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COVER:
CHUAN INTERVIEW:
SILVER LINING:
VIEW FROM WASHINGTON:
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ASIA | March 30, 1998 VOL. 151 NO. 12 |
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His humility and modest roots carry a price. Colleagues and political observers suggest his simple background has left him somewhat in awe of Thailand's military-royalist elite. Chuan was the first "commoner" from outside the political establishment to become Prime Minister. "That is why he acts so cautiously," observes historian Charnvit. But Chuan may be starting to shed such insecurities. While the government of his predecessor, Chavalit Yongchaiyudh, dithered over the requirements of the International Monetary Fund's $17.2 billion bail-out program and enacted-and then rescinded-a gasoline tax, Chuan's men moved quickly. First they shuttered 56 insolvent finance companies, many of them run by well-connected businessmen. Then they slashed the government budget, imposed the gasoline tax and adopted critical institutional reforms, like a major revamp of the country's bankruptcy law. Some of those measures were clearly unpopular, and Chuan warned his countrymen that rebuilding the economy was going to be painful. The IMF was cheered, and international banks agreed to a delay in the repayment of millions of dollars of short-term debt. Thailand was even beginning to attract new foreign investors-among them George Soros, whose currency speculation allegedly helped accelerate the baht's dive last year. Chuan received a further boost from Washington. He returned from his tete-a-tete with President Bill Clinton last week with a bundle of goodies worth $1.7 billion, including trade financing to help manufacturers obtain raw materials and the cancellation of a contract to buy eight fighter jets Thailand can no longer afford. Clinton's endorsement seemed aimed both at strengthening Chuan's position and at sending a message to other leaders, particularly Indonesian President Suharto, to get with the IMF-led reform program. Clinton's support, coupled with the strengthening baht and a rebounding stock market, will probably give Thailand some breathing room: creditors are expected to refrain from calling in the country's $38 billion in short-term debt. A large chunk was rolled over in December, and another big portion due this month probably will be extended as well. "Thailand is the good student among the Asian countries, so we do not want to reduce our exposure here," says Masatsugu Nagato, general manager of the Industrial Bank of Japan in Bangkok. "The government is very dedicated and professional. So far, so good." Clinton's support has eased Thais' resentment over the slow American response to their plight. Yet no matter how much backing the U.S. gives, Thailand is headed for more troubled times. As shaky companies go under, the ranks of the unemployed are expected to swell by nearly 60% this year to as many as 2 million, representing 6% of the workforce. Still, that may be manageable. "In the scheme of things, it isn't the double-digit levels of Germany," says Peter Brimble, head of the Brooker Group, a Bangkok consulting firm. Instead of despairing, urban Thais for the most part are scaling back from the heady days of consumerism when sales of Mercedes-Benzes, Johnnie Walker Scotch and mobile phones were, on a per-capita basis, among the highest levels in the world. "We used to eat at restaurants every day for lunch and dinner," says Duangrat Siddhisaributra, 37, a deputy vice president at Jardine Fleming Thanakom Securities. "Now we eat at noodle stands." Her husband, Chatichai, 36, quit his job as marketing manager at one of Bangkok's suspended finance companies last September. He hasn't found work since. Duangrat and Chatichai have given up trips to the movies, vacations abroad and purchases of new clothes and jewelry. "The very young ones who made money fast are facing more serious problems," says Duangrat. An employee of her department, a 25-year-old broker, jumped to his death from the top of their Silom Road office building in January-overwhelmed, his family and colleagues suspect, by a mountain of debt.
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orn the third of nine children to a Chinese-language teacher and a market vendor in the southern province of Trang, Chuan initially studied art but abandoned that as a career. "I felt a responsibility to do something to help support my family," he told Time. His interest in current events grew from listening to his father and friends debate. He got involved in politics in the 1970s, when students and intellectuals began challenging Thailand's ruling military regime. After a violent crackdown on student protesters in 1976, the military took control and labeled many activists, including the relatively moderate Chuan, communists. He fled Bangkok for his hometown, where he wrote a novel. He still draws, often sketching small pencil portraits of people he encounters. "I find by studying faces as an artist I can get to know people better," he says. Some critics, while conceding that Chuan's modest life-style is genuine, suspect that he promotes it to boost his reputation. "You'll notice he often shows up in public with a button missing from his shirt," says Sulak Sivaraksa, a social critic. "Someone notices it, and he says he can't afford someone to mend his clothes for him. Women love that."