SURAYUD APPOINTS A FORMER THAI RAK THAI DEPUTY

C O N F I D E N T I A L SECTION 01 OF 03 BANGKOK 000964

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/16/2017
TAGS: PGOV PREL ECON KDEM TH
SUBJECT: SURAYUD APPOINTS A FORMER THAI RAK THAI DEPUTY
LEADER; FINANCE MINISTER LOSES FACE

REF: A. 06 BANGKOK 6855 (SOMKID CONSIDERS OPTIONS)


B. 06 BANGKOK 6474 (TRT REPOSITIONING)

C. 06 BANGKOK 5706 (SUFFICIENCY ECONOMY)

Classified By: Ambassador Ralph L. Boyce, reason: 1.4 (b) and (d).

SUMMARY
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1. (C) Prime Minister Surayud on February 16 appointed
Thaksin-era Deputy Prime Minister Somkid Jatusripitak to head
an economic commission. This dramatic and unexpected move
appears to put Somkid -- who also was a Deputy Leader of
Thaksin's Thai Rak Thai (TRT) party -- solidly in the
government camp. The appointment justifies speculation that
Somkid, who has the support of many former TRT legislators,
will be a top-tier contender to become Thailand's next
elected Prime Minister. Despite personal animosity between
Thaksin and Somkid, Thaksin may see ways in which he can
benefit from this development. Double-hatted Deputy Prime
Minister and Finance Minister Pridiyathorn Devakula was not
consulted prior to this appointment and has lost face.
Somkid's appointment follows recent speculation that Suwat
Liptapanlop, another top TRT official, quit TRT to form a new
party sympathetic to the coup leaders. This development
likely indicates the Generals currently running Thailand have
an exit strategy which involves cultivating TRT politicians.
Somkid appears to benefit the most from his appointment. End
Summary.

SURPRISE APPOINTMENT
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2. (U) On February 15, Prime Minister Surayud discussed with
the press his order appointing former Deputy Prime Minister
Somkid Jatusripitak to chair a government commission to
explain the administration's economic policies -- based on
the King's "sufficiency economy" principles (ref C) -- to the
international community. In his new role, Somkid will report
directly to Surayud. Eight high-ranking government
officials, including three from the Prime Minister's office,
serve on the commission.


3. (SBU) (Background note: In the final months of the Thaksin
administration, TRT officials saw Somkid as the figure most
capable of holding TRT together in the event of Thaksin's
departure from politics. Many considered him best able to
replace Thaksin as Prime Minister. Thaksin appeared
concerned by Somkid's popularity and ambition, and publicly
adopted an increasingly hostile tone toward Somkid prior to
the coup. In turn, Somkid distanced himself from Thaksin,
not defending the former PM's sale of Shin Corp and keeping
well behind the firing lines in the debate about the wisdom
of negotiating a Free Trade Agreement with the United States.)


4. (C) The precise nature of Somkid's duties remain unclear,
but his job description is less significant that the
symbolism of his appointment. Somkid is the first civilian
politician with "star power" to align himself with the
current government. Somkid also brings a meaningful
political network; in January, Somsak Thepsuthin -- a former
leader of what had been TRT's largest faction of Northeastern
legislators -- announced the formation of a new political
grouping called "Matchima," which appeared destined to become
a political party. Somsak publicly stated he wanted Somkid
to become Matchima's leader, and politicians assure us
privately that Somkid is on board but will wait for the right
time to publicly show his cards.


5. (C) We understand that Somkid's former aide at the
Commerce Ministry, Dr. Virachai Viramethikun (now Deputy
Secretary General for Political Affairs in the PM's office),

SIPDIS
conveyed to Surayud Somkid's offer to use his "special
contacts, especially with leaders in China and Japan" to
counteract Thaksin's recent public campaign against the
current regime and its economic policies. The seeming
inconsistency of one of the architects of the previous
economic policy, which the new regime has derided as a source
of "populism" and immoderacy, now defending the new policies
is expected to be resolved by Somkid speaking about the
philosophy of the King's "sufficiency economics" without
actually defending recent policies this government has
implemented.


