Biased pro-Thaksin economist at Morgan Stanley?

[Tettyan]

I've heard about this guy a lot since Thaksin took power and have always been suspicious of his motives. I guess his true colors have finally revealed. Morgan Stanley is not so much an investment bank than a gang of overpaid hacks.

http://www.nationmultimedia.com/2005/10/07/business/index.php?news=business_18809586.html

STREET WISE: Abhisit’s fame taken in vain
Published on October 07, 2005

Democrat Party leader Abhisit Vejjajiva is undeniably handsome. The first time he emerged on the political scene as a candidate for the party, he immediately charmed voters with his good looks as well as strong academic background – both strikingly different traits from most politicians.

And now he must be impressed that his charm has extended over the borders of the Kingdom to Singapore.

In a letter addressed to Prime Minister Thaksin Shinawatra, Daniel Lian, a Morgan Stanley economist based in Singapore, showed that he too acknowledges the physical beauty of Abhisit.

In the letter recently published by Thai Day newspaper, Lian referred to a wonderful dinner Thaksin hosted in August. The letter contained four points, starting with the message: “You look very tired (I am very concerned) but fiercely confident and determined to fight on and take on the challenges (I am very glad to see that. I am with you).”

In Items 2-3, he talked about Morgan Stanley’s help in organising a road show in Hong Kong August 8-9. He also showed that he was impressed with Pannee Sathavarodom of the public debt management office.

Then out of the blue, in Item 4 he mentioned Abhisit:

“The ‘pretty face’ opposition Khun Abhisit Vejjajiva, leader of the Democrat Party, has been touring the world promoting himself and the opposition and attacking your policy and regime. Attached please see his speech announcement organised by a government think tank in Singapore (Appendix B). I wonder, other than his pretty young face, what else can he offer to the Thai people?”

Lian ended the letter with: “Take good care and keep up the fighting spirit. The 64 million Thai people need you.”

Obviously, his letter has not amused the good people at the Democrat Party.

A source at the party said that the Democrats recently informed Morgan Stanley’s chief about the letter. In their minds, the chief might not have known what Lian has been doing, “which could affect Morgan Stanley’s corporate image”.

The source added that the letter contains something “which could be deemed libellous”, aside from the strangeness of the letter which “could not be deemed appropriate for any organisation”.

In his opinion, Lian should be disciplined and he said that the party is anxiously waiting for Morgan Stanley to punish Lian.

He is so agitated by the letter that he does not care how impressed Lian is by Abhisit’s “pretty face”.

---

Get this too - this SOB continues to insist on talking up "Thaksinomics" in spite of all that has happend. Is this research out of a respected US investment bank or Thai government propoganda?

http://www.thailandoutlook.com/NR/rdonlyres/766D988B-2844-4BDA-B411-B0AF476B87D6/0/THAI062305_CrediblePlanBrightensInvestmentBoomPros pects.pdf

[nathawat]

Chavalit government brought country almost to bankruptcy (not to mentioned many people committed suicide as their business collapsed. Chuan's government did nothing more than political circus. I did not recall any accomplishment he had done to our country.

I'm not sure what's wrong with Taksin's. Released thai as "freeman" from IMF, tried to clean up all kind of outlaws and druglords, bring thai product to world market and, most important, strengthen ecomomy.

For me, I don't care how much richer he would be for being PM, as long as the country show sign of improvement more than any former governments had done.

[Tettyan]

You make an interesting argument. Truth be told, many of the foundations of the current economic recovery were laid during the reforms of the Chuan administration. Thaksin has just got lucky because his arrival in office conincided with an export boom - yes, most economists (including myself) agree that Thailand's boom has largely been a result of EXTERNAL factors. I'd argue the economy grows IN SPITE of Thaksin and all of his corruption factors. Fundamentally, the long-term competitiveness of the Thai economy has not improved on his watch - still no education reform, outdated infrastructure, and the megaprojects are constantly held up by bureaucratic infighting (more intense even than under Chuan, if that's hard to believe). The question about Thaksin and his economic policies should not be about how the economy is doing now, but how it does 5-10 years from now. Thailand is slowing losing its competitive edge to countries like China and Vietnam, and this government has squandered a golden opportunity to use its good fortune for future benefit.

