That $1.4 billion is ours! Corruption and Democracy in Thailand
Former Thai PM Thaksin Shinawatra is at the centre of what is undoubtedly one of the biggest and most important cases of political corruption that the world has ever seen. He and his family have been accused of becoming suspiciously rich during his tenure as PM.
The straw that broke the camel’s back was when he sold his 49.6% stake in Shin Corp. (the country’s telecom giant) to the Singapore government’s investment arm (Temasek Holdings). So a foreign entity now has a very large stake in a the crown jewel of Thai companies. Then, to top it all off, Thaksin and his family did not pay a penny in capital gains taxes on this $1.87 billion deal. Not illegal, just unethical. And not setting a very good standard as leader. (This is the pot calling the kettle black considering our poor regulation of banking bonuses.) Here is an interesting discussion of the issue on the Time Magazine site.
Well, today was judgment day. Out of Thaksin’s US$2.3 billion of frozen assets, $1.4 billion was confiscated by the Thai Supreme Court. Here is The Guardian’s summary of the court’s decision:
The court ruled that Thaksin illegally concealed his ownership of stock in Shin Corp, the family’s telecommunications empire, and abused his authority by crafting government policies to benefit Shin Corp’s businesses.
The court addressed five cases of alleged “policy corruption” and ruled that in four of the five Thaksin was guilty of abusing his authority during his 2001-2006 tenure as prime minister.
One of the most prominent cases involved a $127m low-interest government loan to Burma in 2004, which the court ruled Thaksin had endorsed with the intention of securing its purchase of satellite services from Shin Satellite, then controlled by Thaksin’s family.
Thaksin’s government billed the loan as a way to help the impoverished military-run country finance telecommunications projects.
The court ruled that Thaksin’s government set domestic satellite policies that benefited his businesses.
It also ruled that a policy to convert part of a telecommunications concession fee into an excise tax favoured Shin Corp at the expense of the state.
Now you would think that Thaksin’s efforts to escape the courts would earn him the wrath of his people, but no! He has a massive following and remains hugely popular in rural areas (mostly the North). His supporters are still extremely loyal to him because of the successful and popular policies that he put in place to reduce poverty. These included “the country’s first universal healthcare program, the 30-baht scheme [a health insurance program], as well as a controversial but highly popular drug suppression campaign.”
His supporters are crying after today’s announcement. Can you imagine weeping openly in public if this had happened to Stephen Harper or Gordon Brown or Barack Obama? Ok, maybe Barack Obama.
The man is invincible. And it’s easy to see why…. he is the rare politician who has given voice to the poor and then implemented real policy changes to make their lives better. From their perspective, he was actually able to make a substantive difference to their quality of life– that makes him worth fighting for.
Still, what does all of this mean for the state of Thai democracy? Here is a quick summary of the mess that the country is in:
Mr. Thaksin sold Shin to the Singaporean holding company Temasek in January 2006, a transaction that evaded taxes and aroused anger and prompted street demonstrations that set the stage for the coup nine months later.
When the generals relinquished power in a new election a little more than a year later, a party backing Mr. Thaksin was overwhelmingly elected.
Protests resumed, and in August 2008, thousands of anti-Thaksin demonstrators, known as yellow shirts, barricaded the prime minister’s compound, setting up a tent city and demanding that the government be dissolved. In late November they took over Bangkok’s two airports for a week, stranding thousands of passengers.
They ended their protests in December when a court found the pro-Thaksin governing party guilty of electoral fraud, forcing its dissolution. The current government, led by Prime Minister Abhisit Vejjajiva, took office in a parliamentary vote.
Since then, it has been the pro- Thaksin protesters who have been demanding the dissolution of what they call an unelected government.
I guess this is what they mean when they say that new democracies experience some pretty substantial growing pains. This is a polarizing divide, largely along class lines– and it’s only going to get worse. The demonstrations have gotten violent before and this judgment is only going to add fuel to the fire. Thaksin’s red shirt movement is expanding and restructuring.
It seems like Thai democracy has been able to withstand these destabilizing moments in the past because of the military and the monarchy– these two institutions have provided the necessary anchor to prevent things from getting out of hand.
This makes me look at both of these institutions in a new light– particularly the military– as a stabilizing force rather than a destabilizing force as has often been the case in Africa (for example, see the post on Guinea). It also makes me wonder if the Queen (and the monarchy) might be worth keeping for that reason… as a form of destabilization insurance.
All in all, it looks like it’s been a good day in the fight against corruption.