The virtues and limitations of Thaksinomics have also inspired heated debate. Some claim that Thaksin's economic programs are little more than populist handouts and easy-credit schemes that, like a caffeine high, won't produce lasting benefits. Some argue that his policies have contributed to a worrisome buildup of consumer debt that will exacerbate the next economic downturn. Thaksin's measures are "artificial," says Sompop Manarungsan, a political economist at Bangkok's Chulalongkorn University. If these "welfare-like" policies continue, "you'll have more and more distortions in the economy that can hurt future development," Sompop adds.

Then there's the controversy over Thaksin's own business empire. When he became Prime Minister, he complied with Thai law aimed at avoiding conflicts of interest among public officials by transferring most of his holdings to his son and two teenage daughters. Still, his critics claim that firms controlled by the Thaksin family, led by wireless-and-satellite telecommunications company Shin Corp., have benefited from government policies. Somkiat Tangkitvanich, a research director at the Thailand Development Research Institute, a nonprofit think tank, cites as an example a 2003 regulation introduced by the government that imposed an excise tax on companies in the telecom sector. He argues that this created a barrier to new entrants and protects Shin's position as the country's dominant provider of mobile-phone service. "I believe that the benefits generated by the economic boom under Thaksin's regime don't distribute equally among the people," says Somkiat. However, Shin's assistant vice president Panya Thongchai calls such criticism "unfair and misleading," noting that the excise tax applies equally to all players in the industry, including the Thaksin family's firm. Government spokesman Jakrapob denies that Thaksin's administration has pursued policies that specifically benefit the Prime Minister's companies, noting that "when the economy does well, every company benefits."

Yet Thaksin has endured such controversies with only minimal political damage. His approval ratings have rarely dropped below 50%, and are currently approaching a remarkable 80%. Panitan Watanayagorn, a political analyst at the Institute of Security and International Studies at Chulalongkorn University, sees similarities between Thaksin and U.S. President George W. Bush, another polarizing leader who was re-elected despite furious opposition. Like Bush, Thaksin "is very good at making politics simple so that the people can understand," says Panitan. "He has the ability to appear ordinary. He is the people's politician. The perception is that he can fix whatever goes wrong"—an impression that was reinforced recently by Thaksin's quick, assertive reaction to the tsunami disaster.

When Thaksin took office, Thailand was still suffering from the effects of the Asian economic crisis of 1997-98. Growth was solid but hardly electrifying, and business confidence was fragile. At the same time, Thailand was being buffeted by global economic shifts. For decades, growth had depended on exports of low-cost goods like sneakers to the U.S. and Japan, but Thailand was losing its competitive edge to China's manufacturing juggernaut. Thaksinomics offered a solution: strengthen the rural sector and uplift the poor to develop a strong domestic economy, so that the country would be less dependent upon exports and less vulnerable to external economic forces such as the buying power of the overstretched American consumer. "The old strategy simply won't work," explains Uttama Savanayana, a vice minister of finance. "We had to come up with something new. We had to start on the inside."

Among other programs, Thaksin built a marketing network to help small craftsmen export their wares, established a People's Bank that offered microloans to budding entrepreneurs, and introduced low-cost health care. Morgan Stanley economist Daniel Lian, who recently wrote a report in which he praised Thaksin for his "comprehensive road map charting the future of Thailand," says: "I don't find a single person who has offered a policy alternative to Thaksin's." The economy has also performed well beyond the policies of Thaksinomics, benefiting from robust global growth, high commodity prices and increasing trade with China. Thai factories have been running at 75% of capacity in recent months, a seven-year high, and unemployment fell to 1.6% last year from 5.7% in 2000. Says Goldman Sachs economist Adam Le Mesurier: "I don't think the economic recovery in Thailand is a mirage."

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	Thailand's Bloody Monday [Nov. 01, 2004] In a day of horror, scores of Thai Muslims in the country's restive south die while in military custody, sparking outrage at home and abroad Southern Discomfort [Mar. 22, 2004] Thailand's Prime Minister is used to getting his way, but the country's restive south seems rapidly spinning out of control The Thaksin Effect [Oct. 21, 2003] Is Thailand's Prime Minister revolutionizing his country's economy—or creating another bubble? The Killing Season [Mar. 05, 2003] Thailand's swift, popular crackdown on drugs has claimed more than 1,000 Publish And Perish [Mar. 25, 2002] Thailand has prided itself on its freedom of the press. Now, the country's (over?)sensitive PM is starting to crack down In The Clear [Aug. 07, 2001] Acquitted of corruption charges last week, Prime Minister Thaksin Shinawatra must now make good on his vision for a more prosperous Thailand More Related Items | Search all issues of TIME Magazine