You consider Thaksin's "war on drugs and mafia" to be an accomplishment? The last time I checked, drugs and mafia still plauge the country like never before. Yeah, Thaksin is all for putting an end to the abuses of "jao pho" and "nak leng", that is, unless they support his party ... I'm thinking of a certain family in Chon Buri, for instance. In the long-term, the government's use of extra-judicial killings will hurt the country in the long-run, undermining the rule-of-law, making Thailand a less friendly place to do business.

Take some time to digest these thoughts. I know it's a bit of a mouthful.

P.S. - I would appreciate it if the next time you reply to a post if you addressed the SUBSTANCE of the post, rather than resorting to "bait-and-switch." Attacking the government's political oppenents and trumpeting the "Thaksin is great" mantra does nothing to enhance the quality of discussion in this forum.

[paxman]

Just stumbled apon this forum, finally there's somewhere to discuss serious issues.

I had been thinking for a while how obviously pro Thaksin Lian is. He seems to take every opportunity to praise the PM, so much so that i'm almost convinced he is being paid off somehow. It has certainly made me lose a lot of respect for Morgan Stanley.

I'm eagerly awaiting his next update on Thailand, the bears and sceptics report sounded almost like government propaganda.

[Fatwol]

Out of interest, how many economists do we have here?

It never ceases to amaze me:

(i) how many bad/biased economists there are out there (like doctors who will claim smoking doesn't cause cancer - for a fee!)

(ii) how 'the man on the street' always feels he has the right to tell economists that they are wrong because he sees things differently. You don't get many lay-people telling cardiologists, "I know my heart better than you do, doctor", or "You should play Mozart like this, Mr concert pianist". But if you are an economist, they feel they have the right to dismiss your view just because it makes them uncomfortable.

I guess maybe (i) explains (ii), sadly, to answer my own question.

[Fatwol]

I think you have a very narrow view of economists - it's a very broad church; Marx vs Adam Smith; Keynes vs Friedman; Galbraith & Krugman vs. most flag wavers...

[Fatwol]

Yeah. Trying to reduce poverty and disease is a real head-doer. Much easier to just kick back and play X-box and diss all philanthropists as "the man"...

[Fatwol]

Enjoy your meal tonight and glass of beer, and remember those who have neither and for whom 5 minutes of "me" time is also a luxury.

[Fatwol]

...although I agree on the lack of materialism. Like to think maybe you can reduce grinding poverty without engendering mindless love of the other. Maybe I'm wrong. :(

[Tettyan]

Hey!

No need to bag on all economists. Remember Hernando deSoto, and many others who are geniunely committed to helping the poor.

My intention here was not to start an all-around economist-bashing session. Indeed, I think any competant economists would see that Thaksin's economic model has more holes than Swiss cheese. And I don't consider anyone in the current administration an "economist." Mr. Somkid likes to pretend he's one, but his Ph.D. is actually in MARKETING! That is, his expertise isn't in formulating policy, but trying to sell it. That's a big difference.

There are plenty of good economists (Thai and western) out there who understand the flaws in Thaksin's policies. Unfortunately, the most vocal economist out there is this certain Mr. Lian from Morgan Stanley - who talks like he's on Thaksin's payroll. I don't even know if he's a real economist, he claims to have a Ph.D. from the East-West Center (a think-tank in Hawaii), but as far as I know, they don't award degrees. The reason I started this thread was to draw attention to this HACK and FRAUDSTER who continues to propogate misinformation behind a respected name.

