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Cablegate: Mixed Reviews for New Pm Somchai's Economic Team

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DE RUEHBK #2943/01 2701035
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P 261035Z SEP 08
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC PRIORITY 4501
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY
RUEHCHI/AMCONSUL CHIANG MAI PRIORITY 5672
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UNCLAS SECTION 01 OF 02 BANGKOK 002943

SENSITIVE
SIPDIS

STATE PASS TO USTR

E.O. 12958: N/A
TAGS: ECON EFIN PGOV PINR TH
SUBJECT: MIXED REVIEWS FOR NEW PM SOMCHAI'S ECONOMIC TEAM

REF: A. BANGKOK 2927 (ROYAL ENDORSEMENT)
B. BANGKOK 2899 (NEW APPOINTMENTS)
C. BANGKOK 2357 (RESHUFFLED CABINET)
D. BANGKOK 409 (NEW CABINET)

BANGKOK 00002943 001.2 OF 002


1. (SBU) Summary: Prime Minister Somchai's selections for his
Cabinet's economic team have come under attack from the local
press and business community. Controversial appointments
include the placement of former Interior Minister Chalerm
Yubamrung at the Ministry of Public Health, former Police
Chief Pracha Promnok at the Ministry of Industry, and others
who do not appear to have any particular qualifications for
the jobs. Aside from the placement of MIT-trained economist
Olarn Chaipravat as Deputy Prime Minister in charge of
economic policy, our contacts in the business community
believe that Somchai assembled an uninspiring economic team
because he was unable to attract any economic heavyweights
willing to give up their lucrative private sector
affiliations, or put their personal reputations on the line,
for a seat in what all observers believe will be a
short-lived government. This group will likely be
administrators, rather than leaders -- unlikely to push
forward any new initiatives. End Summary.

ONE BRIGHT SPOT
---------------

2. (SBU) Deputy Prime Minister Olarn Chaipravat, who will
manage the new government's overall economic policies and
likely oversee the Ministries of Finance, Industry, Commerce
and Energy, has been hailed as Somchai's most positive
selection for his economic team. An economist who trained at
the Wharton School and MIT and former president of Siam
Commercial Bank (SCB), Olarn is respected in the Thai
financial world. He was considered several times for cabinet
positions in previous governments, but this is Olarn's first
foray into the cabinet. Olarn was criticized for his
aggressive investments while president of SCB prior to the
1997 financial crisis ) actions that resulted in his
resignation. Olarn was one of former Prime Minister
Thaksin's primary economic advisors and the director of
several state enterprises during his administration. The
Bangkok press speculates that Thaksin was behind his
appointment.

3. (SBU) Finance Minister Suchart Thadathamrongvech happily
accepted a promotion from his former position as Deputy
Finance Minister during the Samak Administration. However,
banking leaders we talked to expressed nervousness at
Suchart's appointment, not so much over his lack of
experience but rather over his temperament. Suchart gained
some notoriety in the banking community when he called for
the resignation of Bank of Thailand (BOT) Governor Tarisa
Watanagase after the central bank raised interest rates in
July and August. A leader of a Thai commercial bank noted to
econoff that Suchart's "very un-Thai" public criticism of the
BOT Governor does not bode well for Suchart's ability to
attract, or at least calm, international investors. Suchart
reportedly is a strong follower of the economic views of
newly-appointed Deputy Prime Minister Olarn Chaipravat and
Virabonga Ramangkura, a chief economic advisor to former
Prime Minister Samak, and shuns the views of others who
disagree.

SOME RETURNEES, A MIXED BAG OTHERWISE
-------------------------------------

4. (SBU) Some familiar faces from the Samak administration
survived the jockeying among the various political parties in
the ruling coalition (ref A). Chaiya Sasomsap and Santi
Prompat will remain at the head of the Ministries of Commerce
and Transport, respectively. Others who will continue
include Information and Communications Technology Minister
Mun Patanotai, Labor Minister Uraiwan Theinthong, and
Minister of Science and Technology Wuthipong Cahiseaeng. The
rest of the economic team is an odd mix that even Somchai
himself characterized to the press as "mismatched" --
Wannarat Charnnukul, a medical doctor who received his
Master's in Public Health at the University of Hawaii, was
appointed Minister of Energy, for example.

5. (SBU) Industry Minister Pracha Promnok, another puzzling
choice, is a former Chief of the Royal Thai Police with no
background in trade, commercial or economic affairs. Our

BANGKOK 00002943 002.2 OF 002


business contacts at the Thai Chamber of Commerce expressed
concern over how Pracha will function as the new Minister of
Industry with so little business experience. He was a
prominent police officer for many years known for his social
development and outreach in poorer regions of the country and
entered government in the Thaksin coalition in March 2002 as
the Deputy Minister of Public Health.

6. (SBU) Somchai's most controversial pick on the economic
front was firebrand ex-cop Chalerm Yubamrung as Public Health
Minister. Largely viewed as a divisive politician, Chalerm
was former Prime Minister Samak's first Interior Minister
before he was displaced in the August Cabinet reshuffle.
With no health background or experience, his views on key
public health issues, such as compulsory licenses to break
pharmaceutical patents, remain unknown.

7. (SBU) Our contacts in the business community believe that
Somchai assembled an uninspiring economic team because he was
unable to attract any economic heavyweights willing to give
up their lucrative private sector affiliations, or put their
personal reputations on the line, for a seat may be a
short-lived government. It is unlikely that this
"mismatched" group will push forward any new economic
initiatives, but rather will maintain the status quo with
similar positions as the previous Samak administration.
JOHN

© Scoop Media

 
 
 
 
 
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