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Viewing cable 07BANGKOK1669, THAI MINISTER OF FINANCE AND THE MIDDLE PATH

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Reference ID Created Released Classification Origin
07BANGKOK1669 2007-03-21 07:17 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Bangkok
VZCZCXRO0899
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #1669 0800717
ZNR UUUUU ZZH
P 210717Z MAR 07
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC PRIORITY 5719
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHCHI/AMCONSUL CHIANG MAI PRIORITY 3300
RUCPFOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
UNCLAS BANGKOK 001669 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS AND EB 
COMMERCE FOR EAP/MAC/OKSA 
TREASURY FOR OASIA 
STATE PASS TO USTR FOR WEISEL 
FEDERAL RESERVE SAN FRANCISCO FOR DAN FINEMAN 
FEDERAL RESERVE NY FOR MATT HILDEBRANDT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL PGOV TH
SUBJECT: THAI MINISTER OF FINANCE AND THE MIDDLE PATH 
 
REF: BANGKOK 1399 
 
1. (U) On March 21 Ambassador Boyce made his initial call on 
newly appointed Finance Minister Chalungphob Sussangkarn. The 
Minister, very business-like but relaxed, explained that 
while he was familiar with most of the issues he now faces 
due to studying these matters in his previous position as 
president of the Thailand Development Research Institute, he 
was still learning about how to deal with internal ministry 
issues. 
 
2. (SBU) Chalungphob, like most of our economic sector 
official interlocutors, was keen to ensure that the 
"sufficiency economy" philosophy was understood to simply be 
"the opposite of excess" and was in no way opposed to 
globalization, or meant as "self-sufficiency." He appreciated 
that the misinterpretation probably arises because of some of 
the economic policies the RTG has pursued over recent months 
which seem aimed at reversing traditional Thai openness to 
foreign investment and participation in the economy, 
initiatives with which he personally disagreed. 
 
3. (SBU) As he told embassy staff on his first day in the job 
(reftel),  Chalungphob believes that policies such as capital 
controls and amendments to the Foreign Business Act were 
designed to get at specific problems but were "too extreme; 
not the middle path." He lamented that these policies were 
having a negative affect on the overall economy as business 
confidence was damaged as a result. The economy is further 
affected because the new government ended Thaksin-era 
programs aimed at helping rural Thais ("half the population 
are people who live on less than US$100 per month") "too 
hastily" and with nothing to replace the income lost to these 
consumers. The Minister estimates that the specialized 
financial institutions meant to provide credit to those 
unserved by commercial banks had reduced their activity by 
Bt30 billion since the new regime came into office. The lack 
of spending and lack of investment is harming the economy, 
although he noted that, despite the baht's continued 
strength, exports were up 17.7 percent in January. 
 
4. (SBU) Chalungphob accepted that the cabinet to date has 
been ineffective and slow to make decisions; "like having 26 
different political parties." But he related that the PM has 
plans to "integrate" decision-making in cabinet to improve 
governance. For the economy, the Minister is keenly aware of 
the limited duration of his tenure and so says he will focus 
on the micro-economy; specifically on stimulating income 
growth (and therefore consumption) at the grassroots level. 
Macroeconomic decisions he intends to leave primarily to the 
Bank of Thailand. 
 
5. (SBU) Comment. Chalungphob expressed strong disagreement 
with policies he sees as giving too much power to 
bureaucrats, including the proposed amendments to the Foreign 
Business Act and the Retail Act. He is a believer in markets, 
properly regulated, and promises to "raise his voice" to 
prevent new laws that would depend on the presumed probity of 
the current regime continuing into an unknowable future for 
the transparent administration of business regulations and 
law; "we want a level playing field.". 
BOYCE