked why Pridiyathorn resigned, Somkid said he didn't know
and noted "I was the one who appointed him Governor; I don't know
why he hates me." Somkid was extremely confident that he can win an
election, pointing to Pimon and saying "you should get to know him
better, he will be a minister some day." As usual, Somkid emphasized
his connections to China and Japan which he clearly sees as key to
Thailand's long-term economic future. He argued that US companies
should work with Thai companies to penetrate the Chinese market; "we
know them; we're the same; and you know us. We all went to American
universities." BOYCE