ASEAN KEY DESTINATIONS
Promises, handouts fly in Thai campaign
They use strong marketing tools to lure misinformed people into playing harmful games. Other parties' platforms are similar, but they are mini-casinos compared with Pheu Thai.
Economists, the business community and sensible voters have all voiced concerns. Many have predicted that Pheu Thai's populist policies, such as large amounts of "free cash" and easy loans, will move the country towards a public debt crisis like countries in Europe are now facing. Inflation may also get out of hand.
Former prime minister Thaksin Shinawatra and top adviser Olarn Chaipravat are believed to be the key designers of a game aimed only at winning, with no room for losing to their arch-rivals, the Democrats.
Whatever the Democrats propose, Pheu Thai has to top. For example, the Democrats have proposed increasing minimum wages by 25 per cent in two years. So Pheu Thai has offered Bt300 per day. Fierce competition between the two largest parties has encouraged a small party, Chart Pattana Puea Pandin, to offer a Bt350 minimum wage.
Pheu Thai has also tried to trump other Democrat offers: housing loans, price subsidies, debt refinancing and assistance to farmers. But the wage hike is the most controversial policy, as business groups are worried about rising production costs and productivity not catching up. Korn Chatikavanij, deputy leader of the Democrat Party, defended his proposals by arguing that tax allowances would be applied to those agreeing to increase wages.
Olarn argues that the rises are part of a package to improve productivity. "It's well thought out and quantified," he promised. He is promoting an economic growth model driven by the grassroots. Thaksin and other members of the party have also claimed mega-projects would generate fast income - so don't worry about debt.
Are their words convincing?
Olarn may have miscalculated this time, just as he did when he nearly bankrupted Siam Commercial Bank (SCB) in the 1997 financial crisis.
Before the crisis, he was president of SCB, which loaned aggressively, creating a bubble in property and other sectors. Olarn was also chairman of the Thai Bankers Association, which fully supported the central bank defending the baht at all costs.
The result was the currency collapsed and the International Monetary Fund had to bail out Thailand. The Finance Ministry and Financial Institutions Development Fund, an arm of the central bank, had to bail out SCB and many other financial institutions.
Of course, other people also made serious mistakes at the time. But while others have learned the lesson, Olarn apparently has not.
Thaksin's motivation for large-scale populist policies may be to "un-do" the actions of the military after the 2006 coup that culminated in the confiscation of a large chunk of his personal assets early last year because of corrupt actions while he was PM.
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