The 'sanuk' coup: it's all one junta family
YUKAKO ONO, Nikkei staff writer
BANGKOK -- There is a sense of euphoria in Thailand, where practically everyone is in high spirits, pulling for the economy to reverse course and begin heading upward again.
And it is not at all ironic that a military coup has kindled this way of thinking. Though, perhaps, some Thais might take umbrage to the word "kindled."
The truth is, underneath the "thank goodness the politicians are gone" euphoria, there is a lot of arm-twisting going on.
Board members of some state-owned enterprises have stepped down under pressure. The holder of Thailand's World Cup broadcasting rights accepted a last-minute request to air all matches for free. And Norwegian telecom giant Telenor group learned a lesson after revealing a secret junta order behind a brief Facebook blackout; it later issued a public apology.
Telenor and its Thailand arm, Total Access Communication, which operates under the Dtac brand, said in a statement published by Thai media June 16 that it was sorry to have "damaged the public image" of the National Broadcasting and Telecommunications Commission, the telecom regulator, and of the National Council for Peace and Order, as the junta is calling itself.
A week earlier, Telenor had sent statements to international and Thai media saying the commission had ordered the company to block its Thai users from accessing Facebook on May 28.
The NBTC had been denying its involvement in the Facebook blackout, which lasted for about 30 minutes, blaming network failures. After Telenor's statement was published, the commission reportedly warned Dtac, the nation's second largest mobile phone service provider, and asked it to "clarify its intentions." It also said that it will be examining the foreign holdings of the country's mobile operators ahead of planned auctions for 4G spectrum licenses.
Currently, Dtac and Thailand's leading mobile carrier, Advanced Info Service, are partly foreign-owned. No. 3 carrier True Corp. is set to sell an 18% stake to China Mobile.
A few days after it received the wrist-slap, Telenor issued the apology. Dtac released a separate statement stressing that the company "is gearing up" for the planned auctions and is "confident it's qualified."
"The Facebook (outage) row is alarming because it shows that political interference and coercion in foreign and domestic business operations may increase in the near future," said Pavida Pananond, an associate professor of international business at Thailand's Thammasat Business School, Thammasat University. "If so, this would raise the risk of doing business in Thailand dramatically."
In fact, the 4G auctions, which the government of Prime Minister Yingluck Shinawatra approved and scheduled for August and November, are now suspended for "transparency reviews." The announcement of the suspensions was abrupt, contradicted earlier media reports and sent telecom stocks tumbling. Yingluck was ousted by a court before the coup.
One reason the public is giving the junta the benefit of the doubt is that Thailand's economy fell into negative growth during the first quarter this year. Hopes are genuinely high. And some of the junta's efforts to stoke growth are being well-received.
Rice farmers that had gone long months without being paid under Yingluck's rice-subsidy scheme are finally getting the money promised them. The Board of Investment, now headed by Prayuth Chan-ocha, the army general and coup leader, for the first time in eight months has begun approving large-scale investment projects. Analysts believe these policies will spur consumption and business activity.
Already, data points to better times ahead. Consumer confidence for May, surveyed by the University of the Thai Chamber of Commerce, improved from the previous month for the first time in 14 months (the survey was taken after the May 22 coup). And Thanachart Securities recently upgraded its outlook on the country's gross domestic product growth for 2014 to 1.4%, up from 1.2%, and to 4% for 2015, up from 3.5%.
There are also faint signs of trouble ahead, at least on the stock market. The benchmark index -- which had zoomed after the coup, gaining as much as 35% in less than a fortnight -- has been boxed in between 1,450 and 1,470 since the beginning of June.
Supavud Saicheua, head of research group at Phatra Securities, another brokerage, says the nation could be "overanticipating."
"Newspapers have been publishing lots of news on new policies," he said, "but most of (the policies) haven't been specifically approved. (And with no working constitution or parliament), Prayuth can change his mind whenever he wants."
Right now, Prayuth seems to be cleaning house. The junta has postponed the 4G auctions, and the board members of state -owned companies who have stepped down were seen as ruling party or government cronies. The chairmen of oil giant PTT, Krung Thai Bank and airport operator Airports of Thailand resigned while chorusing the same phrase: "to pave way for the NCPO's reforms."
Prajin Juntong, -- who is chairman of flag carrier Thai Airways International, air chief marshal and the junta's economic czar -- also appeared to be set to resign from his Thai Airways post. After a recent board meeting, the resignation of four directors was announced but Prajin was not among them.
Thammasat University's Pavida says the junta's house-cleaning can only work if it is truly transparent. "Putting men in uniforms, or good friends of men in uniform, back on the boards of key state-owned enterprises may bring back memories of when these businesses were places for vested interests," she said. "This will mean Thailand has made a U-turn on corporate governance."
The high hopes of some Thais could make a similar turn if the military becomes even more heavy-handed in silencing its critics.
Even now, it seems to be buying its goodwill. It has been holding free musical concerts across the nation at which army officials and girls dressed in camouflage sing and dance to popular songs. Admission to the blockbuster movie "King Naresuan Part 5" was free on June 15, and people flooded into cinemas. Admission to sightseeing spots has also been made free.
Plus, the military paid RS, the World Cup rights holder, to broadcast all matches on free over-the-air channels. Initially, only 22 of the 64 matches were to be aired this way, with the rest only shown via paid cable or satellite TV. RS got 427 million baht ($13.1 million) for accepting Prayuth's request, made a day before the games kicked off and a few hours after a court ruled that RS did not have to show all matches over the air. The baht amount was a little more than half what RS had sought.
The sanuk, "fun" in Thai, is expected to last for several months, or until an interim government is set up, which is expected to happen in September.
So who might head that interim government? Consider that Prayuth retires from military service that month. Also consider that polls say an overwhelming majority want the general to take the job of prime minister after his military retirement.