Thaksin needles the government and a fugitive financier is returned

The government of Thai Prime Minister Abhisit Vejjajiva and his Democrat Party are being battered by a series of events including the visit to Phnom Penh this week by Thaksin Shinawatra, the leader ousted in a 2006 coup, and a wide-ranging interview that Thaksin gave in Dubai to the Times of London in which, among other things, he accused the Privy Council surrounding King Bhumibol Adulyadej of manipulating the monarch.

Also the extradition of disgraced financier Rakesh Saxena, 57, who had staged the longest battle in Canadian history to avoid being sent back to Thailand to face charges he had helped to embezzle tens of millions of dollars in phony bank loans in 1996, now injects a volatile new set of issues into Thailand's shaky political agenda.

How much damage the political contest has caused is uncertain. Nomura Global Economics reported in late October that: "The Thai economy contracted the most among Asean countries in 2Q09 in year-on-year terms, driven by a decline in exports (-21.8%) and gross fixed capital formation (-10.1%)" and that "political uncertainty has delayed a recovery in consumption and investment."

The Thaksin interview, a long series of self-justifications which can be found here, has outraged government officials at a time when Abhisit is scheduled to be at the Asia-Pacific Economic Cooperation summit in Singapore and meet with US President Barack Obama. It can also be expected to drive the royalists in the People's Alliance for Democracy, which twice brought down governments aligned with Thaksin, into new demonstrations over Thaksin's supposed disloyalty and meddling by Cambodian Prime Minister Hun Sen in Thai affairs by offering Thaksin a position as his "economic adviser."

Saxena arrived last Friday, bundled in blankets in a wheelchair and said to be suffering from a stroke that had partly paralyzed him. He was immediately whisked away to Thailand's Crime Suppression Bureau. Prior to his flight from Thailand, he was said to be close to Newin Chidchob, the Northern Thailand politician whose defection along with those of 16 of his followers from the Thaksin delivered Abhisit Vejjajiva and the Democrat Party to power.

The supporters of the billionaire fugitive Thaksin have been clamoring for Saxena's extradition for months on the theory that bringing him back could put the Democrat-led majority coalition in danger. Along with Newin, several other politicians in his camp, including Suchart Tancharoen and Pairoj Suwanchawee, have been identified as making money from the fraud perpetrated by Saxena. Prior to his extradition from Vancouver, BC, Saxena said he feared for his life. He later said had a full list of the politicians, some now in the cabinet, who were involved in the scandal that sent him in flight. The Democrats have assured the press that he is under 24-hour guard in Bangkok.

For his part, Abhisit has pledged cooperation with the authorities, telling reporters that "Everyone is obliged to supply information even though such information may harm the cliques within the government because we have to uphold the national interest."

Although the Democrats were in opposition and led the censure debate over the Bank of Commerce scandal, the support of Newin's so-called Group of 16 was instrumental in delivering Abhisit and the Democrats to the shaky hold on power that they have enjoyed for the last several months. Many of Newin's allies are now scattered throughout the unwieldy 35-member Thai cabinet.

Over the last week, Cambodian Prime Minister Hun Sen added to the uncertainty by offering to employ Thaksin Shinawatra as an "economics advisor," perhaps in retaliation for PAD anti-Cambodian activity at the Preah Vihear temple since 2008. Both countries have recalled their respective ambassadors over the affair. Despite the political setbacks, the absent Thaksin probably remains the second-most popular figure after the ailing king.

Saxena's return, given his role in the linchpin of the scandal, couldn't be more inconvenient for Abhisit. It was Saxena's role as treasurer advisor to the Bangkok Bank of Commerce, whose collapse with US$3 billion in debt in 1996 was one of the contributing factors to the devaluation of the Thai baht and ultimately the Asian Financial Crisis of 1997-1998. He was charged with looting US$88 million through establishing a series of phony loans through the bank. According to media reports, he and his team identified moribund companies, pumped up their balance sheets while looting the assets and firing staff, then sold them to unsuspecting shareholders. Among the companies targeted as takeover objects were Morakot Industries, Jalaprathan Cement, Semiconductor Venture International and Phoenix Pulp and Paper.

In July of 1995, according to reports, he transferred more than US$80 million out of Thailand in defiance of banking regulations and, shortly after that, followed the money out to Canada.

The financier ultimately washed up in British Columbia, where his extradition hearing was the longest in Canadian history. Even after the presiding judge ruled there were grounds to extradite him, it took the federal justice minister more than three years to order his return to Thailand.

