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The man who lost a giant company in a
long-running battle with creditors has stormed into the Thai election fray by advocating the
creation of a welfare state
 With Thailand’s first election since last year’s coup less than two months away, the wild card
looks to be Prachai
Leophairatana, the man who
oversaw Thailand’s biggest corporate bankruptcy and then fought a 10-year battle to get
his failed company, once known as Thai Petrochemical Industry, or TPI, back in
his grasp.
The long-time businessman is spending
millions, if not billions,
of baht, on the upcoming election and is borrowing
a page from the playbook of deposed Prime Minister Thaksin Shinawatra by promising the world to the
poor. He is spreading a
message of compassion and government welfare that will “take care of people
from the cradle to the grave,” in his words.
So what are his
abundant, seemingly unrealistic, promises all about? Many
analysts say Prachai simply
wants to buy back the company, now known as IRPC, which he founded in 1978. TPI fell into a river of red ink on Prachai’s
misguided expansion plans and was the subject of a spectacular battle between the
tycoon and national and international creditors who lost as much as US$$3.5
billion.
“Winning back his company is an open
secret,” Thitinan Pongsudhirak, a political scientist at Chulalongkorn
University, said of Prachai's foray into politics. “That’s the objective and
it’s blatant.”
Local news reports say Prachai wants
the company returned at 3.3
baht per share – the same price state-run oil firm PTT paid when
it took a majority stake two years ago in a court-approved buyout. IRPC shares
are now trading for twice that.
But Prachai denies that he wants to buy IRPC. He says he is simply joining the political fray “because
everyone else did such a bad job running the country.”
“The TPI matter compared with national
interests is very small,” he told a small group of reporters in a wide-ranging
interview on Tuesday. “The TPI case is in the courts already…. I have no more
debt burden. TPI was robbed by the Thaksin government, but the past is the
past.”
In a political world where money equals
power, Prachai has suddenly become a force. He is one of the few major money
men among the hodgepodge of parties that sit somewhere between the country’s
two more prominent political ones: The neo-liberal Democrats and the populist
People’s Power Party, which is comprised of loyalists to deposed prime minister
Thaksin Shinawatra.
Four parties – Prachai’s
Matchimatippatai (Middle Path Democracy), Pua Paendin (For the Motherland),
Ruamjai Thai Chat Pattana (United Thai Developing the Nation) and Pracharaj
(Citizen) – have sprung up from lawmakers who formerly sat under the giant
umbrella of Thaksin’s Thai Rak Thai party, which was dissolved by a
military-run court in May.
Prachai has had a hand in the
composition of all of them, and is just now starting to take a more overt role
as leader of Matchimatippatai after lurking behind the scenes over the past two years.
After finally losing TPI to PTT in July
2005 following nearly a decade of court battles, Prachai started funding
anti-Thaksin protests led by outspoken publisher Sondhi Limthongkul. (“I helped
a little bit” with funding Sondhi’s protests, Prachai said with a laugh.) The
protests peaked after Thaksin’s family sold its stake in Shin Corp to
Singapore’s Temasek Holdings for US$2 billion in a largely tax-free deal, which
forced the premier to call an early election.
After a court nullified the April 2006
election, the protests never really gained momentum again. On August 3 of that
year, Prachai joined veteran politician Sanoh Thienthong, a renowned kingmaker
during the time of weak coalition governments in the 1990s, for the launch of the Pracharaj party.
“Originally nobody dared to fight Thaksin,”
Prachai said of why he joined up with Sanoh.
But Prachai’s stint as party
secretary-general didn’t last long. After the coup, which Prachai says was all
“pre-arranged,” he announced he was stepping down from his position in
Pracharaj to go back into business, saying that his mission to topple Thaksin
had been accomplished.
“At the time, I expected [appointed Prime
Minister] Surayud [Chulanont] to do his job properly, but he ran the economy
into the ground,” Prachai said.
News reports trickled out that said Surayud
resisted calls from Prachai’s allies in the military and the National
Legislative Assembly to offer the industrial tycoon his company back at 3.3
baht per share. Prachai said the reports were false: “The government didn’t
want to do anything [with IRPC], and I don’t care.”
Neo-Welfare
State
Since the election date was announced,
Prachai has come back to the political arena in force. In the interview, he
spoke bluntly about the tumultuous world of Thai politics and his own
aspirations. His own party has laid out
an ambitious agenda that makes Thaksin’s populist efforts look meager by
comparison. Matchimatippatai plans to offer many things for free, including
elementary and secondary education, university, school lunches, uniforms,
textbooks, health care and medicine. It also plans to lower taxes – a move
Prachai says would widen the tax base and increase state revenues – and
immediately increase civil servant wages by 5,000 baht ($143) per month in a
bid to stamp out corruption.
“Thaksin’s populism is totally different
from my policies,” Prachai said. “Populism is just temporary to get votes while
our policy is more long term.”
To pay for the policies, Prachai intends to
strip out spending on mass transit projects from the government’s 400 billion
baht ($11.76 billion) annual investment budget and amortize the cost over 30
years. This, he says, would free up capital for the government to spend
directly on the public.
“Everyone thought of populism, but nobody
thought of the welfare state,” he boasted. “Right now we have no welfare state
and people are so poor. But we won’t go to the extreme where it creates
unemployment.”
“We
will be in the government”
Matchimatippatai comprises a unique mix of
lawmakers that is typical of fickle post-Thaksin politics.
About half of the group comprises members of Somsak Thepsutin’s Matchima
faction that used to join with Thaksin, and the other half consists of former
members of publisher Sondhi Limthongkul’s People’s Alliance of Democracy that
fought against Thaksin.
