THAILAND: THE NEW PREM GOVERNMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88-00434R000400980011-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 22, 2016
• Document Release Date: May 17, 2011
• Sequence Number: 11
• Publication Date: September 4, 1986
• Content Type: MEMO

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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
4 September 1986
Thailand: The New Prem Government
Summary
We believe Prime Minister Prem's new coalition will last no more
than two years because of unity problems, squabbles over economic
policy, and pressure from the military. It may be that Prem intends the
present government to hold together only until the royal birthday
celebrations in late 1987, at which he is to preside. In any case, we
expect Army Commander Chavalit to consolidate his political position over
the next 18 months as he maneuvers to succeed Prem.
The new Cabinet appointees reflect Prem's preference for
technocrats and retired military men over politicians, and include several
holdovers from the previous government. The new coalition's biggest
challenges will be to maintain internal discipline and to avoid a spending
spree that would increase Thailand's foreign debt burden. Conservative
technocrats can probably forestall pressures for any budget-busting
increases in spending, but we believe the prospects for Cabinet unity are
poor. A major reason for our pessimism is Prem's decision to return to
Chief, Asia Branch, Asia/Near East Division, LDA
This memorandum was prepared by Office of East Asian Analysis and
Office of Lea ers ip Analysis. Information available as of 4 September
1986 was used in its preparation. Comments and queries are welcome and may be
directed to the Chief, ITM Branch, Southeast Asia Division, OEA, or the
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The biggest surprise in the new Cabinet is that the Democrat Party (DP), which
won nearly 40 seats more than the next largest coalition party, picked up only four
portfolios, the most noteworthy being Agriculture and Cooperatives. Prem's supporters,
and the Social Action Party (SAP) and the Thai Nation Party (TNP), have more grounds
for satisfaction than the DP: each received three portfolios, including the important
Foreign Affairs (SAP), Commerce (SAP), Industry (TNP), Defense (a Prem supporter), and
Finance (a Prem supporter).
Introduction to the New Cabinet *
The new Cabinet contains
s 43
is
generally similar in outlook to
officer, Adm. Sonthi Bunyachai, as his principal deputy.
ministry.
the potentially destabilizing "split" ministry system he used in 1980-83,
under which ministers from different parties are appointed to the same
ministers and deputies, plus the Prime Minister.** It
its predecessor--conservative, pro-Western, and
dominated by nonpartisan appointees and retired military men, who hold the most
significant posts. The recent Cabinet statement presented to Parliament indicated few
new ideas concerning foreign and domestic policy. As in 1983, Prem has tapped a
In our judgment, the Cabinet represents a mix of skill, experience, and political
expediency. Although US diplomats praised the overall caliber of the Cabinet, some
appointments--such as the TNP ministers of Communications. and justice--are clearly
designed to reward undistinguished party loyalists. Cabinet holdovers include SAP chief
Foreign Minister Siddhi, fellow SAP member Surat, who remained Minister of Commerce,
and several ministers attached to Prem's Office. The Minister of Agriculture and
Cooperatives, a hard-driving and capable Democrat, is the outstanding newcomer.
Retired Gen. Han Linanon's appointment to the Agriculture portfolio is probably a
consolation prize, for both the popular Han and his party reportedly had hoped he would
The inconclusive election results last month have translated into an unwieldy
Cabinet riven by competing interests, a factor that may turn out to be its greatest
weakness. Prem has reverted to a system used in his first three Cabinets, that of
splitting some portfolios among two or more political parties, a practice that was an
endless source of problems for Prem in 1980-83. As matters stand, only six of the 13
ministries are exclusively in the hands of either one party or Prem supporters, including
the important Foreign Affairs (SAP) and Defense portfolios (Prem supporter). Commerce,
for example, is divided among the SAP, TNP, and DP, with SAP appointee Surat holding
the ministerial portfolio (see appendix B for a listing of each ministry and its ministerial
.
