Riding Thailand’s political bandwagon

Asia Times, Jan 12, 2006

Riding Thailand’s political bandwagon

By Daniel Ten Kate

BANGKOK - Pesky protesters are again waving the constitution in Prime Minister Thaksin Shinawatra’s face; their latest gripe is the pending free-trade agreement (FTA) with the United States.

Hundreds of protesters briefly disrupted talks between US and Thai officials in the northern city of Chiang Mai on Tuesday before police restored order. The five-day talks, the fifth round in the FTA negotiations, end on Friday.

Two months ago, the partial privatization of state-owned electricity firm EGAT Plc was the issue du jour, and a group of non-governmental organizations (NGOs) succeeded in getting the then-obscure Administrative Court to halt the initial public offering (IPO) dramatically a day before the company was to start selling shares.

Though it remains to be seen whether a Thai court will demand a similarly unexpected suspension to the FTA talks with the US, the issue appears to be headed down the same path. Like the failed IPO of EGAT (Electricity Generating Authority of Thailand), analysts said the Thaksin administration would only have itself to blame if the dissidents managed to stymie the trade talks.

"In the second year of his second term, Thaksin is finding that all of his major policy planks are facing opposition," said Thitinan Pongsudhirak, a political scientist at Chulalongkorn University. "The lack of public participation in decision-making has been pent up for five years now. Thaksin deserves this because he’s dismissed the consultation process from the beginning, and now it’s coming back to haunt him."

EGAT’s privatization and the US trade talks represent the most ambitious efforts of two of Thaksin’s core economic platforms: the privatization of state-owned enterprises and the proliferation of bilateral FTAs. So it is no surprise that both issues crystallize the wider debate on the state of democracy and the country’s development path.

In EGAT’s case, the pros and cons of privatizing state enterprises became moot after the government offered to sell EGAT employees discounted shares if they dropped their opposition to the listing. Though observers ticked off some long-standing complaints against the sale - particularly that an independent energy regulator was not in place and that the privatization would not result in increased competition - the IPO seemed inevitable in early November.

Then suddenly, a group of NGOs launched a constitutional challenge against the privatization, arguing that parliament had passed no law authorizing the executive branch to privatize state enterprises.

Egged on by the colorful opinions of Manager Media Group founder Sondhi Limthongkul, whose weekly political talk show turned into a must-see anti-Thaksin rally at Lumpini Park in central Bangkok two months ago, thousands of people, right or wrong, began to see the privatization as a vehicle to line the pockets of government officials and allow foreigners to take over Thai national assets.

It did not seem to matter that EGAT’s partial privatization was not setting any precedents and constituted a sale of only a quarter of the company. In happier times, the Thaksin administration managed to get state-owned energy giant PTT listed on the Stock Exchange of Thailand without any major hang-ups.

Similarly, the Thai-US FTA is by no means the first trade pact the country has negotiated. The Thaksin administration faced only limited opposition to its watered-down trade deals with India, China and Peru, and more complete agreements with Australia, New Zealand and Japan.

Subsequently, though, the Thai Senate Foreign Affairs Committee has argued that the Thai-Australia pact was never debated in parliament as required under Article 224 of the constitution. It plans to launch a legal challenge before the Constitutional Court.

It’s the politics ...
Just as the debate surrounding EGAT had more to do with due process than the benefits of privatization, so the current kerfuffle over FTAs is not a deep-seated intellectual debate about free trade.

The main opposition group, FTA Watch, for example, often jumbles together legitimate concerns over intellectual property rights and drug prices with non-FTA related issues, such as EGAT’s privatization and Thaksin’s invitation to foreign firms to bid on the government’s multi-billion dollar megaprojects.

Now the same group of people that threw a wrench in EGAT’s plans intend to file lawsuits with several courts, alleging that the government is violating the constitution by entering into an agreement with a country that will require substantial changes to domestic law without first getting approval from the National Assembly.

Though any such lawsuits would tread uncharted waters, any delay in the talks could be significant, given that the leaders of both countries have said they want to wrap things up this year.

US President George W Bush’s authority to negotiate bilateral trade pacts that can receive an up-or-down vote in the US Congress expires in 2007, and given that 2008 is an election year in the US and Bush will be fighting off lame-duck status, it is uncertain that US lawmakers will renew that privilege.

Ironically, Thai government officials seemed just as negative about a trade deal with the US six months ago as their current critics do now. Back then, senior officials privately questioned whether the country would benefit from a deal, and a senior trade negotiator, Winichai Chaemchaeng, said negotiations with the US could drag on "for two to three more years".

In September, chief Thai negotiator Nitya Pibulsonggram told reporters that he was not operating under a time frame, but Thaksin changed all that a few weeks later when he met with Bush and agreed to make "vigorous efforts" to conclude the deal some time this year.

Thai trade negotiators have been relatively quiet since then, allowing groups such as FTA Watch to steal headlines with fear-mongering catch phrases such as "FTA kills farmers" and "Life is not for sale".

Since the acronym "FTA" easily fits onto bumper-sticker slogans that take highly complex issues and grossly misrepresent them in five words or less, it becomes all the more important for the government to lucidly explain the merits of signing a trade deal with the US. But similar to the explanations given for EGAT’s privatization, government officials have not clearly told the public how the country will benefit from the FTA.

Most of the public statements by ministers are general assertions that they will not sign a deal that is not in the country’s best interests.

But while that approach may have worked when the government’s popularity was soaring, the erosion of public support due to corruption scandals and conflicts of interest has made it essential for government officials to toss aside their vague reassurances and state unequivocally why Thailand needs a trade deal with the United States.

Barring a coherent and transparent explanation of government strategy, the opposition is only likely to get louder. "The government has used a very narrow group of people to handle the deal and kept information from the public, which is why the protests are still considerable after nearly two years of negotiations," said Sompob Manarangsun, a political economist at Chulalongkorn University.

source: Asia Times