Military, dictators, and money

2 05 2021

There’s a story at something called the Atlas Institute for International Affairs which sounds very 1960s and argues that militaries kept “fed” with taxpayer funds don’t intervene politically. This long discredited notion is in part based on work on Thailand. The fact that coups in Thailand bear no relationship to that military’s ability to grab loot from the taxpayer should alert the authors. Think of “self-coups,” coups against military leaders and other rightists, and, most recently, the coup against Yingluck Shinawatra, when spending on the military increased.

That said, there’s no doubt that Thai military leaders love kit and money. One graph in the Atlas story demonstrates how the military has benefited by sucking the taxpayer of the people’s money.

Military spending

What is clear, is that following the 2006 and 2014 coups, the military has been rewarded and the taxpayer filched. We might also observe that military and military-backed regimes also shovel taxpayer funds to their ally, the monarchy.

The other group that does well following military political interventions is the Sino-Thai capitalist oligarchy and their conglomerates. They get to such at the taxpayer teat via the contracts and concessions doled out by the regimes that reward their loyalty to military and monarchy.

Several times already this group has come to the rescue of Gen Prayuth Chan-ocha’s regime. And as Prayuth’s mafia coalition struggles with the virus, once again, Thailand’s top business groups “offered to join the government in a mass rollout of Covid-19 vaccination from June as the Southeast Asian nation grapples with its worst coronavirus outbreak since the pandemic began.”

Gen Prayuth’s faltering vaccine “strategy” has the support of “the Thai Chamber of Commerce, the Thai Bankers Association and the Tourism Council of Thailand,” with special mention made of “[b]illionaire Dhanin Chearavanont’s Charoen Pokphand Group and VGI Pcl…”. VGI is the profitable advertising arm of the Skytrain enterprise owned mostly by the Kanjanapas family.

It seems that these groups plan to not only prop up the regime, but the king’s vaccine company as well:

Thai owners of malls, commercial real estate and industrial parks will provide spaces for vaccination camps once the country receives more vaccines from June, while other businesses will assist in distribution and logistics, communication with the public and procurement of more doses….

The Bangkok Post – which is interlinked with the conglomerates through directors and major shareholders – manages to come up with the outlandish claim that, like frontline health workers, the “men in suits turn saviours,” joining “medical heroes in trying to give [the regime’s] slow vaccination drive a shot in the arm…”. These are, it claims, “a crop of saviours stepping out of their boardrooms to rally behind vaccine procurement and national vaccination efforts…”.

Observing that the “country’s economic powerhouses are being seen as an emerging sturdy force that can help prop up the government…”, the Post doesn’t acknowledge that, so far, they haven’t actually done anything apart from prop up their regime.

Of course, more vaccination is also good for business, so the tycoons are in a win-win-win situation. And, propping up the Gen Prayuth and his limping regime of hucksters, criminals, and thugs, guarantees profits, concessions, and contracts.

Money greases a lot of wheels, but the benefits flow mostly to military, money, and monarchy.





Gorging on state funds

21 06 2020

Reading the media the past couple of days and we feel like the regime, its ministers and its buddies are engaging in gluttony, seemingly gorging on state coffers.

One deal we posted on them recently got more press coverage:

The Eastern Economic Corridor (EEC) Office’s Eastern Special Development Zone Policy Committee yesterday signed the [290-billion-baht] deal with winning concessionaire, U-Tapao International Aviation Co, an offshoot of the BBS Joint Venture that won the bid to develop the “aeropolis” in Ban Chang district of Rayong Province….

…[T]he BBS Joint Venture comprises Bangkok Airways, which owns 45% of the shares, BTS Group Holdings which owns 35%, and Sino-Thai Engineering and Construction (STEC) which owns 20%.

So we can identify two conglomerates involving two of the countries wealthiest Sino-Thai tycoons – the Prasarttong-Osoth family at Bangkok Airways and the Kanjanapas clan at BTS. It was Forbes lister Prasert Prasattong-Osoth giving advice to Gen Prayuth Chan-ocha recently. It seems advice doesn’t come cheap. Then we have Sino-Thai Engineering and Construction:

Interesting. But what can we expect from people who are used to having with state officials in their pockets.

Then we saw that idea from convicted heroin smuggler and Deputy Agriculture Minister Thammanat Prompao for seizing land  illegally occupied by resorts and hotels, and then renting it back to them. Brilliant! Thammanat is already a baht billionaire and this looks like a surefire way to double money and pay for more of his big brother’s parliamentary seats and maybe even some watches. A Bangkok Post editorial commented that the scheme “is so outrageous that it should be dropped immediately…”.

