In The Clear

17 minute read

In the weeks before last friday’s Constitutional Court 8-7 acquittal of Thai Prime Minister Thaksin Shinawatra of corruption charges, you could see the toll the impending verdict was taking on him. The eyes sagged. The usually smooth skin seemed more wrinkled. The smug smile would occasionally straighten, the corners of his thin-lipped mouth almost turning to a resigned frown. If he was bitter, however, he would never admit it, not to a reporter, nor to his Cabinet, and probably not to his friends. Yet the possibility his tenure would be abbreviated by a guilty ruling had become the defining attribute of his term. Implicit in every question was If, as in, If you are still in office, If you are still Prime Minister, If you can lead your country.

It was a politician’s instinct, combined with a businessman’s sense of the marketin this case the voters to whom he had so successfully sold himself last Jan. 10that would send him back out onto the hustings while the Constitutional Court deliberated. That populist approach had swept him to the biggest electoral majority in Thai parliamentary history. He would take his case directly to the people.

Thaksin is an effortless campaigner, his languorous walk, the gradual coming together of his palms in a Buddhist greeting, the soft grip of his handshake, all his movements coalesce to communicate equilibrium, an almost soothing presence. On any street, in any temple, at any doorway, he is the calm center of the media storm that follows him everywhere. He is the first Thai politician to exploit the mass media of TV and the Internet, to understand that a good sound bite on the tube is worth much more than making his point in a sit-down meeting with a few prominent parliamentarians. Before Thaksin, Thai Prime Ministers were almost disdainful of television, restricting their appearances to mall openings, military ceremonies and bowing before the King. Thaksin, however, romances the cameras, making himself more available than most Thai pols. Though he hasn’t mastered the nuances of the mediumhe can sometimes seem defensive when he feels he’s not receiving the proper deferencehe has taken to it with the easy grace of a natural. If Al Gore is a politician who burns too hot, whose nervousness and eagerness make those viewing him, on TV or in person, squirm with discomfort, then Thaksin is blessed with cool. It’s almost a pleasure to watch him.

Part of that cool, he will tell you, emanates from his success in myriad businesses. But others will claim that it is an image created as much by buying off and bullying the press. He’s not shy about throwing his clout around, and that’s caused critics and a sometimes-hostile press to label him an authoritarian. But in Thailand, being rich is considered a virtue, and being very rich is practically godly. Thaksin benefits from being one of the country’s richest men, with a fortune estimated at more than $1.2 billion and interests in sectors ranging from cell phones to satellites. His confidence is that of a man who has had vast, bankable successes. His election campaign inculcated in Thais the idea that if he could make billions for himself, then surely he could generate a few thousand baht for the bar girls, farmers and noodle sellers. During his campaign, almost every neighborhood seemed festooned with his Thai Rak Thai (Thai Love Thai) party’s red, blue and white logo, and the Bangkok taxi drivers and Chiang Mai tuk tuk operators would flash you a grin and a thumbs-up when you mentioned his name. “Thaksin make money,” they would say, “Thaksin make money for Thai people.”

Outside of Japan, Thailand has had perhaps the most disappointing succession of Prime Ministers of any major Asian nation. Since 1991 there have been eight other Prime Ministers, all of whom, at their best, conveyed an image of dull impropriety. (Quick, who was Prime Minister before Thaksin’s predecessor Chuan Leekpai? Didn’t think you remembered.) Thaksin, on the other hand, has managed to associate himself with wealth, with economic growth, with mobile phones and the Internet. And by now, even remote Thai villages that don’t yet have Internet access know it is something they should want.

On that last, pre-verdict campaign-style swing through Northern Thailand, as he works the crowd at Sankampaeng village, where the locals, adhering to Thaksin’s One Village, One Product program, are proudly displaying the reams of mulberry paper they have been making, he continuously reminds his constituents of his connection with all things futuristic, shiny and new. He vows to distribute more money without government interference, without a single baht unfairly withheld, without unnecessary delay. He says in his Northern Thai accent that he is one of them, that he knows they can’t wait for the money, that they need the Internet, that they need e-commerce. His voice is a nasal tenor, the run of his rambling vowels is corralled by strong, pronounced consonants. “Do you know what I see?” he asks the bewildered villagers who have been sitting in the hot sun for two hours waiting for a glimpse of their new PM. “I see you selling your mulberry paper over the Web. I see you having access to great wealth. I see your families happy, employed.”

