Critiquing Thaksin, II: Corruption Charges

We now consider the second general set of criticisms of Thaksin’s regime in Thailand: that Thaksin was a corrupt leader who used his political power primarily to advance the business interests of his family.

Exhibit A in this line of criticism is the enormous growth in the value of the Shin Corporation, the telecommunications conglomerate formerly owned by Thaksin, during his time in office, and the tax-free sale of that same company to a conglomerate owned by the Singapore government at a huge profit in early 2006, shortly after the law was changed to permit more foreign control of telecommunications companies. The military government has been freezing assets related to that sale over the past two months; see this piece from the Asia Sentinel for a thorough overview of the case that is relatively sympathetic to Thaksin’s position.

There is a consensus among academics studying Thailand that business and politics are deeply intertwined, and that Thaksin’s regime is a perfect example of this. This is a central theme of both of the major scholarly English-language books on Thaksin’s regime (Pasuk and Baker’s Thaksin and McCargo and Pathmanand’s Thaksinization of Thailand)), and another Thailand scholar, Chris Dixon of London Metropolitan University, has described Thaksin and his Thai Rak Thai political party as “representatives of the small group of Thai-Chinese corporations in which business power is becoming concentrated.”

Thaksin’s initial fortune was made on the basis of government contracts and concessions, and he clearly has had a personal financial stake in the actions of the Thai government for many years. McCargo and Pathmanand report that the value of Thaksin’s holdings increased six times over between 1995 (when Thaksin entered high-level politics as Foreign Minister) and 2003—this despite the Asian financial crisis of 1997-98 that caused major damage to many of Thaksin’s competitors.

By 2003 the prime minister’s family holdings amounted to nearly 9% of the total value of the Thai stock market, a staggering figure by Western standards. It is fair to say that Thaksin did not simply run the country as its elected leader; he in large measure owned it too, or at least a large chunk of it. Moreover, his policies have generally been interpreted as supporting big business and as embracing a corporate approach to politics.

The legitimacy of Thaksin’s exercise of political power at the same time his family or close associates have owned enterprises that do business with the government was a matter of controversy—most notably, a 2001 court case that narrowly was decided in Thaksin’s favor—for many years prior to the coup.

Indeed, the military junta cited “corruption” as a primary rationale for removing Thaksin from office last September. As many as fourteen specific suspected cases of corruption against Thaksin have been identified for investigation, and one case, involving the alleged below-market sale of government real estate to Thaksin’s wife, has been formally brought to court. In another case, Thaksin’s government granted a loan to the Burmese government for telecommunications infrastructure improvements; Shin Satellite then won contracts from Burma paid out of those same funds in what is alleged to have been a rigged or biased bidding process. (See this special section from The Nation for an overview of the various corruption allegations and summary of the legal status of each.)

The close intertwining of business and politics in Thaksin’s Thailand is beyond dispute. Yet the corruption charges brought against Thaksin are not the ones that bother the English press or the human rights groups with respect to his takeover of Manchester City. Rather, the more common view is that getting rich off political connections and using political power to strengthen business interests is just the way things are done in that part of the world.

Ironically, however, it is precisely these corruption charges that present the most immediate legal threat to Thaksin. If Thaksin is convicted in Thai courts on any of the possible charges against him, it would trigger a review by the Premiership of his status under the “fit and proper persons” standard. But the likelihood is that any such conviction while the military junta is still in power is not likely to carry much force in England.

But matters may be different if he is found guilty by Thai courts in a post-election Thailand. At that point, Thaksin would be more likely to be regarded as a “fugitive from justice.”

That scenario obviously would carry major implications for Manchester City. The likelihood of its actually transpiring is more difficult to assess, and will depend upon factors impossible to predict at the moment, such as the nature of the next Thai government and its attitude towards Thaksin. Plausibly, the next government may simply not be interested in digging up the past and bringing such charges against Thaksin, and prefer to simply get on with things rather than re-hash old controversies.

From the point of view of City fans, the more disturbing conclusion to draw from consideration of these corruption charges is not the (probably small) likelihood of the new chairman one day being hauled away to prison, but the more general concern that many close observers of Thai politics regard Thaksin as someone who operates, at the end of the day, in a self-serving manner geared towards benefiting his own political and financial interests.

That would be a worrying trait for an owner of a football club to have, from the fans’ perspective. Most City fans at the moment are very much inclined to give him the benefit of the doubt on this point, however, given the very substantial investments in rebuilding City’s squad Thaksin has already financed.

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One Comment on “Critiquing Thaksin, II: Corruption Charges”

  1. nganadeeleg Says:

    In addition to the obvious policy corruption, the use of tax havens and maid & other nominees is hardly acceptable behavior for a businessman, let alone a politician, particularly a PM.

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