And what about the news that the “Finance Ministry is ready to consider retail operators’ proposal for tax breaks on shopping to stimulate domestic spending…” with 50,000 baht per shopper! Now, who could that help most? We suggest it would throw shiploads of money into the big retailers, like the Chirathivat and Umpujh clans who are also Forbes listers.

It also potentially helps out the royal family and specifically Princess Sirindhorn, a member of the country’s wealthiest family that already scoops up billions in taxpayer funds. It was Chadatip Chutrakul, chief executive of majority royal-owned Siam Piwat Co, the operator of Siam Paragon, Siam Center and Iconsiam, that “said the government should come up with measures to compel people to leave the house and spend more.”

Happy to grab more loot

An academic once calculated that Princess Sirindhorn’s shareholding in Siam Piwat provided more than US$55 million per year from her property in the Siam-Ratchaprasong alone. She may be a bit short this year, so the state purse becomes a surrogate source of wealth.

Such “private” deals seem to be gathering pace under the virus crisis and rehabilitation plans. Recall how just a few weeks ago, the biggest of the business whales, multi-billionaire Dhanin Chearavanont was urging the regime to turn the country into a ‘safe haven’ for wealthy visitors.” His wish seems to be the regime’s command, with Tourism Minister Phiphat Ratchakitprakarn declaring that the “government’s tourism-revival strategy is to target big spenders seeking privacy and social distancing in the Covid-19 era, rather than try to attract a large number of visitors…. He added that the virus “provides an opportunity to reset the sector, which had become reliant on Chinese groups and backpackers…”. With 11 million Chinese tourists in 2019 and a total of almost 40 million, it seems there’s a determination to crush most of the industry and all that flows from it to every other part of the service sector, which before the virus accounted 46% of total employment and 57% of GDP.

And, these “private” deals are being institutionalized, with the regime reviving a Prem Tinsulanonda-era idea, agreeing with the private sector “to revive the Joint Public-Private Consultative Committee (JPPCC) as a core forum for the two to work together on solutions for the country’s social and economic rehabilitation after the pandemic.” That was first suggested a year ago but looks increasingly likely to become a processing terminal for turning state funds into private gains.

Finally, we may have missed the announcements, but it seems that the long-delayed contracts for the Sino-Thai high (probably medium) speed railway are being doled out. If the reporting is right, it suggests smoke-filled rooms and cosy deals. We quote the Bangkok Post:

SRT governor Niruj Maneepun yesterday told the media that Contract 2.3 is worth 50.6 billion baht, which includes funds for the railway system, rolling stocks and staff training….

The signing of the contract will be carried out in October as planned, Mr Niruj said.

Contract 2.3 is one of seven railway contracts worth a total of 179.4 billion baht for the Bangkok-Nong Khai High-Speed Train Project. Contract 2.3 would cover the project’s first phase, which is a 253-kilometre stretch from Bangkok to Nakhon Ratchasima….

The construction for the whole project has been ongoing since 2018 and it is expected to finish in 2023. [In fact, very little construction has occurred, apart from a very short section near Nakhon Ratchasima.]

So far, the SRT has said the project is making progress, noting it is finding contractors to develop all seven phases. It said a few have already agreed and signed some of the contracts.

That doesn’t look like open tendering, not that such systems stand in the way of the transfer of funds to private sector cronies and giant corporations.





Corrected: The tycoons and the junta

3 06 2017

This is a corrected post. We became aware that the search function we used at Forbes to list Thailand’s tycoons returned something other than a full list. We have now located a more reliable list at Forbes and have rewritten the post based on the correct data. Thanks to a reader for questioning us about the data, causing us to go back to the source.

At the same time, we remain cautious about the data given that the totals in the global list do not exactly match those in the Thailand list.

There’s been a lot of talk about the military dictatorship having done little for the economy. One group is benefiting. That’s the junta and its allies in state enterprises, those on the take, those raking in commissions and the various puppet appointments. But their takings, while huge by the standards of the average Thai, are not the measure of how the tycoons are doing.

That group are the richest Thais, mostly the Sino-Thai tycoons and a couple of foreigners who have made their fortune in Thailand.When we had the wrong data, we indicated that the wealth of the top 10 had decreased. This is corrected in the table below, showing a very large increase in wealth.

We know this from the listing in Forbes of the world’s US dollar billionaires and, now, from the list of Thailand’s billionaires. Over the years, we have listed the top 10, so we are sticking with that so that a comparison can be made.

The table compares 2014 wealth (Forbes 2015) and the year of the coup and the 2016 figures (Forbes 2017).

The totals for the top 10 show that their combined wealth has increased by almost $16 billion. The top two families have increased by more than $9billion.

When we had the data wrong we asked: How long will these economic whales put up with a military dictatorship that delivers economic decline? Now that the data has reversed the position, we can only imagine that the tycoons are loving the junta.