[stop-imf] Thailand: Thaksin threatens return to IMF

[Robert Weissman]

Financial Times
Thailand?s Thaksin warns of return to IMF aid
By Amy Kazmin in Bangkok
ublished: March 20 2006 11:03 | Last updated: March 20 2006 11:03


Thaksin Shinawatra, the Thai prime minister, has stepped up his battle
for political survival, warning that Thailand could once again be
forced into an International Monetary Fund-directed structural
adjustment programme if he is ousted from power.

In a televised election announcement on Monday, Mr Thaksin defended
his record in government, and expressed concern that his defeat in
controversial April 2 elections ? which opposition parties are
boycotting ? could undermine foreign investor confidence and
Thailand?s macro-economic stability.

?What I am very concerned about is going back to the past,? the
sober-looking premier said. ?If investors lose their confidence in the
country because they find that Thailand has turned its back on
globalisation, capital will flow out. This might mean we have to enter
an IMF programme again.?

Mr Thaksin has long touted his early repayment in 2003 of Thailand?s
outstanding debts from a $17.2bn IMF bailout ? extended at the start
of the 1997 financial crisis ? as one of his proudest achievements in
office.

However, opposition politicians dismissed the idea that Thai
macro-economic stability depends on Mr Thaksin?s leadership.
Independent analysts said while Thailand?s external position remains
strong, the political crisis, if prolonged, would undermine growth
prospects.

?We do not believe that the country is in any way at risk of going
back to the IMF in the near future,? said Kiat Sittheeamorn, an
economic policy advisor for the opposition Democrat party. ?That kind
of statement not only distorts the facts about our involvement with
the IMF, but it is also taking the Thai people hostage.?

Thailand, which was forced to turn to the IMF after exhausting its
foreign reserves in a futile defense of its fixed exchange rate, now
has around $54bn in foreign exchange reserves, and the baht has
recently been appreciating. The external debt-to-GDP ratio is around
30 per cent, down from around 72 per cent before the 1997 Asian
financial crisis. Growth this year is projected to be around 5 per cent.

Ailing Ngiam, a sovereign analyst with Fitch Ratings, said the Thai
?economy will slow, but we are not going to see an IMF scenario,? even
with the current political stand-off. However she added the country
would benefit from ?a clear solution? to the present turmoil.

Mr Thaksin?s warning of potential economic instability came as the
Democrat party accused his Thai Rak Thai (Thais love Thais) party of
allegedly hiring people to contest the election as phony opposition
candidates ? in an apparent bid to circumvent voter turnout rules that
threaten to scuttle the election.

Thailand?s three main opposition parties are boycotting the election,
leaving the ruling party unchallenged in the polls. But Thailand
requires parliamentary candidates running uncontested to receive the
support of 20 per cent of eligible voters in their constituency ? a
threshold that will be tough for some Thai Rak Thai candidates to
reach, particularly in opposition strongholds.

Until all 500 seats are filled, parliament cannot convene to elect a
new premier.

Democrats on Monday said they have evidence that senior figures in
Thai Rak Thai, including two government ministers, sought to skirt the
turnout problem by paying people between Bt100,000 and Bt3m each to
run against the Thai RakThai candidates in various constituencies. Mr
Thaksin has denied wrongdoing by his party.