The return of Saxena -- who has been implicated in a series of dubious stock schemes and a counter-coup in Sierra Leone while under house arrest in Vancouver, comes at an extremely sensitive time for Thailand, with Bhumibol increasingly infirm. The 86-year-old monarch last week returned to the public eye after more than a month in hospital, more frail than ever and with the royal succession in doubt although the official line is that he will get the job. The king's son, Vajiralongkorn, is deeply unpopular and it appears that the royal family may be in the hands of a regency run by the queen, Sirikit.

Abhisit, in Singapore this week for the APEC conference, and his Democrats are beset on one side by the pro-Thaksin Red Shirts, who have now formed the Phieu Thai Party, and the anti-Thaksin Yellow Shirts, who are establishing a royalist party of their own, the New Politics Party which was formed in July.

There appears to be considerable behind-the-scenes agitation to pardon Thaksin, perhaps in exchange for his forsaking political activity in exchange for the restoration of his billion-dollar telecommunications fortune. Whatever happens, Saxena's return adds yet another explosive to the volatile mixture that is Thai politics.

BANGKOK - THAILAND'S fugitive former prime minister Thaksin Shinawatra's appointment earlier this week by Cambodia's mercurial Prime Minister Hun Sen has jangled nerves in the Thai capital and entangled both countries in a diplomatic brawl that prompted Thailand first and then Cambodia to recall their ambassadors on Thursday.

Analysts say Thaksin's latest move could be the launchpad for a political comeback.

'Thaksin is on a new offensive. This is a calculated campaign to undermine this government and to change governments,' said Thitinan Pongsudhirak, a political science professor at Bangkok's Chulalongkorn University. 'He wants to retake what he sees as his legitimate right, which is to have another election that he believes he will win.'

For the government of Prime Minister Abhisit Vejjajiva, Cambodia's action is a slap in the face it feels compelled to respond to. It called the appointment an 'interference in Thailand's domestic affairs.'

From cyberspace, Thaksin tweeted to his 40,000 Twitter followers that Abhisit's recall of the Thai ambassador was a 'childish overreaction', and tweeted in a seperate message: 'I'm asking permission from all Thai people to advise the Cambodian government ... until I have a chance to serve you again.'

Current Prime Minister Abhisit faces the challenge of how to calm the political maelstrom around Thaksin. 'Thailand is now in the international spotlight and its leader has been discredited,' said Sompop Manarungsan, a political economist at Chulalongkorn University. 'The strategy Thaksin is using, I call it 'crashing.' He is destroying everything in his path to reach his goal.'

Thaksin Shinawatra claimed it was "an honour" to be appointed Cambodia's economic adviser. As his motherland is staring at a major diplomatic row with a close neighbour and businessmen in both countries are bracing themselves for an unpredictable impact, there is a thin line between "honour" and "shame".
In his fight to clear his name, Thaksin has stopped at virtually nothing. And even after the Thai ambassador to Phnom Penh was recalled and Bangkok decided to cut assistance to Cambodia, he showed no signs of guilt, concern or remorse. Bangkok was being childish and overreacting, he tweeted.
Thaksin's blurring sense of patriotism is understandable. Having been ousted by a military coup, convicted for a crime he refuses to accept and seen his own political movement neutralised one after another, he can be forgiven for trying to embarrass his opponents who are holding the reins of power. But everything has its boundary - and Thaksin has crossed it.
Only he and Cambodian Premier Hun Sen know whether the controversial asylum offer and the economic-adviser appointment were out of the latter's own goodwill or the former Thai leader had a hand in it. But even if Thaksin had nothing to do with the Cambodian moves, the least he could have done is show he cared about his country.
A neighbourly row of this nature can easily encompass the fighting colours in Thai politics. It threatens the whole country, be it yellows or reds or neutral Thais. Disruption of trade, border blockades, troop redeployment and the subsequent mounting tension on the already-strained relations will not discriminate against anyone.
Thaksin could have said "No, but thank you" to the Cambodian offer, but he has chosen to inflame the situation by saying the Thai government was overreacting, like a child. This came from someone who should have known better, who witnessed first-hand as a Thai leader what misunderstandings between the countries could lead to and who was on the verge of sending commandos into Cambodia himself to rescue Thai diplomats and businessmen running for their lives from angry torch-wielding protesters.
The difference between now and then is the attack on the Thai Embassy may have been caused by an accident, but this time there are people who seemingly want it to happen. Thaksin stands out among them. Hun Sen cannot drag himself into the Thai fray without Thaksin showing the way. If Thaksin's opponents' hardline stand on the Preah Vihear conflict was what first strained bilateral relations, things took a major turn for the worse when Thaksin's representative, Chavalit Yongchaiyudh, visited Phnom Penh and kick-started the asylum-offer episode.
What is Thaksin prepared to do now? On one side is a country he once called home, where he is both loved and loathed, but on the other side is a place that is offering him comfort. A truly grateful man would do anything but pit both countries against each other.

