Thaksin's spectacular Rise & Fall

Thaksin's spectacular Rise & Fall
By Nirmal Ghosh

The Straits Times
Publication Date: 24-09-2006


Former Thai prime minister Thaksin Shinawatra built a US$2 billion fortune and rose to power by appealing directly to the poor. During his rule, the Thai economy shook off the 1997 financial crisis and boomed. So how did the billionaire politician end up without a job in last Tuesday's bloodless coup?

In an ironic twist to the downfall last week of the most powerful prime minister Thailand has ever seen, Mr Thaksin Shinawatra's very strength might have been his biggest weakness.

The 57-year-old billionaire businessman from Chiang Mai had built his political power base on the backs of poor farmers from the country's north-east.

His businessman's horse sense went down well there.

He once told The Sunday Times: "Better to lend money to the poor who will pay it back than give it to rich businessmen who will run away with it.

"If I walk into a bank in a suit, they will give me a loan without question. Try walking into a bank dressed like a villager and see what they say.''

He founded the Thai Rak Thai (TRT) - Thais Love Thais - in 1998 on a populist platform which promised to spread wealth to rural Thailand.

Three years later, it rode a wave of disillusionment with corruption and directionless government to victory in the 2001 election.

Thaksin, weathering accusations that he was concealing his own vast assets, approached politics and governance like he would run a business.

The TRT had sent consultants to the countryside to find out what the people needed and fashioned policies that delivered. Among them were cheap universal health care and microcredit schemes.

Last year, his party captured an even larger majority. The regions he had cultivated with his populist policies - the north and north-east - alone delivered 259 seats out of the 375 the TRT ended up controlling in the 500-seat Lower House.

The opposition was rendered toothless. TRT ideologues boasted that Thailand was heading for a two-party system, and the party could stay in power for 20 years.

Confident of his rural clout, Thaksin sneered at critics in public, often using his Saturday morning radio talk to the country to berate respected Bangkok intellectuals and economists.

But therein lies the rub that may have sent his stock crashing and, on last Tuesday (Sept 19), severed his hold on the premiership.

Analysts agree that Thaksin's monopoly on both economic and political power reduced the space of the Bangkok elite: old-money patricians, old-generation bureaucrats and influential intellectuals.

He had also alienated the Privy Council by simply ignoring them, a TRT insider told The Sunday Times last week.

Critics said that Thaksin had co-opted dozens of senators so the moderating influence of the Senate was neutralised. He ignored the National Human Rights Commission and let the National Counter Corruption Commission fall into disuse.

Furthermore, Thaksin co-opted almost all the electronic media, using it to dominate communication channels. He was perceived as autocratic and arrogant.

In essence, he had displaced generations-old power networks with new networks of his own. He placed loyalist police and army officers in key positions. An army that was finally professionalising had again become politicised - and in the end overthrew him in the country's first coup since 1992.

Yet if Thaksin's end was spectacular, his beginnings were anything but.

Although his father was a politician and his uncle a Member of Parliament who at one time served as a deputy minister, the young Thaksin was only a moderately successful businessman.

He joined the police force more as a stepping stone to greater things than as an end in itself.

That Thaksin was bright was never in doubt; he had finished at the top of his class in Thailand's police academy, and in 1979 earned a doctorate in criminal justice from Sam Houston State University in Texas.

Already well-connected, he married Pojamarn Damapong, daughter of Thailand's powerful Deputy Police Chief Samoer Damapong, with whom he has three children.

She would prove to be a key ingredient in Mr Thaksin's success story - something he often acknowledged in public with obvious pride.

Thaksin's first step into the big league was a mobile phone concession in 1990. His Shin Corp then built a telecommunications satellite.

As his net worth grew, riding the boom that lasted from 1986 to 1997, so did his political stock. He escaped the crash of 1997 relatively unscathed, but as he was already in government at the time, many believe he was tipped off about the devaluation of the baht and managed to hedge against it.

Thaksin served in two coalition governments before deciding that to be in politics on his own terms, he needed his own party.

Ideologues such as former journalist Pansak Vinyaratn, who wanted to fashion a 'new Thailand', joined him in creating the TRT.

At first, that was exactly what Thaksin seemed to be doing.

By July 2003, in his first term as prime minister, Thaksin stood before a huge Thai flag on national television and declared 'independence'' from the International Monetary Fund.

That month, a year ahead of time, Thailand paid off the last US$1.6 billion (S$2.5 billion) instalment of the US$12 billion loan it had taken to help survive the 1997 economic crisis.

Fuelled by spending and investment, the economy had recovered in earnest by 2003. In 2004, gross domestic product (GDP) growth was more than 6 per cent and exports grew 22 per cent. Last year, GDP growth slowed to 4.5 per cent and exports to 15 per cent - but the economy remained inherently robust.