The original Cabinet numbered 45 members, but a deputy minister resigned on 1
`See appendix A for an analysis of the election results and the new parliament
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rising star Suphachai, one of the two deputies. Industry and Communications, however,
could once more become conduits for corrupt deals with private. businessmen. F
Among the Cabinet's other key economic portfolios Finance is in capable hands,
with two experienced economists in charge--technocrat Minister Suthi and Democrat
during the wrangling for ministerial appointments TNP leader
and Deputy Prime Minister Chatchai received a loan worth more than $2 million from a
Sino-Thai businessman in return for promising that the TNP would join the new
government and obtain the Industry portfolio. Similarly, we view the appointment of an
important TNP leader, Banhan Silpa-acha, to the lucrative and powerful Communications
post, as an effort to reward a longtime supporter and net additional revenues for the
On the positive side, the Cabinet appointments increase Prem's influence over
administration and security. For example, Prem moved one of his closest advisers,
National Security chief Prasong, to the Prime Minister's Office as secretary general,
where he will supervise policy implementation and foreign and national security affairs.
Prem gave up his Defense portfolio to his deputy Phaniang, a rather weak former officer
who will probably reflect Prem's policies faithfully. Finally, the Prime Minister appointed
former Deputy Prime Minister Prachuap to be Minister of Interior. Prachuap, like the new
Minister of Defense, has a mediocre record, according to US diplomats, and we believe
the appointment reflects Prem's desire to place a Ioyal supporter in charge of the
important police and administrative network.
Challenges Ahead
We believe Prem's biggest challenge will be to maintain unity within the new
coalition. During his first term in 1980-83, Prem grouped the SAP, DP, and TNP in
coalitions that were notorious for their public back-stabbing and inefficiency. Prem has
become more politically adept since then, but we judge that he will have trouble with
his new government for several reasons:
? The decision to "split" ministries. The practice of appointing ministers from
different parties to the same' ministry will probably intensify interparty rivalries
and hamper efficiency, in our opinion.
? Continued weak party discipline. Given his inability to hold SAP together last
spring, we suspect that Foreign Minister Siddhi will have further trouble managing
his party in the legislature. Although some of the chief troublemakers have left
the TNP, we remain doubtful that the party has resolved its persistent
factionalism. In addition, press reports indicate unhappiness among Democrats
with party chief Phichai's leadership, particularly among the party's influential
southern wing.
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? Increased corruption. US diplomats report that the recent election was the most
expensive in Thai history, and that many politicians are heavily in debt. - Some
observers worry that the need for ready cash will lead to increased corruption
In addition, although Prem has disposed of former Army Commander Arthit, we
expect that military efforts to pressure his government are far from over. Arthit's
replacement, General Chavalit, harbors his own ambitions despite his public support for
Prem, according to US diplomats. Over the next year, we expect him to improve his
position at Prem's expense, ultimately to succeed him. Furthermore, the mutual
suspicion between the military and the Democrat Party has flared up again: military and
opposition accusations that the Deputy Minister of Interior--a Democrat--defamed the
monarchy forced his resignation only three weeks after taking office.
The new government also faces an immediate challenge in the economic sphere.
Although exports were up almost 20 percent in dollar terms through the first 6 months
of 1986, economic growth is showing little improvement over last year's record low of 4
percent as business confidence and private investment remain weak. US diplomats
point to continuing difficulties in the agricultural and real estate sectors, along with poor
management and several fraud cases that have hit the financial sector, as some of the
Although the coalition parties are pressing to spur the economy through
increased spending, Finance Minister Suthi and other technocrats argue that continued
fiscal restraint is crucial. We agree--the budget deficit this year is likely to balloon to
more than $2 billion, or more than 5 percent of GDP, because of a revenue shortfall
brought on by the sluggish economy compounding the problems of an inefficient tax
collection system. This would put Thailand out of compliance with its IMF guidelines,
and jeopardize access to IMF funds. If Bangkok has to finance this deficit with heavy
borrowing on foreign money markets, the country's good international credit rating
We doubt that Prem's present coalition will last as long as the previous
government, which held for roughly 36 months. In our judgment, Cabinet disunity, and
military muscle-flexing, and quarrels over economic policy are likely to take their toll.
some coalition members expect a Cabinet
reshuffle within the next several months, and we would not be surprised if Prern
reshuffled his Cabinet several times within the next 12 to 18 months.
