PM THaksin: Cruisin' for bruisin' ?
Newsweek has an article on Thailand's Prime Minister Thaksin's version of Keynesian spending, which, at least for now, seems to be working. Newsweek reports:
Thaksin's new paradigm is actually an old formula of Keynesian public spending and loose credit to boost consumption. This can be healthy, if the credit goes to productive uses and stays under control. The state-run banks have doled out $3.4 billion to small and medium enterprises. That's a significant sum in a $130 billion economy, yet entrepreneurial production appears to be playing a small part in the boom. Many borrowers are using state credit to buy mobile phones or motorcycles or repay old debts, even though the fund is intended solely for new businesses.
The article points out that in the long-term Thaksin may be able to pull it off if the credit extensions he has been giving to Thais propels a new entrepreneurial class in Thailand's provinces. And they better work. Thaksin is not a man of modest ambitions. This early, he seems to be gunning to replace PM Mahathir of Malaysia as the dominant leader in Southeast Asia. He has, in fact, tried exporing his Thaksinomics to the Philippines. He has also brokered the roadmap proposed by the Burmese military government to reconcile with the opposition led by the jailed Aung San Suu Kyi.
Thaksin is running on 80% popularity rating in Thailand. His family owns all TV stations in Thailand so that helps tremendously in publicizing his government's efforts. What remains to be seen though is whether these good times in Thailand can be sustained in the long run or fizzle out in a flash--and ruin Thaksin's pretensions to the throne of SE Asia.