Outgoing Thai Central Bank Chief Urges Political Reform

[webfact]

Outgoing Thai central bank chief urges political reform

by Kelly Macnamara

BANGKOK (AFP) -- As Tarisa Watanagase prepares to take her hand off Thailand's economic tiller she warns that violent splits in society mean the kingdom's future relies on more than just financial stability.

The central banker, stepping down after nearly four years in the top job at the Bank of Thailand, said new political and social thinking is needed in a nation still reeling from bloody protests that rocked Bangkok in April and May.

"If you look at the economic front, we have been through some major reforms and that is why right now we are resilient, but in terms of politics we haven't yet seen major reforms," she told AFP.

"I think this is part of the growing-up process."

Tarisa, the first female governor in the Bank of Thailand's history and one of just three in the position worldwide, is no stranger to forging her own path through Thailand's often tumultuous political landscape.

Petite and glamorous, the governor has a ready smile that in no way hides the streak of steel with which she has helped to oversee the Thai economy in one way or another since 1975, when she joined the central bank.

She counts one of her greatest achievements as securing independence for the central bank in the face of persistent resistance.

After a near decade-long battle, she helped push through laws giving the institution freedom from political interference in the wake of the 2006 coup that overthrew former premier Thaksin Shinawatra.

But Tarisa is clearly disappointed that the economic progress the country has made has not been replicated in a political system prone to accusations of corruption, scandal and military interference.

"I would like to see that we can migrate from a developing country to a developed one and that does not require only economic progress," she said.

The Bank was relieved that the fallout from the "Red Shirt" anti-government protests -- in which 91 people died and nearly 1,900 were injured -- was not more serious.

Tourists, initially daunted by images of violent clashes between the military and demonstrators in Bangkok, are slowly returning while foreign investment has also proved buoyant.

But Tarisa warned against becoming complacent and said the country needs to work hard for political stability. Not to do so, she said, would be a "terrible waste".

Prime Minister Abhisit Vejjajiva has announced a reconciliation plan in Thailand but the country remains deeply divided.

The two main protest movements contrast as starkly in their choice of clothing colour -- Red for one group, Yellow for the other -- as they do in their political leanings.

Reds, many still loyal to Thaksin, are seen as representing the poor and working class, while Yellows, backed by the Bangkok-based elite, used their rallies to help unseat the former prime minister.

Tarisa said dialogue, a more socially minded attitude and moves to address inequality -- a key Red Shirt demand -- were crucial for the country's progress.

The 60-year-old is proud of policies -- many implemented from lessons learned in the Asian financial crisis of the late 1990s -- that have enabled Thailand to ride out the global recession with respectable resilience.

Unlike their counterparts in the West, she said Thai banks were already highly focused on managing risk before the global financial devastation triggered by the 2008 collapse of US investment bank Lehman Brothers.

Even the more vulnerable export sector, which slumped around 30 percent in the immediate aftermath, has weathered the storm helped by increased demand from China, India and other emerging markets.

On Wednesday the Bank of Thailand increased its main lending rate by 25 basis points to 1.75 percent, following a quarter-point hike in July -- the first in almost two years -- to contain growing inflationary pressures.

The economy is now predicted to expand between 5.5 and 6.5 percent this year.

The Japan and US-educated central banker, who also spent several years as an economist for the International Monetary Fund, believes her gender has not been particularly relevant in her career, but she has faced some prejudice.

"When I first became the governor there was some mocking in a newspaper about having a female governor, especially when policies were not to their liking," she said.

In her elegant offices overlooking Bangkok's Chao Phraya river, the married mother-of-one said she was too busy to give much thought to what she will do when her 35-year career at the Bank comes to an end on September 30.

Her predecessor at the bank, Pridiyathorn Devakula, had a brief political sojourn as finance minister for the interim government after the coup.

But Tarisa insists she has no plans for her next challenge -- finance is out of the question during a two-year "cooling off" period -- although she does not expect to "go into 100 percent retirement".

She expects her successor, former Kasikorn Bank president Prasarn Trairatvorakul, to take a "fresh look" at the central bank.

And as she looks to her own future, Tarisa outlined a beguiling and simple recipe for contentment and success.

"You should be thinking about people who are less fortunate in society. If you are too self-centred you won't be able to contribute," she said.

-- (c) Copyright AFP 2010-08-29

[sirchai]

The economy is now predicted to expand between 5.5 and 6.5 percent this year.

And people are walking over the sea......virgins will be pregnant and one fish will feed thousands.......:jap:

[geriatrickid]

It is a shame that people that are competent in their positions are over looked by the general public and media. She did her job well considering the stifling constraints she faced. The fact that Thailand did not suffer an immediate meltdown, is due in part to people like her. She has strong political views but unlike many other political appointees maintained an apolitical position. Perhaps the military and General Prem may be inspired by her dedication and sense of duty to serve the nation.

[asiawatcher]

I think by and large she has done a reasonable job and ignored a lot of political interference. But I do wish she had not held the Thai Baht artificially high as it hurts the country and the economy immensely. Affecting exports with false fiscal responsibility such as rice where we have seen the retail price skyrocket from 96 Baht for 5Kgs to 220 and yet the farmers get not 1 Baht more. KInda tells the truth about Bank Of Thailand and its policies. There still seems to be a protectionism for business but with total disregard to the low income or subsistence farmers. That is a major stumbling block for BoT.