A confession? A ruse? A slip of the tongue?

Kittiratt vs Prasarn: Sport topics are great; interest rates too hot for dinner

Central bank governor Prasarn Trairatvorakul had a dinner appointment with Finance Minister Kittiratt na Ranong the other day and the whole of Thailand wanted to know how it went.

The minister had publicly said he wanted the governor replaced for not reducing policy interest rates. The governor has stuck to his gun, arguing that interest rates weren't the real reason behind the strengthening baht.

"The first half an hour of the dinner was fine because we were talking about sports. But when the topic was interest rates was raised, the atmosphere became somewhat tense because we still had different ideas on the issue. The minister still wanted the policy interest rate to be reduced by 1%," Prasarn told Matichon in an interview published today.

Obviously, the two left the dinner the same way they had met earlier in the evening: Both agreed to disagree.

Asked whether he had given up on the fight? Prasarn responded: "I would have to make a decision if we hit a situation where we can't find a way out and if my continued presence causes damage to the country. But the fact remains that our economy remains reasonably stable with a proper balance."

My take? Prasarn isn't giving in easily. He is here for the long haul.

PM's interference won't end Finance-BoT conflict

Bank of Thailand chairman Virabongsa Ramangkura has urged Premier Yingluck Shinawatra to intervene in the currency dispute between the central bank and finance ministry.


But is this an issue that can be resolved through political “mediation?”

In fact, I am not sure that Dr Virabongsa was serious in making that suggestion. In fact, it was more like an afterthought during a surprise press conference he called last Thursday. It was clear that his intention to hold the public session was to dramatise the “failure” of the central bank in curbing the rise of the baht value.

Virabongsa made no secret of his fear that that if nothing was done to solve the problem, the country could “sink to its demise or the economic could go into bankruptcy.”

But he devoted a great amount of time to discussing how difficult it was to dismiss Dr Prasarn Trairatvorakul from the post as central governor.

In fact, earlier reports said the premier, in a meeting of her kitchen cabinet earlier last week, had posed the question of how the central governor could be legally replaced. Her office has yet to issue a denial to that story.

Finance Minister Kittirat na Ranong has gone on public saying he was “thinking about replacing the central governor every day.”

There is little doubt that the government is very unhappy with Prasarn for not being “obedient” enough in a number of controversial policy issues, the latest being the repeated suggestion by Viragongsa and Kittirat to reduce interest rate to curb the strengthening of the baht.

Prasarn has argued, both publicly and in official documents to the government, that bringing down the interest rates wouldn’t solve the problem. But then under the law, decisions of interest rates doesn’t rest with the governor. The Monetary Policy Committee is in the official organ to review interest rates on a regular basis. The central bank governor is only a member of the committee although the finance minister appears to believe that the governor could influence most, if not all, of the MPC members.

Can the central governor be sacked? Under the law, he can be removed from office by the Cabinet on the recommendation of the finance minister – not for defying political wishes or orders – but for “serious wrong misconduct or dishonest performance.”

The BoT says the MPC is in charge of interest rates. The finance minister holds the BoT responsible for the strong baht. Virabongsa, as BoT’s board chairman, insists that he doesn’t really want to see Prasarn dismissed. Perhaps, he has read all the clauses in the law and come to the conclusion that sacking Prasarn for disagreeing with the government would make things worse.

Does he really think that the premier’s direct intervention would resolve the conflict between the central bank and the finance ministry?

This isn’t an issue between two politicians fighting over their respective interests over which the prime minister has total control. This is in fact a normal and in fact healthy divergence of views over whether interest rates are related to the strengthening of the currency – and what policy options are the most appropriate. It’s not about sharing the cake. It’s about academic analysis and pragmatic experience. It’s about mutual respect between politicians and technocrats.

It’s not about threats of dismissal or “you-scratch-my-back-I-scratch yours” compromises. It’s about mature, responsible people putting all the arguments for all sides on the table and, realizing there are no panaceas, deciding on the most practical monetary tools while closely monitoring to check on the outcomes.

Political intervention will only raise more questions and answers. Restoring mutual respect and professionalism between the finance ministry and central bank as well as the MPC is the only path to a real solution.

What's up, Madame PM?

A rare pose of Premier Yingluck Shinawatra. It's not clear what she was laughing about but photographers say the premier often shows her personal, soft side when the right question is posed to her. Avoid tough, political questions especially about her elder brother at all costs!

Thaksin goes for broke

Thaksin Shinawatra is going for broke. According to a Pheu Thai MP, the former premier said in a recent Skype session with the party members that if the move to amend the constitution failed, the party should turn the table -- by dissolving Parliament to call a new election so that Pheu Thai could return with an absolute majority to clear the way to amend the charter.

Ubon Ratchathani MP Somkid Chuakong quoted Thaksin as saying that the Constitutional Court had no reason to stop Parliament from voting to change clauses in the charter. That's why if the party's plan could not proceed, the alternative is to go back to the people to ask for a clear-cut mandate to return to Parliament and get the job done.

That, of course, will prove very controversial. Perhaps, it's only a threat to get his way without having to return to the polling booths. But one thing is clear: He is desperate to get the constitution changed the way he wants -- and he isn't sure that the plan will pull through.

A leader's soft side...

A good husband must hold his wife's bag. And that applies to even the Chinese leader, Xi Jinping, while walking down his plane in his recent trip to Africa. This picture was reportedly posted by a Chinese reporter onto a Chinese micro-blog but was soon taken off by censors. I don't see anything wrong with an Asian leader showing his "soft side" publicly. After all, China is said to be going all out to make use of its "soft power" to step up her influence around the world. And "soft power," like charity, begins at home.

Southerners ask: Where is Chalerm?

Chalerm Yoobamrung is deputy premier in charge of security affairs, including the Deep South. But he hasn't visited the area in any serious way since taking office. Instead, he has flown to Kuala Lumpur to hold talks with Malaysian authorities but hasn't really sat down with local officials and residents to show his personal concern for the deteriorating situation down there.

The day after the deputy governor and assistant governor of Yala were killed in a bomb attack earlier this week, reporters asked Premier Yingluck why Chalerm hadn't flown South to show the government's concern.

The premier was obviously caught off-guard. She said something about Chalerm's imminent visit there but also defended his reluctance to be personally meeting local people in the three southern provinces. "Sometimes, our puuyais (senior authorities) from Bangkok don't want to disturb the local officials by visiting since they would have to provide security measures and other conveniences which could distract their normal duties," she said.

That, of course, still doesn't explain why Chalerm hasn't been down there. First, he said he would be in the South after the Bangkok governor election.Then, his excuse was that he would wait until the House session on constitutonal changes was done. But he flew North instead, under the pretext that he was observing the smog situation up there -- an issue not related to his job description.

The deputy premier has always said he is no coward and would be ready to face any seriousl challenge anywhere, anytime.

It's time to show it where he is needed most.