Wednesday, January 31, 2007

Singapore in Thailand – enemy or victim?

Singapore and Thailand have enjoyed close ties for many years. Bangkok, Phuket, Koh Samui and Chang Mai are popular vacation destinations for many Singaporeans. In the 2004-2006 period, Singapore was Thailand’s third largest foreign investor (and the biggest amongst ASEAN countries). Government-to-government ties were excellent – Singapore NSmen train in Kanchanaburi, and Singapore and Thai civil servants had an exchange programme.

Thai-Singapore ties first began to sour in March 2006 after it was reported that Singapore’s Temasek Holdings had bought a large share of Shin Corp which was owned by then-PM Thaksin’s family. Some politicians (predominantly from the anti-Thaksin camp) and media complained that Thaksin was selling away a strategic asset. The September 2006 military coup which displaced Thaksin put in place a military government which – while not necessarily predisposed against Singapore, since they had welcomed Singapore’s soldiers for many years – realized that, politically, they would have to keep Singapore at arms length.

So when Thaksin visited Singapore in January 2007 and met with DPM Jayakumar (who was apparently an old friend), the Thai junta went ballistic. Aside from canceling the bilateral civil service exchange programme and rescinding an invitation to Singapore’s foreign minister, the Thai government (notably coup leader Gen Sonthi) has more recently issued statements that Singapore was eavesdropping on calls between Thai military leaders made through the AIS network (which is owned by Shin Corp). Singapore and Shin Corp officials have both denied this.

Beneath the bluster, I have tried to analyze why some Thais are angry with Singapore. So far, I have come up with:
  1. Temasek should not have purchased Shin Corp shares. It should have realized that the sale of such an asset to foreign owners would be cause for instability in Thailand.
  2. Singapore is out to spy on Thailand, and had bought into Shin Corp for this reason.
  3. Singapore showed no respect for Thailand by allowing Thaksin to visit, meet with DPM Jayakumar, and give interviews to CNN.

On 1, I agree. I think we can assume that the shares are worth less today than what was paid for them. Thaksin’s political troubles, the military coup, actions against AIS by the Thai government and their recent economic faux pas etc are all reasons why Temasek should not have purchased Shin Corp shares. Someone in Temasek had probably underestimated the political reaction and felt it was worth the risk. It was a bad investment, period.

I can understand claims that Singapore is out to spy on Thailand; after all, all countries are interested in acquisitions by other military services. But to suggest that Singapore has bought Shin Corp in order to listen to Thai military secrets is ludicrous. I can almost hear the conversation between the Singapore military chief and the PM*.

“Sir, we can get access to Thai military secrets if we buy over Shin Corp.”

“That’s a great idea. How much would it cost?”

“Just US$1.88 billion, sir. I guess we’ll just have to hold off buying our aircraft carrier until next year.”

* Pls note that this is absolutely a figment of my imagination. My SingTel shares do not give me access to these conversations.

Reason 3: Thaksin, as an enemy of the Thai state (or of the Thai junta at least), should also be persona non grata in Thailand’s friends, and some Thai media pundits have alleged that Singapore showed no respect for Thailand by allowing Thaksin to meet DPM Jayakumar and also give interviews to CNN.

However, Thaksin, who has not been charged for any crime, has the same rights as any other Thai national visiting Singapore. He can meet who he wants and go where he wants. These pundits, often the same who harp on Singapore’s lack of press (and other) freedoms, must at least be consistent. Maybe DPM Jayakumar should not have agreed to meet Thaksin. Would you meet an old friend who lost his job (and probably has a lot of colouful tales to share), or yield to the prevailing sentiment in Thailand. That was for him to decide.

It is obvious that the Thai junta is using Singapore as a convenient distraction to avert the attention of the Thai people from the very real economic and security challenges they face. Thaksin’s visit to Singapore came shortly after economic policy announcements had stirred up insecurities amongst foreign investors, and the New Year’s Eve bombings in Bangkok. While Temasek only has itself to blame for making a bad investment in Shin Corp, the current rift in bilateral ties is clearly a result of the Thai junta’s domestic agenda.

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