For Thaksin Shinawatra, 2001 was to be a year of change, a chance to implement his sweeping visions for fundamental change of the economy, of politics and of the very roots of society.

At the start of the year, hopes and public confidence rode high that Mr Thaksin, armed with the biggest electoral landslide since Thailand adopted democracy in the 1930s, would be able to lead the country into a new phase of prosperity.

The campaign philosophy of his Thai Rak Thai Party relied on several key pillars aimed at tapping into the resentment of rural voters to what they felt was years of neglect. Development policies would no longer be structured at entrenched power groups in the cities _ universal, low-cost health care, a farm debt suspension plan and new support programmes for small businesses were promoted directly at the lower rungs of the economic ladder.

Yet by the end of the year, hope had turned largely to disappointment, as implementation of the government's programmes were stalled by political infighting, bureaucratic inertia and a slowing domestic and global economy.

THINKING DIFFERENTLY?

Most observers do give Mr Thaksin and the new government credit for rapid progress, by usual standards, in translating out his campaign promises into policy action.

Within days of forming the Cabinet in February, Mr Thaksin had launched the first of what would be numerous "workshops" _ brainstorming sessions attended by senior technocrats, industry leaders and government ministers to identify existing problems, discuss solutions and implement timeframes for action.

But dogging Mr Thaksin and his ability to implement change for much of the first half of the year was his asset declaration case before the Constitutional Court. A guilty verdict would have meant political limbo, with Mr Thaksin potentially banned from office for five years.

After the case ended in August with a controversial 8-7 decision acquitting Mr Thaksin, the government's wheels began to move more rapidly, with Thai Rak Thai given a free hand to use its huge parliamentary majority to push through the legal and administrative changes needed to accomplish its policy priorities.

Top executives at the Bank of Thailand, state banks and state enterprises were changed to bring in "team players". Two respected civil servants, central bank governor M.R. Chatumongol Sonakul and commerce permanent secretary Krirk-krai Jirapaet were removed for failing to see eye-to-eye with the government.

The Thai Asset Management Corp was formally established, tasked with restructuring over one trillion baht in bad loans. Even so, banks remained reluctant to lend into an uncertain economic environment.

To compensate, policymakers directed state-owned banks, led by the Government Savings Bank and Krung Thai Bank, to ramp up their lending activities, including community-targeted programmes such as the People's Bank microfinance scheme and loans to new graduates and unemployed workers to finance new business start-ups.

The village investment funds programme, which establishes a one-million-baht revolving fund for 70,000 villages nationwide, was also launched, positioned as a capital source to finance local business and development programmes.

Other high-profile policies such as the 30-baht national health-care programme and the "One Tambon, One Product" scheme were also implemented, although results remain mixed.

With most of the programmes unlikely to show any genuine change for several years, the government also established a 58-billion-baht emergency spending programme to help jump start the economy in the face of a rapidly deteriorating external environment.

Funds would be aimed directly at creating new jobs, enhancing labour skills and ultimately increasing the country's competitiveness in the global market.

Exports, the main engine of growth since the float of the baht in 1997, are predicted to contract by nearly 7% in 2001, a sharp reversal from the 20% growth posted the year before.

Economic slowdowns in the US, Europe and Japan helped reinforce the government's focus to build up the domestic economy. Even so, the global economic downturn, falling exports and depressed commodities prices dashed any hopes by the government of a rapid recovery.

Overall, economists agree that the Thailand is set for growth of just 1.3% in 2001. Rising unemployment, estimated now at nearly two million people, has put further pressure on social programmes and economic activity.

SEPT 11 The events of Sept 11 only reinforced the challenges faced by the government. The terrorist attacks on the World Trade Center and the subsequent military action in Afghanistan led to a shock for the tourism industry, one of the country's largest sources of foreign exchange earnings.

Before September, policymakers had placed high hopes on boosting tourism to help compensate for the decline in exports. But with the global aviation industry in full retreat, tourism revenues for the fourth quarter, the industry's high season, look unlikely to be bright, despite government efforts to promote Thailand as a "safe" destination.

One administrative change within the Cabinet following the September attacks was the elevation of Finance Minister Somkid Jatusripitak to deputy premier.

The changes, which also included the transfer of the education portfolio to deputy premier Suvit Khunkitti, made Dr Somkid the sole arbitrator for economic affairs.

Going into 2002, the main priorities are in implementation, whether it be in state enterprise privatisation, budget planning and disbursement or in programme fine-tuning.

State enterprise privatisation was launched in the fourth quarter with generally positive results, with initial public offerings for both Internet Thailand and PTT Plc well oversubscribed by investors.

For 2002, at least six state enterprises are scheduled for privatisation and listing on the Stock Exchange of Thailand, including the main telecom agencies, the Telephone Organisation of Thailand and the Communications Authority of Thailand.

Successful privatisations not only represent a key component of the state's broader aims to liberalise key sectors and improve efficiency in basic services, but also to raise revenue to offset the growing public debt.

The fiscal 2002 budget, which started in November, calls for a historic 200-billion-baht deficit on spending of 1.03 trillion baht. Six consecutive years of deficit spending, coupled with the costs of financial sector reform, have led the public debt to jump to nearly 60% of gross domestic product, making maximising values of state assets crucial for medium-term fiscal management.

But efforts to privatise two other major state enterprises, Thai Airways International and Krung Thai Bank, were both sidetracked owing to external factors as well as internal complications.

THAKSINOMICS

Entering 2002, the disappointment _ or impatience _ of many with the slow pace of recovery has led to increased scepticism and questioning about whether Mr Thaksin's philosophy of "Think New, Act New" will actually lead to sustainable growth or represents a high-risk strategy which could ultimately bankrupt the public purse.

Even so, the process of translating the premier's visions into concrete actions leading to clear signs of improvement will continue. Most forecasters expect signs of recovery to show by mid-2002, as stimulus programmes take effect and the US economy begins to turn around.

By : Cholada Ingsrisawang
Source : The Bangkok Post