A 2003 'war on drugs' in which more than 2,000 people billed as drug traffickers were killed, however, cast a pall over his administration. Several innocent people were killed by police, ostensibly by accident.

When a United Nations human rights rapporteur remarked on the death toll, the nationalist Thaksin famously snapped: "The UN is not my father."

In the south, he dismantled a joint military-police-civilian administrative structure, even though local residents reckoned it was working well. In 2004, the dormant Islamist separatist insurgency re-emerged.

Well over 1,300 people have been killed in the region along the Malaysian border since January 2004 in shootings and bomb attacks that security agencies have been unable to curb.

Thaksin appeared to condone a hardline response, which spawned a deep backlash and thoroughly alienated Muslims.

Then his family sold its controlling stake in Shin Corp to Temasek Holdings in January for 73 billion baht (S$3 billion). The family legally avoided paying tax on the income, and the lustre of his accomplishments lost more of their shine.

Detractors accused him of being unethical, saying he had made money from Thais and given nothing back.

The often flamboyant Thaksin's personal wealth alone was estimated by Forbes magazine this year at US$2.2 billion.

The Privy Council, whose power had grown over the years, embodied the old elite which became increasingly uncomfortable with Thaksin's growing fortune, style and power.

Earlier this year, in several speeches, Privy Council president Prem Tinsulanonda, 86, reminded Thais that their leaders should have high moral standards.

Thaksin was accused of disrespecting the King - an unpardonable act in Thailand.

The objections of the elite combined with resentment among intellectuals and the middle class.

"It is Thai Politics 101: You cannot have a prime minister who is too powerful," one political analyst remarked late last year as the movement against Thaksin began gathering pace.

Thousands under the banner of the People's Alliance for Democracy (PAD), led by disgruntled former supporters such as maverick publisher Sondhi Limthongkul and ascetic Major-General Chamlong Srimuang, took to the streets demanding that he resign.

The demonstrations succeeded in shaking Thaksin so much that he took to touring his up-country strongholds. There, even bigger crowds shouted their unwavering support for him: 'Thaksin, soo! Soo!', or 'Thaksin, fight! Fight!'.

'It was when he was up country that Thaksin felt most comfortable and could talk more freely about making a new Thailand,' recalled one TRT member who asked not to be named.

Well aware that violence would make the government look bad and could trigger a coup d'etat, Thaksin ordered police and the military to exercise restraint during demonstrations in Bangkok.

But fears of bloodshed grew as the high-stakes power struggle deepened. Society became divided in a manner not seen before, Thai analysts said.

Trying to short-circuit opposition in Bangkok - and the wild card of the army - Thaksin dissolved Parliament in February and called a snap election, hoping to renew his mandate. But Thailand's three largest opposition parties crippled the election with a boycott.

The impasse dragged on until last month when King Bhumibol Adulyadej, who has ruled for 60 years and is hugely influential, told the country's top judges to sort out the mess.

The courts swiftly annulled the April2 poll and said a new one should be held. In a dramatic decision last month, they found three election commissioners guilty of favouring the TRT - and jailed them.

The stakes mounted.

Alleged assassination plots and conspiracy theories gained ground. Military intervention was openly discussed as a means to break the impasse.

Thaksin appeared uncompromising - and so did the deep-seated movement to oust him.

Last month, a powerful bomb was found near Thaksin's house in a car driven by a junior army officer. Police called in senior army officers for questioning.

Chulalongkorn University academic Thitinan Pongsudhirak warned of a growing army-police showdown.

"The police are going to come out at the wrong end," he said.

His words proved prophetic. As Thaksin and his entourage were enjoying breakfast in New York last Tuesday morning, royalist army chief Sonthi Boonyarataglin seized his chance.

Outflanking the Premier's loyalist generals, he unleashed tanks and armoured Humvees into Bangkok in a swift and surgical operation.

Not a single shot was fired.

Last Friday, at a ceremony, King Bhumibol endorsed General Sonthi as the head of the new Council for Democratic Reform under Constitutional Monarchy.

Seated on the King's right was General Prem. His presence cemented the widely held belief that the powerful former premier had backed the coup.

Thais largely welcomed the coup because it defused the political stand-off - though many admit military intervention is undemocratic.

Thaksin has taken refuge in London with his eldest daughter, who is studying in England. His wife is in Bangkok with their son and other daughter. Tanks still surround his old office at Government House.

But the man whose personal motto is 'Better to die than to live like a loser' cannot be written off, say analysts who have studied his track record.

He still has a potential long-term power base in the north and north-east. And even as his party is in tatters and he, his family and several Cabinet colleagues are being investigated for corruption, one TRT member said: "He is not past tense yet."