Thaksin agenda faces challenges as leadership style and poll promises come under scrutiny

Prime Minister Thaksin Shinawatra's bold promises to lift Thailand into a new era of rapid development and political openness may be wobbling in the face of grim reality.

His pre-election scheme to sort out the country's differences with Burma's prickly generals in a face-to-face encounter appeared to evaporate at the weekend as the military showed him damning photographs of alleged development in the chief 'drug town' across from Thailand's northern border. Mr Thaksin demanded Rangoon explain its role in the thriving town.

Burma hit back yesterday, accusing Thailand of making a pro-Rangoon tribal army based in the town the scapegoat for its own narcotics problems. A junta spokesman claimed crime syndicates and drug-dealers were 'thriving and also being protected' in Thailand.

Instead of broaching a new relationship with Burma, the new Government has been forced to adopt a posture of suspicion. Mr Thaksin ordered the formation of a high-powered committee to tackle the drug menace.

'The new premier said he would bring in CEO government, but politics is much more complicated and awkward than business. If Thaksin's style is simply to assign a committee to every problem then the honeymoon period is going to be short,' a Thai political analyst said.

The Government's pledge to reinvigorate the economy by injecting money into the countryside and relieving the banks of bad debts appears less exciting to Thais now that they are getting a chance to read the small print.

The scheme to relieve the banks of their debt burden now appears unlikely to trigger a new wave of lending, as promised by the new leader. Instead, the move is seen as helping to ease the pain of several indebted fat cats.