06 March 2008

Thinking about Thaksin

Thaksin Shinawatra returned to his homeland, Thailand, on February 28.

He has been in exile for a year and a half, when Thaksin -- the prime minister then -- was deposed by a military coup.

The junta stepped aside peacefully last year, arranging for elections, and a new incarnation of Thaksin's political party won those elections, as the leader of a six-party coalitions.

Six-party coalitions can be fragile things, so although the new prime minister (Samak Sundaravej) is an associate of Thaksin's, it's a bit much to speak of Thaksin, as some have, as the "kingmaker" in this situation.

Indeed, Thaksin is under something of a cloud himself. He has returned not in triumph but to face criminal charges arising out of his time in office.

One charge involves a 2003 land deal. While Thaksin was PM, his wife bought a plot in Bangkok from the central bank's distressed-asset fund. The accusation is that this was something more than just a sharp bit of dealing by a woman who just happened to be married to the prime minister, but that it was an inside fix.

The other charge relates to the events that set off the military coup. In 2006, the Shinawatras sold their interest in a computer company, Shin Corp. (they owned 49.5% of its equity) to Temasek Holdings, the sovereign wealth fund of the government of Singapore, for about US$1.9 billion. They paid no capital gains tax on this sale. It appears that under Thai law they were exempt from the tax, although the legality of it may only make it more scandalous than otherwise.

Also, Thailand's SEC found that the couple's son, Panthongtae Shinawatra, violated some of its disclosure rules in connection with the Shin Corp. transaction.

Such points are mere technicalities, though, compared to the issue of who bought the company the family was selling. One of their political opponents said that Thaksin was worse than Saddam Hussein for not protecting the Thai economy from foreigners: "Dictator Saddam, though a brutal tyrant, still fought the superpower for the Iraqi motherland," whereas Thaksin was selling out his motherland to Singapore.

Although there were lots of other reasons various factions were unhappy with Thaksin, as there always are, it was the Shin sale that sent people into the streets. Mass anti-Thaksin demonstrations, answered by mass pro-Thaksin demonstrations, created the climate of disorder that, in turn, created at least a plausible pretext for the coup that autumn.

Now he's home, and this Wednesday, March 12, 2008, Thaksin will appear in court to answer charges related to the 2003 land deal.

Conclusions? I have none to offer, except that all states are failed states. Pragmatism should dictate that we find ways to order our affairs without reliance upon hierarchy, sovereignty, and superstition. Anarcho-capitalism. Catch the fever.


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