That test came in the form of the corruption trial of prime minister Thaksin Shinawatra. Mr. Thaksin is one of the wealthiest people in Thailand; his son recently replaced him as the wealthiest. Most of this wealth came from Mr. Thaksin's diversified business interests including his majority stake in the national telecom service. Before he was elected prime minister in January 2001, Mr. Thaksin held various other ministerial jobs. That was when the alleged corruption began.
In an effort to avoid the corruption scandals that previously plagued Thailand, the new Thai constitution requires rigorous reporting of income and its sources obtained by government ministers. The classic non-reporting trick used by Thai ministers was to "sell" shares of closely held corporations to spouses, children, and other relatives. If the shares are "sold" nominally, the minister need not report the income. This is precisely what Mr. Thaksin did with shares of his telecom company, but he forgot to report the "sale" because, as he told the court during his trial, his wife was more knowledgeable of those transactions than he was.
As it had for many of his predecessors, the hide-the-shares trick worked for Mr. Thaksin until he became prime minister. Then his anti-corruption campaigns took on a sense of hypocrisy and rather resembled the chorus to that old Eric Clapton song: "Before you accuse me, take a look at yourself". And Mr. Thaksin's opponents did not have to look hard to find the evidence to accuse him.
After a long trial that included Mr. Thaksin testifying for his defense, the Thai court acquitted the prime minister of all wrongdoing. Had he been convicted, Mr. Thaksin would have been banned from politics for five years. Despite the question of whether his exoneration was in strict accordance with the Thai constitution, the verdict wreaks of justice by convenience. Mr. Thaksin often declared that the verdict would affect him and the entire Thai economy. No doubt that is because he and his corporations control so many companies traded on the Thai stock exchange. The day of his acquittal, the Bangkok stock exchange gained 4%.
But was the verdict just and proper? Probably not. The acquittal of the prime minister will not of itself reverse the downward slide of Asian economies. The one-day 4% rise of Thai stocks was too little perhaps a good bit too late. Mr. Thaksin - who seems to choose his advisers based on personality rather than experience - recently replaced the governor of the Thai central bank because the bank (Mr. Thaksin believed) was not following prudent interest rates policy. The policy the bank did (and continues to) follow was entirely IMF-approved. Most central bank policy changes are based on reasonable guesses; the outcome of a particular policy is never completely ascertainable, and nothing astounding has happened since Mr. Thaksin's ally was installed there.
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