Friday, February 2, 2007

Deconstructing Thanong: The Nation's chief propagandist


Foreign media need a history lesson before praising Thaksin

Lie # 1: There is no history of the foreign media praising Thaksin

What is going on with the Asian Wall Street Journal, Newsweek and The Economist?

They are reporting on the ridiculousness of Thai politics and The Nation doesn't like it.

They are now lauding "Thaksinomics" and yearning for the return of the good old days of ousted prime minister Thaksin Shinawatra. It seems they have come to love Thaksin's style of capitalism.

Lie #2: Nobody is "lauding Thaksinomics" or "yearning for the good old days." Thanong doesn't cite one newspaper or magazine article to defend his argument, which is irresponsible journalism.

At the same time, these three publications have slammed the Sufficiency Theory, as if it would turn the clock backward and lead Thailand down the drain. They tried to link the Sufficiency Theory with all the things that have gone wrong with the Surayud government, from the military coup, the capital controls to moves to revise the Foreign Business Act.

Lie # 3: Nobody has "slammed" the sufficiency theory. Some have linked the sufficiency theory with the stupidity and ineptness of the Surayud Government, because the Surayud Government keeps justifying its moronic policies with Sufficiency Theory rhetoric, which it shouldn't be doing. The Surayud Government made stupid economic and political decisions on its own, and that is what it is criticized for. It is the stupid government that talks about sufficiency and then enacts right-wing nationalist economic laws. Thai politicians always lie and talk out of both sides of their mouths, especially when it comes to screwing foreigners. Foreigners are nervous, because Thai politicians and bureaucrats are notorious liars and can't be trusted to tell the truth. Foreigners have to look at policy, and those policies are hostile to foreigners no matter how many sweet words and bullshit the Thais government wants to pile on it.

The Surayud government might not have come into being through a legitimate democratic channel, because it was appointed by the military leaders who staged the coup on September 19 last year. However, the coup took place against a backdrop that all legal channels and the system of checks and balances had failed to rein in the corrupted power of the Thaksin regime. Nobody likes the coup. But it happened because the political crisis had reached a dead-end. The coup has nothing to do with the Sufficiency Theory.

Thai bullshit alert: Indeed, the Surayud Government is a front for a military dictatorship. The coup took place because Thaksin got arrogant and abused his power, and he ruffled the feathers of some close to the palace. Thaksin was indirectly undermining the importance and influence of the monarchy, and he got slapped down for it. Plus, he crossed a few military officers that he shouldn't have.

The Surayud government might have shot itself at the foot by introducing capital controls to curb the surging baht. It could have cut interest rates or slapped a tax on money market bonds to relieve upward pressure on the baht. But the capital controls also have nothing to do with the Sufficiency Theory.

Thai bullshit alert: The capital controls policy was used to flush foreigners out of the market, so Thais could gobble up a lot of stock on the cheap. The capital controls has nothing to do with sufficiency theory, but everything to do with making the Thai elite wealthy through insider trading, and this type of government policy collusion with stock traders has been going on for decades.

The Surayud government might have failed miserably to communicate with international investors about the revised Foreign Business Law, which was, overall, a good move. The changes to the Foreign Business Law do not add new industries or services for protection. So, how could it be deemed protectionist? It only defines existing regulations more clearly and tries to create a level playing field. No law is perfect. This can be debated further in the National Legislative Assembly. There is no need to panic. If it was that bad, DTAC would not have announced yesterday that it will invest Bt30 billion over the next three years to expand and upgrade its mobile phone network. Again, the revised Foreign Business Law has nothing to do with the Sufficiency Theory.

Thai bullshit alert: The foreign business act moves were to punish Singapore for buying the Shin Group companies. Now the Shin Group companies are close to worthless and the Thais are going to get them back for pennies on the dollar. This is the ruthlessness of Thai politics in action. This move also punishes literally thousands of companies that organized themselves through a nominee process, a process by the way that many Thai lawyers advocated to get around Thailand's nationalist business laws.

You may recall, when Thaksin came to power in 2001, the Asian Wall Street Journal, Newsweek, The Economist and most other international publications questioned his policies. In an attempt to win votes, Thaksin introduced a range of populist and "easy money" policies that went against the free-market principles and capitalism that The Economist and Asian Wall Street Journal editorials claimed to champion.

Thanong tells the truth here. Thaksin was roundly condemned for his nationalist economic policies by the foreign media.

The populist policies under Thaksinomics that shocked the world in its early years have now become a darling of these foreign publications. How can things turn upside down so quickly?

Thanong Lie #4: Thaksin's populist policies have not become the "darling" of the foreign media.

