Mr T goes to DC

12 November 2001

Thaksin will shortly make a visit to Washington DC. What will he get?

These visits are a bit like the tribute missions in the past. Once upon a time, new Asian rulers sent an envoy to the Chinese court. Later they travelled to the capital of imperial Britain. Now they jet into DC. These visits demonstrate submission to the fount of world power. Also, the visitor gains something in stature from the contact.

Right now, Washington needs friends, even little ones. Day by day, the American war in Afghanistan looks more and more like the Russian war in Afghanistan, or the American war in Vietnam. Two of the most senior members of the administration (Powell and Rumsfeld) are circling the globe, persuading old allies not to waver, and coaxing more countries to rally to the cause. Thaksin will be under pressure to make his Washington photo-op and sound-bite more meaningful. Perhaps a backdrop of the battered Pentagon. Perhaps a more fulsome statement of Thailand’s unwavering support for its old patron.

For Thaksin, this is a chance to ask for a favour or two. He should not be squeamish. American presidents have not been squeamish about such things in the past. Clinton forcefully and successfully asked for Thailand to lift trade barriers for US tobacco firms.

Nor should Thaksin feel that America’s suffering and America’s entanglement in war make such requests unseemly or impolite. Rather, he should follow the example of America’s own corporations. They are treating the war as both a tragedy and an opportunity.

Within two days of the September 11 attack, the heads of the major US airlines appeared on TV. Unless government gives us a big bailout, they said, we will slash jobs and lead the way deeper into recession. It worked. Within days of the first anthrax alert, the big pharmaceutical companies carpet-bombed Washington with lobbyists. Between them, these companies have a lobbying budget of nearly US$ 200 million, and 625 registered lobbyists, mostly ex-bureaucrats, ex-Congressmen or their aides. ‘This is a great time to buy some good will’, said one of them. First, they blocked demands for the pharmaceutical companies to supply free drugs or cancel patents to help the defence against biological threats. Then they counter-attacked by asking government to extend valuable patents on best-selling drugs, and relax industry controls which cost them money. Health activists complain this cosier relationship between government and pharmaceutical companies will make health care even more expensive, and will undermine efforts to get affordable treatment for AIDS.

But this was a mere skirmish compared to the battle over the stimulus package. Only days after Congressmen had stood together on the steps of Capitol Hill to sing ‘United We Stand’, they were engaged in wallet-to-wallet combat over tax-cuts to keep the economy going. Corporate lobbyists came up with some creative new economics. This was, some said, ‘an investment recession, not a consumer recession,’ so government should throw dollars at companies not people. Besides, said others, the best way to stimulate consumer spending is not to cut personal taxes so people spend more, but to give all the assistance to corporations so that they don’t slash jobs. On this logic, the legislators planned to cut corporate taxes, and refund some already paid, to the tune of US$ 112 billion. Needy companies like IBM, which made profits of US$5.7 billion last year and paid only 10.8 percent in taxes (well below the nominal rate of 30 percent), would get a refund of US$ 1.4 billion.

Lobbyists fought bravely to get their companies on the list qualifying for special refunds. Commentators talked disgustedly about the ‘greed and rank opportunism’ of this corporate lobbying. A liberal institute ran full-page ads with the headline, ‘Sacrifice is for Suckers.’ Paul Krugman noted that the companies included on the list for special tax breaks ‘tend to be in the energy or mining businesses... tend to be based in or near Texas... and seem to be companies that gave large, one-sided donations to the Republican Party’. He hinted that many of them are connected to Dick Cheney, the vice-president. Krugman came very, very close to using the term ‘cronyism’ he likes to apply in Asia.

So Thaksin should not be kreng jai about asking favours from an embattled American president. That would simply not be the American way. He cannot expect too much, because Thailand is not directly strategic for this war. But Bush’s advisers are aware of the bad feeling in Thailand over the US handling of the 1997 crisis, and over the opposition to Supachai’s candidacy for the WTO. They want to change this feeling. That gives Thaksin some leverage. What will he request?

Chang Noi would hazard two guesses. First, military hardware. In the current hawkish mood of Washington, that request would get a sympathetic, maybe enthusiastic response. It would also follow the pattern we have seen since February 2001. With Chavalit in the co-pilot’s seat, the military’s star is rising. The army got a budget boost for the border drug war. The military’s scope of operation was enlarged to include economic projects. The new advisors’ corps has been created to provide outdoor relief for remaindered generals. The purchase of a few more F-somethings would follow in this trend.

Second, Thaksin may ask the US administration to look on indulgently while he and his friends sabotage the liberalisation of telecommunications and other service sectors under agreement with the WTO. Again, this sort of request is likely to find a sympathetic ear in Bush’s Washington. To this administration, government patronage of special business interests is not the original economic sin, but the true spirit of capitalism.