Later, Koijai Linsinjoy, 44, a village woman dressed in the traditional magenta red sash and black dress, stands in the shade of a local mulberry pressing factory. Does she like the Prime Minister? Oh yes. Does she think he will help make her rich? Oh yes. Does she believe what he said about selling mulberry paper over the Web? Oh yes. Has she ever seen the Internet? She shakes her head. No.

That he has managed to define himself, somehow, as synonymous with Thailand’s technologist tomorrow may be Thaksin’s greatest trick. In these weeks before the verdict comes down, he crisscrosses the country, assuring rural voters that he and he alone can make Thailand prosperous. If this Constitutional Court rules against him, he implies, the people should not stand for it. Some members of his party publicly warn of mob violence in the event of a guilty verdict. Throwing Thaksin out of office would be like taking money out of your own sarong and burning it. This Constitutional Court, these opposition politicians, are they going to make you rich?

Thaksin ran against the court. And he won. When the verdict came down, there was a depressing predictability to it. In our most cynical moments we suspected it would turn out like this; that, just as it seemed Thailand was moving toward genuine democracy and true rule of law and an incorruptible judicial system, the nation would be lurched back to old-style Thai politics, and tainted justiceor even more familiarsanctimonious injustice. Thaksin had been charged with failing to declare assets when he was Deputy Prime Minister in 1997 and parking those hundreds of millions of dollars worth of his Shin Corp. shares in his drivers’ and maids’ accounts. Thaksin’s defense consisted of testimony ranging from blaming his wife to stating everybody did this (or at least every billionaire did this) and that, at any rate, it was an honest mistake. Most Thais, inasmuch as they follow politics, believe Thaksin was probably guilty. Yet, in part because of his chicken-(curry)-in-every-pot populism, they are ready to forgive him in order to get on with the business of getting rich. He’s promised them a million baht for every village, has told them of his One Village, One Product plan, has instituted a new micro-lending program, and he’s already delivered on his pledge to offer 30-baht (60-cent) medical care to everyone in the country. No Thai Prime Minister has accomplished this much in his first few months in office.

During a dinner at the Suan Bua resort on the outskirts of Chiang Mai, Thaksin sits surrounded by his Cabinet ministers who are taking a break from a two-day retreat where he is formally articulating his policies. Despite his tub-thumping election campaign he has not actually said what he stands foraside from his vague blandishments about technology and the future. In his first few months in office he sent conflicting foreign-policy signals, telegraphing an isolationist message at an April conference in Bangkok where he said Thailand would reduce dependence on exports and look inward to solve its economic woes; then seeming to backtrack at the May FORTUNE Global Forum in Hong Kong where he pledged to keep Thailand’s economy open. Now he insists he has always been a free trader, but that he wants to promote policies that encourage efficient deployment of domestic capital, to close what he sees as a gap between foreign producers and Thai consumers. To that end, his economic advisers have promoted a policy of higher interest rates, insisting (heretically, to Westerners used to Keynesian pump priming) that is the only way to grow the economy. “We have to create an incentive to save, for money to stay in the country, and to force banks to seek out investments with high returns,” he says. “It’s the only way to get capital back to work.”He wears a burgundy top, a traditional, collarless Northern Thai vestment, and sits on a cushion on the soft teak floor under a pavilion next to a bubbling stream while young women in ornate sarongs parade past with plates of spicy chicken, sticky rice and boned freshwater fish. A famous oenophile, he sips an expensive Bordeaux, brought to Chiang Mai from his own cellars. His entourage, a collection of cronies and political allies for whom Thaksin has been criticized, is gathered around him at other low tables. For a putative reformist, he has surrounded himself with numerous politicians associated with corruption-tainted governments from the past. Suwit Khunkitti, Shucheep Harnsawad and Sonthaya Khunpleum are seated nearby, keeping a wary eye on Thaksin as if he might wander away, leaving them once again out of power.