“Most of our party members are from
Thaksin’s party,” Prachai said. “All the grassroots people [in the Northeast]
belong to us. We’ve just changed the head.”
The outspoken Prachai still has strong
words for both the Democrats and Thaksin. He called former Democrat finance
minister Tarrin Nimmanhaeminda a “traitor” for helping to enact tough financial
laws after the 1997 crisis, and said Thaksin “tried to nationalize my property
and then tried to privatize it to line his own pockets.”
Nonetheless, he said, those past grievances
would not prevent him from joining up with the Democrats, PPP or any other
party to form the next coalition government. Prachai believed his party could
win 120 seats in the 480-seat legislature, putting him in a position to potentially
be prime minister in the unlikely scenario that he beats both the Democrats and
PPP on December 23. Either way, he plans to join with the winners.
“I don’t want to be in opposition,” Prachai
said. “We’ll be in the government…. I will join with the Democrats, Pua
Paendin, PPP or anyone else. You can never tell in politics.”
If his party doesn’t win the largest number
of votes, Prachai is hoping he can come in second with enough weight to win the
finance portfolio. That would put him in charge of the largest shareholder of
PTT, which is in turn the largest shareholder in Prachai’s former company.
“I need to be finance minister to push
through our policies,” he said.
Not
just an ATM
Just as Thaksin did when he formed Thai Rak
Thai, Prachai has used cash to quickly form alliances. He freely admits that
the election may end up costing him a few billion baht (at least US$58.8
million), but insists he’s not simply an automated teller machine for
politicians.
“I will pay for what is proper,” said
Prachai, adding that 1.5 million baht (about $44,000) is enough to finance the
campaign of one lawmaker.
“Anymore than that they just put in their
pocket,” he said, referring to MPs who constantly switch parties looking
for the highest payout. “Why should I pay for that? I also love my money. If
they don’t like me, I don’t care.”
Prachai, who declined to reveal his net
worth, recently terminated his relationship with Pracharaj’s Sanoh after he
asked the veteran politician to step down as party leader.
“I asked Sanoh to step down, but he
refused,” said the 63-year-old Prachai. “I cannot sell him to the public as the
head of the party. I don’t want to invest in someone who I cannot sell.”
At one point, Pua Paendin nearly managed to
rope in Pracharaj and Matchimatippatai into one large party, but Prachai said
he wouldn’t finance all the members and the potential merger fell through.
Despite saying he would join a coalition
with either the Democrats or Pua Paendin, Prachai also took jabs at the rival
parties. He called Democrat leader Abhisit Vejjajiva “a young kid” and claimed
the party was receiving help from Privy Council President General Prem
Tinsulanonda, a former prime minister who commands wide respect among the Thai
public.
“The Democrats are controlling the game,”
Prachai said. “The unofficial head of the party is Prem Tinsulanonda, who
ordered everyone to take care of them.”
Prachai also claimed the military was
forcing leading Thai companies to fund the Pua Paendin party.
“Pua Paendin belongs to the military so we
cannot afford to merge with them,” Prachai said. “Thai people don’t want
military people running the country.”
Sondhi Limthongkul is still a “very good”
friend, Prachai said, adding that he now has a good relationship with Somkid
Jatusripitak, a key leader in the Ruam Jai Thai Chat Pattana party who headed
Thaksin’s economic team when PTT took over TPI.
He even signaled that he could set aside
his differences with Thaksin.
“What’s past is past and I look only to the
future,” Prachai said. “If we need to fight we will fight, but after the
fighting we need to forgive the past.”
“Singapore
is the best model”
So what would a Prachai Leophairatana
administration look like? In what may come as a surprise given the
anti-Singaporean overtones of the anti-Thaksin protests last year, Prachai sees
the island nation as an ideal model for Thailand—not unlike the deposed
Thaksin.
“Singapore is the best model,”
Prachai said. “If we follow that model, Thailand will be a very powerful
country.”
“If [Singapore founder] Mr. Lee Kuan Yew
could do it, so could Mr. Prachai Leophairatana,” he added.
Prachai hopes higher civil servant wages
will lead to an efficient, corruption-free government that is similar to that
in Singapore.
Meanwhile, his new “welfare state” would increase the standard of living among
Thais, he claims.
Human rights workers may be wary not only
of Prachai’s fondness of Singapore, but also for how he would deal with the
military junta in neighboring Burma that brutally shot down peaceful protestors
about a month ago in the largest pro-democracy demonstrations since 1988.
“I don’t want Myanmar
to interfere in Thailand’s
business,” he said. “Myanmar has some very clever people with wealth. They can
solve their own problems.”
The petrochemicals entrepreneur added that Thailand, which receives about a third of the
country’s gas from Burma,
is not overly dependent on the rogue state.
“Myanmar depends on us because we
are the consumer,” Prachai said. “We can cooperate. They are happy and we are
also happy.”
Prachai is also against privatization of
state enterprises, a stance that’s not surprising given what happened with TPI.
In a veiled reference to his former company, he said: “If we are a capitalist
country then we have to return private assets to the private sector. We are not
a communist country.”
Along those lines, he said his party is not
“against foreigners.”
“We’ll encourage foreigners to invest in Thailand but to
come clean and not use nominees,” Prachai said. “We’ll try to make everybody
happy.”
Indeed, making everyone happy seems to be
Prachai’s strategy as he heads into the election. It remains to be seen whether
he is simply a paper tiger or if he can muster up enough votes in two months to
become a political heavyweight.
“We’ll wait to see which party gets the
most votes and then form the government very fast,” Prachai said. “It can be
done overnight. Everyone knows each other; everybody should be happy.”
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