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"WHICH SOMKID?" -- PRIDIYATHORN LOSES FACE
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6. (C) Somkid's appointment entailed a significant loss of
face for Deputy Prime Minister/Finance Minister Pridiyathorn
Devakula, who has been closely associated with some of the
interim government's major economic blunders. Not only may
Somkid -- for years, a rival of Pridiyathorn -- outshine
Pridiyathorn as a spokesman on economic policy, but it became
evident that Pridiyathorn had no foreknowledge of Surayud's
decision to bring Somkid on board. On the day of his
appointment, a local press report noted that, when
journalists asked for his reaction, Pridiyathorn asked the
reporters, "Which Somkid? Who appointed him?" On his back
foot, Pridiyathorn defensively pointed out to the press that
he remains responsible for economic policy in this government.

THAKSIN'S INTERESTS
--------------


7. (C) Thaksin's relationship with Somkid deteriorated
significantly in 2006, when Somkid appeared overly eager to
supplant Thaksin as Thai Rak Thai party leader (and
potentially as Prime Minister). Somkid and Thaksin may hold
each other in contempt, but there nevertheless are good
reasons why Thaksin may welcome Somkid's appointment:

- The appointment of a former top TRT official seems to
undercut some of the claims that Thaksin's regime was so
corrupt as to warrant a coup d'etat. The government will
appear inconsistent and likely be criticized for this step.

- In signaling publicly that former TRT officials may be
welcome in the government, this appointment may dampen
whatever enthusiasm investigators had to pursue corruption
cases against former TRT politicians. Somkid himself is
reportedly tied to at least one of many cases under review by
the Asset Examination Committee, the body that has most
aggressively pushed for action against Thaksin's family.

- Somkid may help the Generals to feel confident that they
have a meaningful ally in political circles, someone who can
look after their interests once they leave power. This may
make it more likely that elections will be held in a timely
manner. A return to normalcy in Thai politics will benefit
Thaksin, who retains sufficient wealth and (in many areas)
popularity that he may hope to return to Thailand and stage a
comeback.

- If Somkid, now seemingly rehabilitated by the interim
government, takes a leading role in party politics, he would
rely on a network of politicians who are known to Thaksin and
desire his money; Thaksin would have a reasonable hope of
being able to engage in constructive negotiations with an
elected government in which Somkid and his associates play a
major role. Even if Somkid proves hostile, Thaksin would
still find Somkid easier to fight against in the future than
the Generals currently in charge.

OVERSHADOWING SUWAT
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8. (C) Somkid's maneuvering follows and has now overshadowed
the February 9 resignation from Thai Rak Thai of party Deputy
Leader Suwat Liptapanlop and more than two dozen of Suwat's
allies. Suwat announced that he and former Thai Rak Thai
faction leader Phinij Jarusombat had formed a "reconciliation
alliance" -- another political grouping, like Somsak's, which
looks like the basis for a party but cannot yet register as
one because of restrictions imposed by the coup leaders.
Suwat's move represents the latest step in TRT's continuing
disintegration (ref B).


9. (SBU) When Suwat announced his resignation from TRT, there
was widespread speculation that he was collaborating with the
Council for National Security (CNS) and intended to represent
the Generals' interests in the next election. Journalists
highlighted that CNS Chairman General Sonthi admitted he had
met with Suwat and Phinij to discuss political dynamics --
"Meeting anyone, even politicians, is what we must do to
create understanding and national security," Sonthi said.

COMMENT
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10. (C) We have long wondered how eager the Generals will be
to allow free elections while many in the countryside
continue to support TRT politicians. Somkid's appointment is
the clearest signal yet that the Generals hope to co-opt
significant portions of TRT, rather than relying on
"deprogramming" millions of peasants who, not without
justification, saw Thaksin and his party as having served
their interests. This strikes us as a reasonable if not
necessary approach, a credible exit strategy for Generals
proving less than fully adept at politics.


11. (C) Surayud may feel that he gains an articulate and
credible spokesman who can help to counter Thaksin's public
relations efforts. But Somkid gains the most. After being
out of the public eye since the coup, he can resurrect his
political career, at a time when the economy is slowing and
management of the economy is widely perceived as less sound
than when he was the economic czar. His new position helps
to insulate him from corruption charges. Meeting high
ranking foreign officials -- seemingly a major part of his
new duties -- will give him an aura of statesmanship. And he
can appear as a unifying figure for the nation, someone who
successfully transitioned from Thaksin's regime to the
Surayud era and, therefore, well qualified to lead the
country into the next period.
BOYCE