BANGKOK (Reuters) - At 1.93 meters (6 ft 3 in) in height, Thailand’s finance minister often stands above the crowd. That’s even more the case after winning “Global Finance Minister of the Year” honors from The Financial Times’ Banker magazine.
But as British-born, Oxford-educated Korn Chatikavanij accepts the award at a Bangkok ballroom on Monday, he knows he has a tough job ahead in reforming Thailand’s convalescing economy and helping it expand at a time of political tension and rising anti-government protests.
Thailand has one of Asia’s slowest projected growth rates this year, although data just released for the end of 2009 was stronger than expected and Korn says that momentum carried over into this year.
Of immediate concern is whether a Supreme Court ruling due on Friday on ousted former premier Thaksin Shinawatra’s $2.3 billion in family assets will trigger a reprise of riots last April that might further alienate investors.
“Some key reforms are needed. Some of these do require a better political environment than we have today in order to ensure success,” said the 46-year-old former chairman of JPMorgan Chase & Co’s Thai unit.
But bridging the political divide isn’t easy. Anti-government protesters fume that they have been disenfranchised by the elite in Bangkok — and Korn is an easy target.
His grandfather was a privy councilor to King Prajadhipok, his uncle founded the Electricity Generating Authority of Thailand, a state monopoly, and his father was commissioner of the Revenue Department and director of the Fiscal Policy Office.
Korn himself made his mark quickly. In 1987, at 23, he founded J.F. Thanakom Securities to become the youngest chief of a major Thai investment bank after working three years for SG Warburg in London, which he joined from Oxford University.
He spent almost all of the following years in banking before joining the Democrat Party in 2004. He won a seat in parliament a year later and was appointed finance minister in 2008 in the cabinet of long-time friend and fellow Oxford alumnus Abhisit Vejjajiva, Thailand’s prime minister.
“We always felt one day I would come into his fold as it were — the realm of politics — but I took my time, almost 19 years,” he said in a recent interview with Reuters at parliament. “For me, this is the right thing for the right time.”
The Banker agrees, praising Korn for navigating Thailand’s trade-reliant economy through the financial crisis, with fiscal stimulus measures it put at more than $61.2 billion while boosting long-term government spending on infrastructure.
“(Korn) has introduced an active and extensive reform program that has succeeded in putting Thailand’s economic policy back on track after several years of economic paralysis and frequent government changes,” the magazine said.
The stimulus, however, hit some rough patches, which even Korn concedes. The health minister and his deputy resigned after allegations of corruption linked to how the money was spent in their ministry. Disbursement has been slower than expected.
The government has also faced criticism over a court-ordered suspension of 64 projects worth up to $12 billion at the world’s eighth-biggest petrochemicals hub in eastern Thailand, which raised questions over the stability of investment in Thailand.
A local environmental group had lobbied to clean up Map Ta Phut since 1996, claiming pollution from the plants had caused at least 2,000 cancer-related deaths. The group has threatened to target another 181 projects if they, too, fail to comply.
Korn comes down firmly on the side of the environmentalists, saying the case could mark a positive turning-point and help Thailand retool its economy to rely less on manufacturing.
“The Map Ta Phut court ruling could prove beneficial for Thailand in the very long term,” he said.
“What we would like to see is a much bigger share of the service sector compared to manufacturing. What’s notable over the past 10 years is that with the economic growth that Thailand has seen, the service sector share has actually shrunk a little bit. That’s unusual.”
“Some investors may not like it. But we have to protect our own environment and the future living conditions of our own citizens,” he added.
He also disagrees with manufacturers and shippers pressing Thailand to build a deep seaport on its western shore to allow exporters to ship directly to the Middle East, Europe and Africa.
Such a project would jeopardize one of Thailand’s biggest assets, he said — tourism in the southern Phuket region, home to some of the world’s most coveted beaches. He would like to see tourism expand, helping to build up the service sector.
“We shouldn’t sacrifice a very robust tourism sector in the south and put that at risk through the development of major industrial projects that would go along with that port,” he said.
Editing by Alan Raybould and Bill Tarrant