Thailand recalls envoy from Cambodia, Phnom Penh retaliates in kind
Just as many had feared, the stormy relationship between Thailand and Cambodia was pushed to the edge yesterday when Bangkok responded to fugitive ex-PM Thaksin Shinawatra's appointment as the neighbouring country's economic adviser by recalling its ambassador from Phnom Penh.
Cambodia's retaliation - the planned recall of its ambassador here, You Aye, who Deputy Cambodian Prime Minister Sok An said would not return until Bangkok sends its own envoy back - ensured bilateral ties were at their worst level in years.
If Thaksin's appointment was an unmistakable diplomatic provocation, recalling the Thai envoy was the strongest possible response yet - equivalent to a downgrade of relations between the countries.
Former foreign minister Tej Bunnag warned that the ambassadorial recalls meant a major channel of communications had been removed.
The Foreign Ministry recalled Prasas Prasasvinitchai, the ambassador to Phnom Penh, to Bangkok yesterday after Cambodian Prime Minister Hun Sen announced on Wednesday that Thaksin had been royally appointed as economic adviser and would not be extradited to Thailand.
These new developments add more problems to the ongoing process of boundary demarcation, and border conflicts at the area near the Preah Vihear Temple will become more difficult to resolve.
Now it is up to Prime Minister Abhisit Vejjajiva to calmly speak to Prime Minister Hun Sen when they meet in Tokyo today and tomorrow at the Japan-Mekong Summit, Tej said.
"Bilateral ties should not be damaged by a single individual," he added.
However, Chavanont Intarakomalyasut, secretary to the foreign minister, said there were no plans for Abhisit to meet Hun Sen during the Tokyo summit.
"We will not call him but if he calls us, we might talk," he said at a press conference. "So far we have nothing to say to him."
Reflecting Bangkok's "enough is enough" attitude, Chavanont said Thailand would not tolerate Hun Sen's behaviour any longer because the government had already explained Thaksin's legal status to him several times.
"Thaksin's appointment is seen as an interference in Thailand's domestic affairs and a failure to respect the Thai judicial system," he said.
Downgrading bilateral relations is always an option for Thailand when it comes to responding to Cambodia. The Kingdom had previously downgraded ties in 2003 after an arson attack at the Thai Embassy in Phnom Penh - ironically while Thaksin was prime minister. But that was a brief estrangement because Thaksin was always on good terms with Hun Sen.
However, this Democrat-ruled government is different. It is not clear how long it will take to resume normal relations, because the Thai side is going to review all bilateral agreements and cooperation projects. Thailand has a number of ongoing projects with Cambodia in many areas, including transportation and energy.
Every time relations between the two nations get sour, Thai interests in Cambodia, notably in trade and investment, always get affected. The 2003 riots and the anti-Thai sentiment caused a lot of damage to Thai businesses in the country, and investors were only able to resume their businesses a few years ago.
Thailand currently has scores of investment projects worth billions of baht, but bilateral trade in the first half of this year showed a 25-per-cent contraction from the same period last year, though trade experts believed it would recover in the second half. Border trade was also expected to show signs of recovery if relations had not been jeopardised.
Besides, the situation could become worse if a party in Cambodia stoked anti-Thai sentiment, as happened in 2003.
The only way to maintain bilateral interests would be to mend relations as soon as possible. However, with Thaksin and Hun Sen now the best of friends, observers say things can go either way - better or worse.

The Thai government recalled its ambassador from Phnom Penh on Thursday, following a decision by the Cambodian government to appoint ousted former premier Thaksin Shinawatra as an adviser to the Prime Minister Hun Sen.
The withdrawal, ordered by Thai Prime Minister Abhisit Vejjajiva, was another blow to worsening relations between the two countries, which both have troops amassed along an already contentious border.“We have recalled the ambassador as the first diplomatic retaliation measure to let the Cambodian government know the dissatisfaction of the Thai people,” Thai Prime Minister Abhisit Vejjajiva was quoted saying in Bangkok.
“Last night’s announcement by the Cambodian government harmed the Thai justice system and really affected Thai public sentiment,” Agence France-Presse quoted Abhisit saying.
Officials announced on Wednesday that King Norodom Sihamoni had approved Thaksin as an economic adviser to Hun Sen, who has said he would welcome the fugitive official in spite of an extradition treaty with Thailand.