The salary man and the entrepreneur

25 October 1999

For the city people in Bangkok, the coming election is shaping as a contest between Chuan’s Democrats and Thaksin’s Thai Rak Thai—a contest between old and new, familiarity and adventure, safety and risk.

Chuan Leekpai became the first elected politician who is widely acceptable despite having no official title or background. How? Because he seems just like a bureaucrat. He rose slowly. He acts cautiously. He clings to the rules. He accepts a whole culture of hierarchy and deference. Thailand had long been run by bureaucrats. Chuan offered the country a leadership style which was familiar and unthreatening. In the eye of the 1997 crisis, he was welcomed back not just because of his economic team, but as an antidote to leaders who had promised more but delivered disaster.

Thaksin Shinawatra offers a complete contrast. His main credential is that he is the most successful self-made entrepreneur of the past generation. He came from almost nowhere to net worth of a hundred billion baht in the blink of a boom. And he managed to hang on to a lot of that through the crash. He stands for enterprise, risk-taking, adventure, vision—something completely new in Thai politics.

Of course, the contrast between the two is not really so simple. Chuan acts like a bureaucrat, but his maternal forebears were traders and his party is stuffed with businessmen. Thaksin presents himself as an entrepreneur, but he started his career as a bureaucrat, and has made his Thai Rak Thai party into a second career for retired senior officials.

The difference between bureaucrats and businessmen is basic to Bangkok’s political culture. The city rose out of the swamps as both an administrative capital and as a port of trade. The two functions coexist but compete. The official mind and the profit motive are the two sides of the city’s soul. The recent exchange between Thaksin and Chuan reverberated through the local press because it brought out this fundamental division, and helped to define the choice in the coming election.

On 3 October, Thaksin Shinawatra tried to make a little joke. He asked: how come a salary man even in a high position like the prime minister cannot buy a house of his own?

The Democrats leapt at the opportunity to damn Thaksin. He looked down on all salary men. He had become rich himself through monopoly concessions which took unfair advantage of salary men. Chuan fired back: "I did not enter politics for money politics. I’m not in it for business or profit." The exchange brought out the contrast. Chuan as public servant. Thaksin as money politics personified.

Thaksin extricated himself with some elegance. He made the original remark, he said, to emphasise the difference between salary-earning and enterprise. It’s fine being a salary man, but "if I’m the government, I will open up choices for people who have the leaning and the ability to be entrepreneurs. People who earn salaries now will have the opportunity to quit and become entrepreneurs without facing excess risk." Chuan as the old official way. Thaksin as the new vision of enterprise.

Back in the early stages of forming Thai Rak Thai, Thaksin met with a group of university lecturers. One asked him: don’t you think people will worry that such a rich man in politics will simply buy everybody’s support. At first, the question confused him. Then he recovered and countered: "But acharn, don’t you think it is better for a politician to be very rich rather than very poor?"

Thaksin is making a direct appeal to the "business" streak in Bangkok’s political heritage and culture. He offers entrepreneurial aggression (rather than constitutional reform) as the route for transforming the way Thailand is run. His 1994 campaign poster showed him pointing aggressively towards the future in a startling image of dynamism and vision. His TRT manifesto promises to "bring about reform in the fundamental structure of the country in all respects, so that Thailand is strong, modern and ready to face the challenges of the world in the new era". In this exchange he was arguing: will Thailand get out of the crisis by more Democrat-style cautious management? Or does it need an entrepreneurial rip?

Thaksin’s pitch on the importance of entrepreneurs and the need to support small and medium firms, is an astute appeal to the businessmen who have been crushed by the crisis and who feel neglected by the Democrat Party’s anti-crisis strategies. His espousal of agrarian revival, mixed agriculture, and self-reliance shows an interest in grassroots agrarian issues which is totally lacking in other parties. His critical approach to globalisation and neo-liberalism are a welcome change from the slavishness of the Democrats.

But the "bureaucrat" streak in Bangkok’s political culture sees all businessmen politicians as "money politicians". In reply to Chuan’s insinuation that Thaksin was just another of this kind, Thaksin argued: "Money politicians are people who use politics to do business. They may or may not be businessmen. Some non-businessmen in politics have huge unexplained bank accounts. But established businessmen who enter politics without profit-seeking are just businessmen-in-politics. It’s a question of who cheats and who doesn’t."

Thaksin contends he is above the grubby money politics which characterised the 1990s. But many worry that what is really new about Thaksin is that he represents a confusion of money and politics on a new scale.

Throughout his business career, he has relied upon powerful connections to make profits. His first success was in selling computers to the whole police department. By chance, he secured this deal very shortly after he had married the daughter of the head of the police research and planning division. At the end of the 1980s, he secured a bunch of telecommunications concessions when the Chat Thai party was in power. By chance, his family had long been stalwarts of the Chat Thai party in Chiang Mai. His uncle had been a Chat Thai MP and (by chance) deputy minister of communications.

Again by chance, he entered politics after the Chat Thai party fell from grace, and after his rival, CP’s TelecomAsia, beat him out of the famous 3 million telephone line project in 1991. In 1995, his competitors raised a stink when he seemed to be using his political position to angle for another telephone-line concession. Again by chance, he began forming Thai Rak Thai after the Chavalit government had become totally infiltrated by his business rivals, who were busily trying to undo his monopolies, from hand phones to satellites.

By chance too, Thaksin has directed his business expansion into areas connected to government licenses, concessions and interests. He has brought into several companies involved in infrastructure development, notably the Bangkok Expressway Consortium (BECL). By chance BECL won several concession during the Banharn Chat Thai government in which Thaksin was deeply involved.

His business interests are completely entwined with government policies and government concessions. Even though he claims his politics and his business are separate, nobody believes him. That is why there is the persistent (and totally unsubstantiated) rumour that he was the only other person to make money from foreknowledge when the baht was floated in July 1997.

The "salary man" exchange might have been a one-day wonder. It blew up because it helped to clarify the coming electoral contest in the city. What does the city voter want? A familiar old product or a new brand. Bureaucratic caution or entrepreneurial risk. The internationally approved strategy of recovery which is decimating Thailand’s capitalist class, or a leap of entrepreneurial vision. The downside from the continued bureaucratic foot-dragging on reform, or the downside from Thaksin’s superior variant of money politics?