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  Bangkok Postcard   (2001)

Imagine Bill Gates running for President and winning--not just winning, but winning big, with his new political party capturing more than half of Congress.

Now imagine that Bill is being accused by the Federal government's anti-corruption board of actions which, if found true, would ban him from political office for five years. But due to the peculiar difficulties in getting witnesses to testify, the trial isn't expected to convene for a year or more.

Finally, imagine that Bill is also under investigation for tax evasion and insider trading, and stands to personally benefit to the tune of billions as his new government deregulates the very industry he dominates.

Not that his own powerful media outlets will necessarily cover the scandals fairly, mind you; their editorial independence is being questioned. Now imagine it's all true--which it is, if you're Thai.

Substitute telecom tycoon Thaksin Shinawatra, newly elected Prime Minister of Thailand and one of the country's richest men, for Mr. Bill, and you have a rough approximation of the new political landscape in Thailand.

Elected by a landslide of rural voters enthusiastic for his grand campaign promises--a one million baht revolving fund for each village, no debt repayments by farmers for three years, and the institution of a low- cost national health care plan--there's only one problem facing Thaksin: there's no money for his generous proposals.

While the economy has improved since the financial crisis swept over Thailand in 1997-98, it is by no means robust; like economies throughout the world, the rise in oil prices has hurt, and the export-driven positive balance of payments is vulnerable to softness in Thailand's largest market, the U.S.

Furthermore, the mountain of bad debt left by the debacle is still a huge drag on the economy and government spending. To resolve the crisis, the government took over billions of dollars in non-performing loans, privatizing government assets and selling bonds to to pay down or refinance the debt.

So far so good--but even as the cost of servicing the public debt has risen to 8% of the budget, the government has been running large budget deficits for the past four years as it attempted to stimulate the flagging economy. Out of a total 2001 budget of about $22 billion, almost $2.5 billion or 11% is deficit spending.

And this doesn't even include the cost of refinancing 500 billion baht of bonds sold in 1998 to cover part of the 2.7 trillion baht of bad debt left by the crisis.

Add these costs to an estimated five more years of deficits--that's government economists' best guess on the earliest possible return to a balanced budget--and you've got a runaway expansion of public debt with no end in sight.

All of this might give prudent minds, such as that of the last Prime Minister, Chuan Leekpai, pause; but voters repudiated Chuan's policy of fiscal restraint and slow recovery, opting for the appeal of Thaksin's quick-fix pump-priming of the rural economy.

How and where Thaksin will find the huge amounts of cash needed to fulfill his promises in a deficit-crippled budget remains to be seen. While the soap opera provided by the myriad investigations into his business dealings and political bobbing and weaving will no doubt entertain the Thai media for years to come, external investors and the lenders which came to Thailand's financial rescue three years ago are not amused.

Even the most casual visitor to Bangkok notices two differences from the pre-financial crash days of 1997: the hefty 68% discount they're getting thanks to the baht's devaluation from 25 to 42 to the dollar, and the dozens of forlorn, half-finished highrises scarring the city's skyline.

On the way back into Bangkok via bus from the island of Ko Samet--an inexpensive vacation spot popular with young Thais on the weekends--I saw a stained half-built highrise sporting a sign reading, in English: "Office Building For Sale--Very Reasonable Price."

Very reasonable, indeed. No doubt a buyer with cash could pick up a few dozen unfinished towers around Bangkok for a very reasonable price.

But who would want to?

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