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Dear Friends and All,
Asia and Her X Origins in Politics-Business Nexus: Days of Future Past and Implications for Value Investors
“Politics and business are inseparable. We have to accept this reality. Politics is like the sun, and business like the earth. If the earth goes close, it will be too hot, and if it moves far away, it will be too cold. But they are inseparable.”
– Thaksin Shinawatra in an interview on 22 March 1992
It is said that to understand Thailand’s business and politics, all you need is to master the understanding of Page 4 of the newspaper Thairath, which is Thailand’s most widely circulated newspaper with at least 1 million copies sold daily, and the underlying philosophy of “Boon Khun”. The Thairath has a long history of publishing a daily column on high-society weddings, including a color picture of the wedding reception. The photo typically shows the couple, their parents, and the most distinguished guests in attendance, for example members of the royal family and top business and political leaders. “Boon Khun” is the gratitude from the traditional Thai belief that parents have done their children the biggest favor possible by giving them life and raising them to adulthood; therefore children should be grateful to their parents and must fulfil filial duties, respecting their wishes, including marriage decisions.
Such “network marriages” and family politics to breed wisely by combining the bride and groom’s family firms to form horizontal or vertical alliances has influenced the growth, direction and even survival of family businesses. For instance, Thaksin was once pursued by angry creditors and clients from his failed business ventures in 1979 as recounted in Thaksin: The Business of Politics in Thailand but his fortunes turned around with the help of his wife Pojaman, the daughter of a powerful general whom he married in July 1976, in winning a computer contract to the police department in 1986 and the first government telecommunication concession that played a pivotal role in establishing the foundation of the powerful Shinawatra kongsi (or family business). Thaksin’s career from the start was in the twin fields of politics and business. His success arose from his ability to synergize the two. He added his understanding that political regulation of business is the source of abnormal rates of profits. The Thai stock market from late 1980s, pumped up by financial liberalization and a worldwide enthusiasm for “emerging markets” translated the high profits into even higher net worth.
Could the lenses of family politics help investors see better the recent event in Thailand? From high-level sources in the Thai establishment dominated by the military, old money families and the bureaucracy obtained by WikiLeaks, the May 22 coup, Thailand’s 19th since the end of the absolute monarchy in 1932, was a result of.. |
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