Economic unrest prompts coup in Thailand

Kai Ryssdal Sep 19, 2006

KAI RYSSDAL: Across the international dateline in Thailand it’s tomorrow already. Things are quiet so far in Bangkok. Tanks on the streets but no shots fired. The army has declared martial law and revoked the constitution. The timing was convenient. Now former Prime Minister Thaksin Shinawatra is in New York for the U.N. General Assembly. But economic unrest has been brewing for a while. We called David Wells at the Financial Times in London to get some background.

DAVID WELLS: Back in January, Thaksin’s family stake in a telecommunications company was sold to a Singapore company called Temasek for $1.9 billion. And that was done tax-free. And that’s what angered a lot of the political elite in Thailand as well as just sort of run-of-the-mill-type people. Most of Thaksin’s support comes from a rural society, and he’s been trying to win their sway but hasn’t succeeded this time.

RYSSDAL: As David said, the government’s been unpopular for some time now. Especially with a key constituency. Pasuk Phongpaichit is an economist in Bangkok.

PASUK PHONGPAICHIT: Economy-wise, with the higher interest rates and the rising oil price, the old policy didn’t seem to work. And the government seemed to be moving towards more cronyism, more blatant corruption, and this cronyism and corruption has eventually dawned upon the major business group who are not the inner circle of the government to realize that Thaksin is not good for them. They became less tolerant during the past two years.

RYSSDAL: Are you saying, then, that the military which staged this coup was taking its cue, in some degree, from the business community in Bangkok?

PASUK PHONGPAICHIT: Definitely. I think that what the major business people are thinking is very decisive. This disenchantment with the prime minister among the educated middle class of Bangkok has been going on for some time. But during those times the business community has been very silent. But in the recent months we have seen a different scene from the local business community. And I also think that even among some of the foreign communities here, maybe in the beginning they think that Prime Minister Thaksin is very good for the Thai economy. But for the last year or so I think they becoming to turn around and see that he’s become a part of the problem. He is creating instability to the Thai economy.

RYSSDAL: What do you think the coup today will mean for the Thai economy? Will it be a problem or will there be hope now?

PASUK PHONGPAICHIT: The news about the coup came on since the afternoon and the stock market went up. Two days before, I said a coup is not good for the Thai economy. But, I’m not so sure now. If it makes the business people feel that Thai society will be more stable, then they will have more confidence.

RYSSDAL: That was Pasuk Phongpaichit. She’s a professor of economics at Chulalongkorn University in Bangkok. The Thai army announced a market holiday for Wednesday. Probably just as well. Think back to the Asian economic crisis in 1997. A run on the Thai baht that set that in motion.

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