Pain in Thailand
To lose one finance minister may perhaps be bad luck. To lose five in two years during the terms of three administrations smacks of plain bad government.
This is a reasonable conclusion to draw from the departure of Thailand's finance minister, Amnuay Viravan, on Thursday. His exit highlights the parlous state of politics in the country, and leaves the battered economy again floundering for direction.
The Prime Minister, Chavalit Yongchaiyudh, should be congratulated for acting quickly to plug the gap left by the departure. The markets appeared to appreciate his speed, and were given a respite from the pounding they have endured for the past 18 months which has knocked 60 per cent off their capitalisation. But the fundamentals look bleak; unless drastic action is taken, worse is yet to come.
During his short time in office, Mr Amnuay attempted to wrestle with the basic economic problems which plague the financial and manufacturing sectors. But like all his predecessors, Mr Amnuay fell victim to a chronic problem in the Thai political system: a desire to embrace compromisers rather than accept leaders with a vision. It is economic authority which Thailand needs more than ever if it is not to plunge to even lower depths.
The question is whether the new Finance Minister, Thanong Bidaya, has this authority. His long background in banking stamps him as a figure of experience as a financial manager - but does he have the political savvy to navigate the treacherous political waters which surround Bangkok? The conclusion in the capital yesterday was that he does not, but that he was the best possible candidate. The disturbing thing was that he was inevitably described as a compromise choice. The malaise in Thailand cannot be cured by some sort of half-hearted solution which meets immediate political needs but leaves the long-term problems.
The new man must act swiftly and decisively with a raft of measures to secure the financial system and offer hope that the weaknesses in its manufacturing base can be overcome. A devaluation of the baht appears to be the only alternative and the Government must pay greater attention to international support for such a move if it is not going to suffer even greater erosions of confidence in world capitals.
As one Hong Kong analyst remarked recently: 'The Thai Government will not listen until a major bank collapses.' The events of the past 48 hours sadly indicate there could be something in this bleak forecast.