Thaksinomics has left Thailand with more than Bt150 billion in debt arising from subsidies for farmers' programmes, labour and social policy programmes, education programmes, agricultural bank loans that had gone wrong, rice and rubber subsidies, village funds, and the universal healthcare scheme. And that doesn't include Bt80 billion for the diesel subsidy. The Surayud government has had to set aside Bt80.5 billion in the current fiscal year to pay for these huge debts.

Thanong Lie # 5:Thailand's debt status is better now than it was during the previous government. Debt to GDP ratio has shrunk under Thaksin. It is true, however, that consumer debt exploded under Thaksin. However, Thailand is in good financial shape. Thanong is lying.

Let me point out the flaws of Thaksinomics that has gone against capitalism and the free-market principles that The Economist and Asian Wall Street Journal so cherish.

Lie # 6: There is no linkage between Thaksinomics and the free market capitalism that The Economist and AWSJ advocate.

First, Thaksinomics prescribed a debt moratorium for farmers. Was this populist policy in line with capitalism and the free-market principle? Thaksin was promoting a culture of debt write-offs. At the heart of capitalism lies the honouring of loan contracts. If you borrow the money, you have to repay it later, plus interest.

Thanong Lie # 7: The Economist and AWSJ never praised Thaksin for his debt moratorium policies.

Second, Thaksinomics threw easy money around into several populist projects - the village funds and other subsidies that have become a source of corruption and saddled the country with a huge debt load. The 30-baht healthcare scheme was one of the few good projects by Thaksin, but it was poorly implemented, and going forward, the fiscal budget might not be able to finance it.

Thanong Lie #8-The Economist and AWSJ never praised Thaksin for his socialist policies.

The grass-roots people, of course, loved the handouts and they came to identify these with "Thaksin's money", things they did not have to repay. Instead of using the money for investments, the handouts were spent on mobile phones, motorcycles and pick-up trucks that ended up creating more debt for poor rural people. Thaksin could artfully spend public money to buy votes. Did the Asian Wall Street Journal cover a series of stories on what went wrong with the village funds in the early Thaksin years?

Thanong Lie #9: On one hand Thanong accuses these newspapers of attacking Thaksinomics, then accuses them of praising Thaksinomics, then criticizes them for not attacking Thaksinomics again. Thanong is a dishonest hypocrite or just a bad writer.

Third, Thaksin and his team hated Time, Newsweek, The Economist, the Far Eastern Economic Review and the Asian Wall Street Journal. Do the editorial writers of these publications recall the foreign press' spats with the Thaksin regime? A few years ago they were covering stories that suggested the Thaksin regime was intimidating the press. How come they now kiss mouths with him so dearly?

Thanong lie # 10: Thanong tells the truth here, but lies. The Thaksin went after the foreign press . But I don't see them "kissing his mouth or praising him" now.

Fourth, the international press jumped against Thaksin when he announced in 2001 at a UN seminar that Thailand would turn "inward-looking" against unfettered capitalism. Thaksin wanted to pursue a dual-track policy to emphasise domestic demand. With Thailand reeling since the 1997 financial crisis, he wanted Thailand to walk away from the East Asian economic model that promoted exports as the engine of growth. He was then suspicious of foreign money and the uncertainty of foreign markets. He wanted to rebuild Thailand through domestic demand.

Thanong finally tells the truth. Thaksin was the chief champion of National Socialist economics with his Thaksinomics schemes, and the international press wasn't too happy with it, because it was based on an anti-liberal anti-foreigner economic agenda, kind of like the policies we have today advocated by the military junta and its class of ancient retired lackeys. Thaksinomics should be renamed Juntanomics.

Fifth, Thaksin and his team had bad-mouthed the US over its global role. They hated the IMF and the World Bank. They were suspicious of Western dominance. That's why Thaksin moved to shift Thailand's foreign policy toward China and, unsuccessfully, at one point, toward Russia. They envisioned a rise of Asia, which would counter the West's long imperialist grip over the world. They thought that Thailand could contribute to this Asia resurgence by playing a catalyst role in support of China and Japan, who together could form an axis to go against the Western powers.

Thanong tells the truth again. Thaksin did bad mouth the US, and he courted other powers.

I leave it to readers to think for themselves whether Thaksin's foreign policy was good or bad for Thailand, but I wonder how come The Economist and Asian Wall Street Journal love his policies unreservedly when these policies appear to clash with their fundamental beliefs?

Thanong is wrong here; they don't love Thaksin or his beliefs. Thanong should at least be honest enough to make a distinction between National Socialist Thaksin and neo-liberal Thaksin.