The, first test of Cabinet unity may come within weeks, when a controversial
legislative package will come before Parliament. Aimed at tightening regulations on
banks and increasing certain indirect taxes, the defeat of this legislation led to the
collapse of the previous coalition last spring. We are not sure that the package will
pass this time around, and US Embassy sources say that the government may decide to
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allow coalition members to vote freely--in effect, to back away from its own legislation.
By allowing a free vote, a legislative defeat would not translate into a de, facto
On the spending front, we expect a somewhat stronger performance. As long as
they retain Prem's support, we believe Suthi and his team at the Finance Ministry will be
able to block any budget-busting spending increases. Without some improvement in the
economy, however, the new, government undoubtedly will face increasing pressure
Finally, although we do not expect an immediate challenge, we believe Prem's
military and royal support may be eroding after six years in office. According to US
diplomats, there is a lack of enthusiasm for his leadership, and King Bhumipol's 60th
birthday celebration in December 1987 is being widely touted as the finale of Prem's
political career. We find this view plausible,
Over the past year, we have seen Army Commander Chavalit consolidating
his support among the military, the palace, and the parties, and by next year both he
and Assistant Army Commander Pichtr will be senior enough to present credible
alternatives to Prem's leadership. If Prem steps down or if forced out the next two
years, we believe Chavalit will be first in line to succeed him. 1 7
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APPENDIX A
REPRESENTATION IN THAI PARLIAMENT
NUMBER OF SEATS'
1888
TOTAL 347
1HE VOTING. THE 27 JULY ELECTIONS RECORDED A
RESPECTABLE TURNOUT OF 61 PERCENT NATIONWIDE,
ALTHOUGH ONLY 37 PERCENT OF BANGKOKIANS WENT TO THE
POLLS. AS USUAL, VOTE-BUYING WAS WIDESPREAD. THE
DEMOCRAT PARTY, WHICH TOOK 56 SEATS IN 1983, MADE
THE LARGEST GAINS--DOUBLING ITS REPRESENTATIVES
IN BANGKOK, CARRYING MORE THAN THREE-FOURTHS OF THE
SEATS IN THE SOUTH, AND PLACING SECOND TO THE THAI
NATION PARTY IN THE NORTHEAST, A TNP STRONGHOLD. DESPITE
THE LOSS OF 10 SEATS, THE TNP CAME IN SECOND,
WHILE THE SOCIAL ACTION AND THAI CITIZENS PARTIES
PERFORMED BETTER THAN EXPECTED, ACCORDING TO
US DIPLOMATS. THE UNITED DEMOCRATIC PARTY---ASSOCIATED
WITH ARTHIT--FADED BADLY DURING THE CAMPAIGN.
LHE__ NEW__ PARLIAMENT CONTAINS AN ADDITIONAL 23
SEATS TO COMPENSATE FOR POPULATION GROWTH SINCE
THE 1983 ELECTIONS. ACCORDING TO PRESS REPORTS,
BUSINESSMEN FORM THE SINGLE-LARGEST OCCUPATIONAL
GROUP IN THE NEW LEGISLATURE. ACCORDING TO THE
US EMBASSY, A NUMBER OF OLD-STYLE GODFATHER
POLITICIANS LOST THEIR SEATS---INCLUDING ONE NORTHEASTERNER
BELIEVED TO BE A MAJOR MARIJUANA TRAFFICKER--TO
WELL-EDUCATED YOUNGER CANDIDATES.
? = COALITION GOVERNMENT
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Appendix B
Composition of Prem V Cabinet by Individual and Party
Ministry Position Name Affiliation
Agriculture and Cooperatives
Minister Gen.Han Linanon DP
Dep.Min. Prayut Siriphanit SAP
Dep.Min. Sano Thianthong TNP
Dep.Min. Suthep Thuaksuban DP
Commerce
Communications
Defense
Finance
Foreign Affairs
Industry
Minister Police Captain
Surat Osathanukhro SAP
Dep.Min. Chuchip Hansawat TNP
Dep.Min. Prachuap Chaiyasan DP
Minister Banhan Sinlapa-Acha TNP
Dep.Min. LtCol. Sanan Khachonprasat DP
Dep.Min. Suraphan Chinnawat TNP
Minister Air Chief Marshal
Phaniang Kantarat PREM
Minister Marut Bunnak DP
Dep.Min. Gen. Mana Rattanakoset PEP
Dep.Min. Samphan Thongsamak DP
Minister Suthi Singsane PREM
Dep.Min. Praphat Phosuthon TNP
Dep.Min. Suphachai Phanitchaphak DP
Minister Air Chief Marshal
Siddhi Sawetsila SAP
Dep.Min. 2ndLt. Praphat Limpaphan SAP
Minister Pramuan Saphawasu TNP
Dep.Min. Kon Thappharangsi TNP
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Minister
Gen.Prachuap Suntharangkun
PREM
Dep.Min.