His experience as a CEO, he believes, has trained him in the handling of divergent personalities and the management of sometimes discordant deputies. “Running a government and running an economy are very similar to running a corporation. And in the new economic order, global free trade is just like mergers and acquisitions. You have to be fearless. And I am fearless in business. When I went to Las Vegas, I only bought $5,000 in chips. But when I’m making a deal, I’ll play with $50 million.”

When asked about the impending ruling and the possibility that all these official perquisites would come to an end if he is not acquitted, he shakes his head. “If there is a decision that needs to be made to benefit the people and the country but there is a law prohibiting it, don’t worry, we’ll change the law.”

His chief policy adviser, Pansak Vinyaratn, is more blunt: “Don’t f___ with Thaksin.”

Thaksin grew up not far from that hotel, in Sankampaeng, near Chiang Mai, the second of 10 siblings. His father, a Chinese merchant who tried his hand at jobs ranging from bus driving to running a movie theater, was a modest success who would eventually rise to serve in parliament. Thaksin has steadily propagated the myth that he grew up impoverished. His aunt, Chansom Shinawatra, 78, however, shrugs when asked about the Shinawatra family circumstances: “We did well.” Well enough, according to some of Thaksin’s childhood friends, for the strapping, big-eared boy to own the only bicycle in the neighborhood. “He was very generous with it,” says former schoolmate Suthat Chaiongkon. “He let us take turns riding it.”

All those who knew the boy recall a hardworking student, one who shot his hand up when the teacher scribbled a math problem on the chalkboard, shouting “chaiyo” (victory) when he inevitably got the right answer. He usually finished his homework in a matter of minutes. Still, the star pupil with the outsized craniumhis nickname among his buddies was Fat Headwas no geek. “He was popular with the other boys and not shy at all,” says his second-grade teacher Srimoon Kantha. “I remember him flexing his muscles, saying ‘I’m going to grow up and be a hero.'”

Indeed, Thaksin does possess that rarest commingling of attributes: stellar academic prowess combined with an easy-going cool. For a math whiz, he doesn’t come across as being only about differential calculus and regression analysishe successfully communicates greater depth and a sort of popular-kid charisma. His aunt remembers him as always being a leader, even in the days when he and the other boys were making banana-tree stalks into toy horses and riding around, pretending to be cowboys.

To this day, he says that part of him regrets not following his first aptitude, mathematics, and becoming an engineer. His thought patterns are still those of a scientist or mathematician, and he likes to boast that political and policy issues can all be solved with enough analysis and scientific reasoning. “Everything I do, I research and find a scientific answer,” he says. “If the analysis is right, I’m never reluctant to make a decision.” This is the hubris of the technocrat, one who believes he can wear down Thailand’s problems with sheer studiousness.

If Thaksin were just an A-student, however, he wouldn’t have risen to such lofty political heights. He attributes his political successes to his early business failures. After graduating from the Royal Thai Police Cadet Academyhe says he attended the military academy and then the police academy because he didn’t want to attend a co-ed engineering schoolhe married Pojarmarn Damapong, the daughter of a police general. Along with his new bride, he moved to the United States, enrolling in a doctoral program at Sam Houston State University in Texas. The future Prime Minister earned his tuition working behind the counter of a Kentucky Fried Chicken while his wife baby-sat to make extra money. Their first son was born there, and retains his American citizenship. Thaksin and his wife would have four more children. Upon his return to Thailand, Thaksin embarked on a string of disastrous business endeavors. He joined the Bangkok Metropolitan Police Bureau and began teaching at police schools, his salary from the department coming to about $150 a month. While many police in Thailand are notorious for supplementing their income with graft and payoffs, Thaksin, to his credit, instead cooked up numerous business schemes, from going into the family silk business to producing and distributing films to buying and selling commodities to building condominiums. All of them were failures. This is the dark period he insists contributed the most to making him who he is today. He recalls coming home after finding out from the bank that he had bounced another round of checks to suppliers, shamefacedly admitting to his wife he had blown it again, then walking into the bedroom where his son lay sleeping and wondering how he would ever provide them with a better life. His business shortcomings were not for lack of effort or seriousnesshe had been using his vaunted scientific reasoning, yet every time he launched a new venture, he would be blindsided by a real-estate downturn or a baht devaluation. If you know that feeling of failure, he says, the futility of trying your best and still screwing up, you discover new strength of character and fortitude. “One of the hardest things for any man to do is to tell your wife you’ve failed,” he says.