Along the way, Thaksin could get away with all of his mistakes, ironically, because of the exceptional performance by exporters. Exports were the catalyst of Thai economic growth during the Thaksin era - not domestic demand or his populist policies. With the current account surplus, Thailand was be to rebuild its international reserves and Thaksin could pursue an "easy money" policy without having to worry about public debt. The low interest rate environment, the sound global economy and high exports were the true story behind the economic growth during his time in power.

I would trust Thanong with this, but he is a compulsive liar, so I have to look up this information. By the way, if Thailand's export sector was strong, what was up with all the bullshit concerning capital controls to protect the baht and weak export sector? Maybe Thanong should criticize the government for talking from both sides of its mouth.

But Thaksin was exceptionally good at marketing. He could revive hope for the grassroots people and rebuild domestic confidence to make it sound as if he alone saved the Thai economy.

I agree with Thanong about this.

Then he fine-tuned his policies by gradually walking away from past mistakes by embracing privatisation, mega-project investment, free-trade agreements and stock market promotion - areas that the foreign investors liked to embrace - without any feasibility studies.

I agree with this. Thaksin went from National Socialist Thaksinomics to neo-liberalism.

At the same time, his cronies went on to amass wealth without any checks until his regime was toppled last year.

I agree. Thaksin's cronies made millions from stealing from hardworking Thais

Now Thaksin and the foreign publications are blaming the Sufficiency Theory as the root of all things going wrong in Thailand at the moment. Sufficiency Theory, as espoused by His Majesty the King, calls for a middle-path practice, like Buddhism, which can be applied to all the sphere of human activities. It does not go against globalisation or the principle of a free market, but it urges moderation and "self-immunity" as pointed out by MR Pridiyathorn Devakula, the deputy prime minister and finance minister.

This is bullshit. Government policy and Sufficiency Theory are not the same thing. The current group of Thais in power only use Sufficiency as a cover-up for their own policies and corruption. Many foreign publications have made the distinction. The stupid Nation is too idiotic to realize that no foreign publication would ever bring up sufficiency economics if the junta wasn't using it to justify its moronic policies. If anybody is causing confusion, it is the Thai government by the contradictions between what it says and what it does.

If you practice moderation, you should not run into debt beyond your ability to repay. With moderation, businesses or economies should not over-leverage their borrowings, otherwise they would run into a 1997-style crisis again. If you run your business with moderation, you reduce the chance of bankruptcy. With self-immunity, you have to make sure that when the worst comes, you have to survive. Again, businesses and economies must make sure that they can survive, say, a Sars epidemic, a global oil shock or terror attacks. Thailand is now buying oil imports equivalent to 10 per cent of its GDP. This goes against sufficiency. For when the price of oil rises, the overall economy is hurt. So Thailand has to find alternative resources of energy to reduce this high oil bill. If it can cut oil imports to 3-4 per cent of GDP, then it is practising sufficiency theory. As you can see, we don't practise sufficiency theory by cutting back oil imports 100 per cent. We only need to bring the risk down to a level we can manage. By practising moderation and self-immunity, you are pursuing sufficiency - not self-sufficiency. So stop distorting the facts.

Thanong not only lies through his teeth, but has also distorted the articles of the periodials he is attacking.

Nobody has a problem with Sufficiency Theory as advocated by His Majesty the King. What the king advocates is common sense. The same things our parents and teachers taught us while growing up. King Bumibol spoke of sufficiency theory during the economic crisis, because many Thai companies and individuals borrowed money to invest in the booming stock and housing markets to get rich quickly. HMTK advocates working hard and playing by the rules instead of chasing after big money with little or no capital. That is the basis of sufficiency theory. In other words, don't live beyond one's financial means and capabilities. Again, common sense.

The problem is that this junta and its bureaucrats, no practitioners of sufficiency theory themselves, are using Sufficiency Theory rhetoric as a cover to institute anti-foreigner policies. Any idiot can see this, but The Nation would rather live in denial or lie, because it is protecting its own economic interests by keeping foreigners out of the economy, especially services and the news media.

The Nation has always been an anti-foreigner paper and its showing its true right-wing nationalist colors now.

The irony of The Nation's criticism of Thaksin is that they believe in the National Socialist policies, at least the protectionist parts, that Thaksin did at the start of his premiership. The Nation loves the racist National Socialist Thaksin, but hates the pro- foreigner neo-liberal Thaksin.

And what is quite astonishing about The Nation's hypocrisy is the number of ads it runs in its paper and its website in support of crass commercialism and capitalism.

I guess Sufficiency Theory doesn't apply to the commercialism pushers at The Nation.

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