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Politics
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2006-10-03 12:32:14-04
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Thai PM pledges happiness but investors want growth
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Bangkok, Oct 3: Thai Prime Minister Surayud Chulanont's pledge to put "people's happiness" above economic growth may not be a sign for foreign investors to hit the panic button. But it's unlikely to draw them in the short term to a country where economic growth has slowed this year, under pressure from high oil prices and a political crisis that has delayed the national budget and billions of dollars in infrastructure projects. Thai business leaders and investors yesterday welcomed their new prime minister amid hopes that the military-backed leader will shore up confidence in an economy rocked by months of political crisis. The generals who ousted Thaksin Shinawatra in a Sept. 19 coup on Sunday appointed General Surayud Chulanont, a 63-year-old former army chief, as the new prime minister until elections promised for October next year. "His appointment was good news for the Thai economy," said Santi Vilassakdanont, chairman of the Federation of Thai Industries, the country's largest business group. "After months of political turmoil, we see Surayud as someone who can unite Thailand. He is clean and transparent, and we hope that his appointment will boost investors' confidence," Santi said. Santi was one of 60 experts tapped by the military to guide them on economic, foreign, governance and reconciliation policies following the coup against Thaksin whose rule had led to increasingly bitter divisions. Sukhbir Khanijoh, an economist at Kasikorn Securities, said investors would see Surayud, a widely respected career soldier, as "a stabilizing force for Thai politics." The bloodless coup capped months of political protests demanding Thaksin's resignation over alleged abuse of power and corruption. "After welcoming Surayud, the market is waiting to see his Cabinet ministers," Reuters quoted Sukhbir as saying. "But overall, investors were happy to have Surayud as the new prime minister because right now the nation needs reconciliation and he is the most suitable leader to do so," Sukhbir said. But the junta's pick of Surayud failed to boost Thai share prices yesterday as after an initially firm start, investors sold stocks instead to raise capital ahead of the initial public offering (IPO) of China's largest bank. The Stock Exchange of Thailand composite index fell 2.04 points or 0.30 percent to close the morning session at 684.06. "Investors had already expected Surayud to become the next prime minister, so there was no surprise in the market," said Sukit Udomsirikul, a senior market analyst at Siam City Securities. "Rather than the Surayud factor, investors were driven by the ICBC factor," Sukit said. "Many investors were selling bank-related shares to prepare for ICBC's IPO." The Industrial and Commercial Bank of China plans to list in Shanghai and Hong Kong on Oct. 27 in what could be a world-record initial public offering worth some US$20 billion. Surayud had said in his first news conference on Sunday that he would not measure economic progress based only on GDP. "I will focus on the happiness of the people rather than GDP," he said. Central bank chief Pridiyathorn Devaluka, a key economic adviser for the junta, said he agreed with Surayud and called for economic reforms focusing on income distribution rather than boosting the economy. "The country's progress is not measured only by economic growth," Pridiyathorn was quoted as saying by the Nation daily yesterday. "There is something more than just figures." He has asked for a week to select a new Cabinet, saying he was looking for "people who are politically neutral, knowledgeable, competent and willing to work." Thailand's generals have reserved for themselves the right to look over his shoulder and even sack him in a new interim constitution they approved over the weekend, raising concerns about his independence. Thai media has speculated that central bank chief Preediyathorn Devakula -- who had earlier been tipped for the PM's post -- could become finance minister and that former premier Chavalit Yongchaiyudh could serve as a "security adviser." The junta, which has limited many civilian freedoms since the coup, renamed itself the National Council for Security to oversee the activities of the new government, which they have pledged will rule until elections are held late next year.
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