Singapore-Thailand spat: A desperate need for level-headedness

  Bangkok Post
February 28, 2007

By Achara Ashayagachat

UNLESS the military top brass and the interim government come up with well-coordinated actions on the Singapore issue, confusion will reign over Thailand's relations with the island state and foreign confidence in general will remain dampened for months to come.

Diplomacy and quiet negotiation would be the proper way to reclaim Shin Satellite from Temasek Holdings of Singapore, instead of whipping up nationalist fervour which would only hurt relations between neighbours

Gen Sonthi Boonyaratkalin recently sparked Thai nationalist sentiment against the Lion City by suggesting that national security tools such as satellites should not fall into the hands of foreigners. Thai national security information could be tapped by the Singaporean government, he said.

His remarks prompted the Minister of Information and Communications Technology, Sitthichai Pookaiyaudom, to scramble for means to buy the "national asset" back.

But in less than a week, Prime Minister Surayud Chulanont distanced himself from the issue, saying the matter was a business venture and it was not for the government to trade in shares.

Singapore's state-linked investment firm Temasek Holdings gained control of Shin Satellite, Thailand's only satellite operator, when it bought a 49.6% stake in Thai telecom giant Shin Corporation from the family of then prime minister Thaksin Shinawatra early last year.

Alan Chong of the National University of Singapore's Department of Political Science, said uncertainty over the issue would frighten not only Singaporean business people but scare away foreign investors in general.

If Bangkok lets patriotism propel the authorities' decisions and if nationalisation is the path chosen to regain the satellite, the situation would not auger well for any country involved.

"This would damage the reputation of not only the [Singaporean] company but the Singapore city state. It might tempt other countries such as Vietnam, which are welcoming Temasek investment, to follow suit," Mr Chong said.

Figures from the Board of Investment already reflect the bitter mood of Singaporean investors since the fallout from the Temasek-Shin deal in January 2006. The first month of this year saw an 88% drop in investment from the city state to Thailand.

Thammasat University's political scientist Surachai Sirikrai believes the Shin-Temasek issue could be resolved in two ways: if there is solid evidence that Kularb Kaew acted as a nominee for Temasek, it would mean the Singaporean firm was involved in an illegal business practice. To maintain good neighbourliness and diplomatic relations, the two sides would have to negotiate in a more private manner about the buy-back option. Under this scenario, Thailand should not have to pay in full. Singapore should shoulder the majority of the loss since it was Mr Thaksin and Temasek that clinched the deal, the political scientist said.

However, if the investigation led nowhere and the Shin-Temasek deal was shown to be clean, but the Thai government still wanted to take Shin satellite back anyway, "then in that case, we would have to pay in full", Mr Surachai said, adding the government could then retrieve the cost from Mr Thaksin.

Kasit Piromya, former ambassador to the US, said it was unwise for the military top brass to pronounce such an initiative in public, instead of doing it discreetly by consulting with the ministries of ICT, foreign affairs and the Office of the Attorney-General to explore options that were legal and reconciliatory.

In short, diplomacy should be allowed to play its role. "We have a long history of diplomacy, so we should not let emotions overshadow sophisticated solutions. In fact, it will be more appropriate if the civilian government contacts both the Singaporean government and Temasek Holdings to discuss our security concerns and find an amicable solution with the Singaporean counterparts," said Mr Kasit.

Unlike the United States, which has a legal framework to prevent foreign state-linked companies from taking over certain security-related businesses in its country, Thailand has yet to come up with a proper means to safeguard security-related interests, Mr Kasit said.

He suggested that the National Legislative Assembly (NLA) revise, revoke or propose a new bill to deal with all dubious contracts, not only those with Singapore but also with Chinese firms which have gained an advantageous footing in Thailand due to the close ties which Mr Thaksin and his deputy prime minister Somkid Jatusripitak had with Beijing. Mr Kasit also suggested it was time for developing countries including Thailand to raise the concern of security versus commercial interests, at a global trading body such as the World Trade Organisation (WTO) or a regional body like the Asean Regional Forum.

"The rise of the financial powers like China and Singapore and the need for developing countries to protect their security concerns should be dealt with at an international level," the retired diplomat said.

Assistant professor Pavida Pananond of Thammasat Business School, questioned who would represent Thailand in buying back the satellite should it go up for sale.

Suchit Bunbongkarn, an NLA member, argued that soft-toned diplomacy would not work if Thailand is to deal with Singapore on this issue. Instead, tough and straight-forward talks should be preferred since the city state was a survivalist.

He interpreted Gen Sonthi's remarks on the satellite as not only aimed at instigating a sense of nationalism but to remind Thai people that this incident stemmed from the seller, Mr Thaksin Shinawatra. "As many issues are going on, including the drafting of the new constitution, the public's attention has been diverted from the corruption Mr Thaksin is alleged of being involved in. Gen Sonthi did not intend to blast the buyer but to criticise the seller of the national asset," reasoned the retired professor.

Singapore's Foreign Minister George Yeo recently sent a business-as-usual signal by saying that there would be no problem if Temasek wanted to sell off Shin Sat. "This is for Temasek to consider and for the buyers to consider whether the price is right," he said.

Mr Yeo is scheduled to meet his Thai counterpart Nitya Pibulsonggram in Cambodia later this week. It remains to be seen whether both ministers really care about improving bilateral ties. Both Mr Yeo and Mr Nitya will attend the Asean retreat meeting in Siem Riep during March 1-2. It will be the first encounter since Thailand cancelled the Singapore-Thailand Civil Service Exchange Programme (CSEP) meeting at the end of January, in retaliation to Singapore's high-profile reception of the ousted prime minister.

Foreign Ministry spokesman Kitti Wasinond said that the Thai minister might not talk about the "business thing" as the prime minister has already said it was not the duty of the government to deal with business matters. "What Thailand has been waiting for is a concrete or tangible gesture that shows Singapore understands the concerns of the Thai government regarding former prime minister Thaksin," Mr Kitti said.

Former ambassador to the United Nations, Asda Jayanama, however commented that he did not expect Thai-Singapore relations to improve immediately or to worsen either, since Singapore still needs Thailand as its regional partner.

"If we understand the mentality of the Singaporean, we will not make more fuss. The city state will have to be restrained and not provoke more Thai nationalistic sentiment since they have a high stake in the Thai economy and security. After all, only Brunei and Thailand are their friends in Asean now," said Mr Asda, also a former ambassador to the city state.

But Mr Asda conceded that the issue of Temasek and its "nominee" should be handled carefully and resolved quickly, otherwise it would remain a thorn in our bilateral relations.

"Singapore has to face the reality. It will be a target of criticism during the [upcoming] election and even after that since there will be many people who are still attacking Thaksin for the things he has done to the country," Mr Asda said.

But can the problem be solved quickly? The signs are not good, as the acting police chief, Seripisut Temiyavej, is still squabbling with the Department of Special Investigation over the issue that his team and not the DSI should take charge of the Kularb Kaew probe.

The ICT minister's 18-member committee was also speeding up its enquiry into the Kularb Kaew case and would forward its results to the DSI.

So, what needs to be done first and by whom? This is the question the Surayud team has been struggling with and, from the look of things, which will continue to define this government for a while.