Published on August 7, 2009

AFTER six months in office, Prime Minister Abhisit Vejjajiva's popularity appears to have overtaken that of his Democrat Party. He is probably the most popular Democrat leader ever. But popular sentiment should not be equated with leadership quality. Abhisit's leadership remains an open question.

The prime minister bragged yesterday that his government has made more than 100 achievements over the past six months. When he came to office, the Thai house was on fire. He has put out the fire. From now on, he says, he will work harder to overcome social divisions and rebuild the country.

"From the start, I realised it was my duty to overcome a crisis of unprecedented proportions. Hence I have pledged my government will work harder than ever before in order to serve the public and to bring happiness to Thai citizens," he said.

He has not yet put out the fire.

But is Abhisit really up to the task? Based on his tackling of the economic problems, the political crisis and the social divisions so far, I don't think that his performance is up to par yet.

On the economic front, Abhisit and his policymakers are still trying to find their way in the dark. Korn Chatikavanij, the finance minister, comes from the financial sector and does not pay enough attention to the real macro picture. They all hold on to the belief that global capitalism remains sound. Sometime in the near future, the global economy will recover. This will help pull Thailand out of its negative growth of 3 to 5 per cent this year.

Based on this optimism, the Abhisit government has devised economic stimulus policies that support the industrial and export sectors. For instance, the Finance Ministry announced the other day that it would ask specialised financial institutions to boost credit extended specifically to the tourism, export and automotive sectors from Bt625 billion to Bt925 billion. This instinct for spending has gone overboard to the extent that the government plans to create further public debt of Bt800 billion. This will be part of a Bt1.5 trillion stimulus package earmarked for spending over the next three years to bring the economy back on track.

You can see that most of the stimulus spending is targeted toward the modern sector of the economy, which has benefited enormously over the past five decades at the expense of the farming sector. We still have 40 million Thais living in the farming sector, which accounts for only 10 per cent of the gross domestic product.

The prime minister and his team have forgotten to ask themselves hard questions: "What if the global economy won't recover for long years to come? How will we survive or manage the country to stay afloat?" This assumption is justified.

If the government adopts this assumption, it will use this world crisis as an opportunity to lay the foundation to reform the entire Thai economy. The priorities should be given to the farming sector and alternative energy so that in the worst-case scenario, Thailand will still survive because we have food surplus and we are self-sufficient in energy.

 If we reform the farming sector by getting rid of the middlemen and the monopoly structure, higher incomes will benefit 40 million Thais. If they have a better standard of living, the country as a whole will enjoy political stability. Vested interest is so tightly knitted that it is virtually impossible to tackle this problem unless the prime minister exerts the political will to break up the monopoly.

 Investment in the alternative energy sector will create jobs and provide a long-term foundation for the country so that we do not have to import more crude oil. Over the past two days there have been important announcements. First, Taiwan-based Topco Scientific expressed interest in investing Bt10 billion to start up an integrated solar-cell plant in Thailand, most probably in Rachaburi. Second, Wind Energy Holding, a Thai firm, is emerging as a major wind power generator, with four or five projects on the cards that will require a combined investment of Bt10 billion. These are the types of investments that will strengthen Thailand's future, not to mention other bio-fuel projects which have yet to get off the ground

On the political front, Abhisit still has a lot to prove. He must handle the assassination attempt against Sondhi Limthongkul carefully. After initial hesitation, he succeeded in removing Pol Chief Patcharawat Wongsuwan. This allows Pol Gen Thanee Somboonsap a freer hand to bring charges against the suspects, who include five generals and one middle-level police officer. If the arrest warrants are issued, we'll see the masterminds behind the Sondhi case. A military intervention is on the cards if the case were to develop to that point. If Abhisit moves forward with the Sondhi case, his premiership will be in danger. If he drags his feet, the yellow shirts will go after him.

Abhisit is also muddling through the social divide, most recently arising from a campaign by the red-shirted supporters of Thaksin to sign up seven million people to petition to His Majesty the King for Thaksin's pardon. Abhisit, the military, the police and other social networks have been slow to react to this campaign, which is wrong both morally and legally. We can't morally offer a pardon to a fugitive. The Thai system does not give room to a fugitive who does not repent. The red shirts plan to submit the petition on August 17.

There is a danger that the petition drive might converge with the release of the investigation results into the Sondhi case - to create an explosive incident to justify a military intervention.

The Thai house is still on fire. Abhisit has yet to put it out.

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