Chaliao Watcharaphuk
PEP
Dep.Min.
Montri Phongphanit
SAP
Dep.Min.
Sukhum Lawansiri
TNP
Dep. Min.
Wira Musikaphong*
DP
Sa-at Piyawan
TNP
Prime Minister's Office
DPM
MGen. Chatchai Chunhawan
TNP
DPM
Phichai Rattakun
DP
DPM
Phong Sarasin
SAP
DPM
Adm. Sonthi Bunyachai
PREM
DPM
Gen. Thianchai Sirisamphan
PEP
Minister
Chirayu Itsarangkun
PREM
Minister
Michai Ruchuphan
PREM
Minister
Flight Off.Suli Mahasanthana PREM
Minister
Wichit Saengthong
PREM
Minister
Chaisiri Ruangkanchanaset
SAP
Minister
Amnuai Suwannakhiri
DP
Minister
Thoetphong Chaiyanan
DP
Dep,.Min.
Watcharin Ketawandi
DP
Science, Technology & Energy
-Minister
Banyat Banthatthan
DP
Dep.Min.
Phichai Rattakun
DP
State University Bureau
Minister
Subin Pinkhayan
SAP
*Resigned 1 September.
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Appendix C
New Faces in the Cabinet-
Han Linanon, Minister of Agriculture and Cooperatives
Retired general, former southern Army commander, and architect of "peaceful
south" project that broke decade-old Communist insurgency...no experience in
agricultural issues... energetic deputy leader of Democrat Party...well-known for
willingness to buck the system... vocally opposed to military's dominant political
role... disquieting to some Army leaders, Palace, and bureaucrat ...well-dis osed toward
United States, little use for Soviet Union or China...62 years old.
Prasong Sunsiri, Secretary General, Prime Minister's Office
Strongly nationalistic and extremely sensitive on questions involving Thai
sovereignty... recently resigned as Secretary of National Security Council to take new
position... held primary responsibility for coordinating refugee and relief affairs... articulate
and strong-minded in defending restrictive refugee policies...close relationship with
Foreign Minister Siddhi...intelligent and thoughtful... exudes professorial
demeanor... master's degree in international relations from the University of Colorado
Pramuan Saphawasu, Minister of Industry
First elected to Parliament in 1974 from central region...member of TNP... appointed
to Prime Minister's Office as adviser from Social Justice Party in mid-1970s...began
career in Royal Forestry Department, later resigned to run his own sawmill... since
involved in mining and construction business... onetime de ut president of Construction
Contractors Association of Thailand ...58 years-old.
Kon Thappharangsi, Deputy Minister of Industry
Nephew of TNP leader Chatchai...destined for top leadership positions in
TNP... outspoken and knowledgeable on economic affairs... onetime managing director of
family business, Erawan International Company... commercial and economic analyst at
Canadian Embassy, Bangkok (1968-74)...served as secretary to Chatchai when he was
highly Americanized ..graduate of Clark University in Worcester, Massachusetts ...4~
nIri years
Suphachai Phanitchaphak, Deputy Minister of Finance
Talented and respected economist...40 years old and one of Democrat Party's
rising stars...resigned from Bank of Thailand, where he supervised financial institutions,
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to run for office... favors financial and tax reform, stronger role for private sector, more
foreign investment... disagrees with critics of US Farm Act...received Ph.D from
Netherlands School of Economics, Rotterdam, and worked under Nobel Prize winner Prof.
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