The Nation in an editorial is back to its ridiculous best. This time trying to explain sufficiency economy which is used, as like most of their editorials, as a smokescreen to attack Thaksin. I will ignore there feeble attempt to explain what a sufficiency economy is and look at their attacks on Thaksin. Key quotes:

Thaksinomics is characterised by an unprincipled, often whimsical, economic-management style that is not hedged against the negative impact of globalisation and the corroding effects of political corruption. Thaksinomics could have had a devastating effect on the Thai economy if Thaksin had not been stopped when he was removed from power on September 19. Policies implemented under Thaksinomics coupled with populist policies that pandered to the unprincipled wants of people have accumulated whopping Bt150 billion worth of debts, both on and off the budget.

These debts accumulated mostly because Thaksin rushed through populist policies to score quick political points without concerning himself with the crucial question of how to fund them, as a responsible leader should. The sufficiency-economy model is far from perfect and still has room for improvement and refinement but nevertheless diametrically opposed to everything that is bad about Thaksinomics. Our question to critics who jump to conclusions by dismissing it out of hand as “inward-looking” or “anti-foreigner”, among other negative labels is: what is there not to like about it?

It is important for the Surayud government to continue to try to explain it to foreign governments and international investors. But of greater importance is determining how to educate our citizens, particularly the rural masses still enamoured with Thaksin’s populist policies, about the financial ruin that Thailand may have narrowly averted when corruption-prone Thaksin was removed from power in disgrace.

People must shown Thaksin’s irresponsible populism for what it was. They must understand that his game was based on the false premise that the entitlements he showered on people, particularly rural folk, were something they could enjoy without worrying about how the government would pay for it. The truth of the matter is there is no such thing as a free lunch. Taxpayers will have to start paying for Thaksin’s populist excess and the mountain of debt he incurred.

COMMENT: The Asian Development Bank (ADB) states:

To gauge whether a country’s fiscal position is sustainable, the ratio of pubic debt to GDP is key.

Ok, knowing this you would have to assume that the ratio of public debt to GDP got worse under Thaksin and the country’s fiscal position was unsustainable. Au contratrie. Thaksin become PM in January 2001 and the ratio of public debt to GDP at that time is explained by ADB:

Thailand’s public debt increased from about 15 percent of GDP in 1996 to about 58 percent of GDP by end of 2000. Financing this debt absorbed 10.7 percent of government revenues in FY2000 compared with 4.5 percent in FY1996 (para. 15).

So Thaksin comes to power to find a dramatic increase in public debt with the government using almost 11% of revenues to finance this debt. Under Thaksin the ratio of public debt to GDP decreased from just under 58% at the end of 200 to 41.7% in 2006. Yes, you read that right the ratio of public debt to GDP fell under Thaksin. Far from there being a “mountain of debt” the country was in a much more sustainable fiscal position. The so-called “financial ruin” that Thaksin brought to the Thai economy included budget surpluses between 2003-2005. The Nation’s editorial is so devoid of any logic it is breathtaking, but we came to expect that from The Nation.

What do you think the new sufficiency economy government did when they came to power? Instead of running a budget surplus, they are going to run a deficit of 146 billion baht in the 2007 budget of which 40 billion baht can be blamed on Thaksin. The other 100 billion baht is going to the military and other projects.

The Nation which dislikes “populist policies that pandered to the unprincipled wants of people” was supportive of the extra 200 billion baht in the 2007 budget in another editorial just the other day:

Although exports should continue to post double-digit growth figures, the Thai economy really needs a fiscal prime-pumping to keep on track with a 4-per cent to 5-per cent growth rate.

COMMENT: That money will be spent on rebranded “populist” policies, but since Thaksin is not behind them, it is not just ok, but gets The Nation’s tick of approval.

btw, if you are wondering what prompted The Nation’s editorial. Well like most puppets The Nation was just passing on what they had been fed as the Bangkok Post reports:

Deputy prime minister and finance minister Pridiyathorn Devakula hit back at ousted premier Thaksin Shinawatra Wednesday, saying his so-called “Thaksinomics” has caused Thailand huge debts.

“Thaksinomics, if let it run for another three years, would cause the country a crisis,” M.R. Pridiyathorn said at a seminar entitled “Investment direction 2007 and how to handle the volatile baht.”

“Although economics under Thaksinomics grow, they expand with no limit,” he said, adding that the previous government had debt accumulated up to 1.5 trillion baht.

M.R. Pridiyathorn said Thailand could be like Argentina if Thaksinomics were to be continued much longer.

COMMENT: And this guy is finance minister. The crisis would have been a low public debt to GDP ratio. Hardly a crisis.