Gross National Happiness

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With a new caretaker prime minister in place and elections promised for next year, the leaders of Thailand's Sept. 19 coup spent last week reassuring the world that the country was returning to some semblance of normalcy. But will the economy do the same? Interim Prime Minister Surayud Chulanont, a former general installed by the junta on Oct. 1, began his tenure by publicly committing himself to the "people's happiness." But Surayud's definition of happiness, which emphasizes "self-sufficient" economic practices over GDP growth, and consumption of local goods over foreign products, worries some economists and investors?particularly since more than 60% of Thailand's economy depends on exports. "We know General Surayud is a good military man," says Sukhbir Khanijoh, a senior analyst at Kasikorn Securities in Bangkok. "But in terms of economic policy, we don't have any idea what he thinks."

Even before the bloodless coup that overthrew Prime Minister Thaksin Shinawatra last month, Thailand's growth was decelerating, in part because of rising oil prices and months of political gridlock. But the new regime will not necessarily make things worse. "The coup creates near-term uncertainty, no question," says emerging-markets expert Marc Faber, publisher of The Gloom, Boom & Doom Report. "Having said that, I don't think this will have a huge impact on the financial and manufacturing sector." In a reassuring move, the new administration tapped central-bank governor Pridiyathorn Devakula, a respected technocrat who helped extricate Thailand from the 1997 Asian financial crisis, as a top economic advisor. Pridiyathorn spent late last week trying to convince overseas investors that Thailand wouldn't retreat from the global economy or pursue a protectionist agenda. And the health of Thailand's economy, projected to grow by 4% to 5.3% this year, will ultimately hinge on outside factors as well. "Regardless of what government is in power, if oil prices go down next year, then the economy gets a boost," says Supavud Saicheua, an economist at Phatra Securities in Bangkok. That would contribute richly to Thailand's gross national happiness.