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Wednesday, December 02, 2009

Dubai financial debacle will make Thaksin more desperate

Dubai financial debacle will make Thaksin more desperate
The Nation
Published on December 1, 2009

MUCH has been said about the Dubai debt moratorium, whose ripple effect on other economies and financial institutions has yet to be determined. Thailand might have to bear some negative effects, as the country imports crude oil from Dubai. For goods and services, transactions will have to be adjusted to cope with the latest development.

But a well-known, notorious Thai citizen stands to be affected immensely, either through investment or personal predicament. Thaksin Shinawatra, according to news reports, has left Dubai for a trip to an unnamed European country. His purpose was also not disclosed.

The trouble in Dubai also means a lot of trouble for Thaksin, whose name and passport have been changed - from Thai to a strange-sounding name in his newly acquired Nicaraguan passport. For some years now, the fugitive has used Dubai as his base for investment and political campaigns to destabilise the Abhisit government, with marginal success.

Nobody knows, except for Thaksin, how much he has invested in real estate projects, financial and debt instruments. This is because he is unlikely to admit anything that will cast him in a bad light. But the amount will not be small, judging from the patronage the ruler of Dubai has provided for his refuge.

Going on his ego and eagerness to please the Dubai investment community and make his presence felt as a billionaire, his investments must be sizeable, if not all of what he holds as assets. It could be billions of baht, if not far more, due to his faith in the city state and its future - which resembled gold in the desert, in the eyes of investors.

His abrupt departure to Europe could mean that he must draw on financial resources, if not deposits, in countries that still serve as tax havens. His suddenly depleted resources make him look like an eagle with clipped wings, and one with less room to manoeuvre.

The reason for him calling off a planned rally in Bangkok last weekend must have been partly influenced by Dubai's problems, which could imperil his stay in the city state. If he continues to incite trouble by the red shirts, the Dubai authorities could be pressed by the Thai government to deal with the fugitive.

If Thaksin is forced to leave Dubai, it means that he cannot stay on to look after his investments and other assets, especially if those assets face the risk of being wiped out by the default of Dubai World. That means Thaksin's world will shrink again, especially with the warning from neighbouring Abu Dhabi that he cannot use the UAE capital as his base as he has done with Dubai.

With fewer resources at his disposal, Thaksin will feel more desperate, and that means his assets of Bt76 billion frozen by the Thai government becomes more valuable. It represents a larger stake than ever before.

That's why he will have to redouble his effort to reclaim that amount at whatever cost, including through political trouble by instigating the red shirts and other allies to force out the Abhisit government.

There have been disheartening rumours around town that he has offered up to half of the frozen assets to whoever is able to help him win the court case and reclaim the amount. Such rumours cannot be taken lightly judging by the huge greed of the people who are in a position to share the fortune with him.

That means we can expect more trouble, with revived street rallies this month. His desperate battle to get back the vast fortune from the state will embolden him to do whatever is necessary.

What Thaksin wants now is total freedom from all criminal prosecution, and amnesty from the jail term, so that he can travel to all countries as before. In terms of politics, he can let his cronies take control of the government via the election process. He will use big money and other tricks.

If the above transpires as Thaksin wants it to, it means more trouble ahead and an unpredictable conclusion. It will not be pleasant for us to witness. If street battles erupt, it depends on how the authorities decide to restore peace. This is an unsavoury prospect. Prime Minister Abhisit cannot foresee what will happen, but he must work to the best of his ability to manage the situation for the good of the country.

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