It was through his wife that he secured the connections that would launch his first successful business: leasing computers to the police department. This venture would also be the first to bear the taint of cronyism and conflict of interest that has also been a hallmark of Thaksin’s vast financial success. He insists there was no impropriety to his working for the police department while he was leasing it equipment. His wife ran the operation, almost as a blind trust, Thaksin has always said. (Business partners who knew him during that period say Thaksin was always intimately involved in running the business.)

Though his rise was due in part to his ability to work the halls of power and gain crucial government concessions, he has also been a bold innovator in numerous markets. His early bids for the pager business and the mobile phone business, and his gumption in launching the first Thai satellite when most analysts and experts said that wasn’t a viable business are all achievements Thaksin can take credit for. But like most successful businessmen who are handed virtual monopolies, as Thaksin was with his most profitable enterprise, his mobile phone empire, he sometimes overstates the role his business acumen played in securing his windfall.

Still, in the days before the verdict, he reflected often upon those years of bounced checks and the tiny, rickety Bangrak house with the frequently flooded downstairs that he had to manually pump out whenever it rained. Even if the court came back against him, even in the worst-case scenario of a ban from politics, he swore he would survive it as he had survived those years in the business wilderness. “The road to victory is never rosy,” he says. “I think I’ve learned more from failure. I think it’s hard to be a great man if you have never tasted failure. Look, if they tell me I have to go, then I’ll go. But I’ll never really go away.”

The executive office in Bangkok’s government House is a rectangular room painted a cool shade of blue. Thaksin’s vast, mahogany desk sits before a portrait of King Bhumibol Adulyadej, two immense rococo urns and a cabinet of Siamese vases. His work space is clear, save for a Phillips computer and laser printer. The effect of sitting in this room, with its plush oriental carpets and quiet rush of air-conditioning, is a little like being submerged. Voices are muted. Movements seem unnaturally slow. It is as if Thaksin’s aura of measured patience radiates outward, catching even his aides, who usually scurry about delivering sheaves of paper and answering mobile phones, in a tranquilizing bubble.

Those aides lately have been strongly imploring that no questions be asked about the Constitutional Court and the corruption charges. They whisper that the Prime Minister would like to talk about policy, his family, his history, anything else. Thaksin’s temper has erupted several times during recent months when journalists have asked him about his case.

Thaksin, however, seems unfazed when the question of the verdict comes up. He shrugs: “The people want me to stay and the people know what’s right for Thailand. And who should I be more loyal to? The people? Or to the court? I love people. I want to work for them.”

The question of what will happen to Thailand’s fragile reforms, to the corruption commission and the authority of the Constitutional Court does not interest him. In this campaign to stay in power, he has striven to make himself appear above the process and therefore above the law. The reasoning that the love of the people should trump the rule of law is specious and dangerous. “I wouldn’t say reform will be dead,” says Thepchai Yong, a columnist for the Nation newspaper, “but you could say it’s in critical condition.”

Thaksin, sitting behind his desk, talking about his plans for the economy and for his future, seems oblivious to the collateral damage his case might have caused. He believes, he really does, that he knows what’s best for Thailand, and that might mean going beyond and above the law to achieve what he is convinced is the greater good. The corruption, the collapsed economy, the inconsistent foreign policyleave it to him. Those are management issues. Committees will be formed. Research papers drawn up. Policies implemented. Remember, he’s a good manager, a visionary CEOand if it worked for him, made him rich, then surely, you’ll be next.

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