[Tettyan]

Yes, 90% of the public would proabably find what economists say as irrelevant to their lives. And that's not a good thing. Becaue the people don't understand economics. If the entire country understood economics, then the whole facade behind Thaksin's policies would crumble. Keeping people ignorant keeps authoritarians in power. Giving people the knowledge empowers them. It precisely because of my training in economics that I find Thaksin's policies so worrisome.

Believe it or not, Thaksin's appeal to ordinary people also lies in his supposed image as an international statesman and intellectual (with his PhD from Sam Houston 'bumblefuck' State University). Statements from clowns like Lian only further cultivate this image. I don't think Lian is representative of all professional economists out there.

[Fatwol]

You make a good case, Khun Tettyan; btw, is economics a private passion for you or a professional calling? (many study it but then don't get to use it day to day).

[Scuba22]

Investment banks are not charities. They hire economists to help them make money. This can happen if a smart economist improves the reputation of the bank or gives good insights to the bankers; or if a hack economist spends his time buttering up clients. Morgan Stanley has examples of both. Stephen Roach, their head global economist, is brilliant. Daniel Lian is a total hack. But they both make money.

I've heard from banker friends (this is total rumor, so please anyone correct me if you know the facts) that Morgan Stanley was the lead advisor in the recent Thai Military Bank merger and walked away with around US$14 million for that deal. Not bad for a bit of ass-licking, eh?

Thailand really isn't big enough or important enough to get much attention from well-regarded international economists, except when something extraordinary happens like the 1997 crisis. Krugman's 1994 article on the "Myth of Asia's Miracle" in Foreign Affairs referred to regional growth, including but not limited to Thailand, as a product of increasing factor inputs rather than productivity gains. That was a crucial insight, but nobody in Thailand seems to have done much about it other than inviting various pundits like Michael Porter over to reiterate the importance of productivity & competitiveness.

There are a few well-regarded local economists. Amar Siamwalla pops to mind right away, but there was also Tharin (I think) and another BOT governor who had a good reputation. But on the whole, no one in power really pays much attention to what they have to say.

As for Somkid - damn straight, he's a marketer, not an economist. His major claim to fame is co-authoring a book with Kotler, a marketing guru. His answer to everything seems to be - more marketing! If your only tool is a hammer, all your problems look like nails. It's amazing that he's regarded as some kind of smart guy.

Thaksin's "international intellectual" credentials are also pretty funny. I can't deride his university, I'm sure there are plenty of hard-working bright students at Sam Houston University. But Thaksin wasn't one of them. In her book on Thaksin, Chula's Pasuk makes a pretty convincing argument (without actually making the accusation directly) that Thaksin didn't write his own PhD thesis. She's got plenty of other evidence debunking the myths he creates for himself (e.g. growig up as a poor roadside roti seller).

What amazes me is that all this information is out there - you can just head down to Asia Books and pick up Pasuk's book. But nobody seems to care.

Why is it that the Democrats are so bad at spreading simple facts, while the TRT as so good at deception?

[paxman]

As u say, it's all about marketing and/or deception and they are damn good at that. Anytime there's a problem make up something, buying liverpool for example.

Anytime theres a problem looming send watanna out to grab some headlines. Everytime he opens his mouth it's to grab headlines at crusial times. It has worked everytime apart from this week. The teachers are still striking on Saturday and Egat isn't being privatised yet. It was also well timed to cover up the problem that has come of the temple fiasco some months ago in Bangkok where no permission was sought to preside over the ceremony.

[Fatwol]

...and look at the lead being set in the US. If you can't get things straight there, why look to Thailand for it to be done?

[Tettyan]

What amazes me is that all this information is out there - you can just head down to Asia Books and pick up Pasuk's book. But nobody seems to care.

Why is it that the Democrats are so bad at spreading simple facts, while the TRT as so good at deception?

For one thing, Thais don't read. It is said that the average Thai reads for only 3 minutes a day. 80% of Thais get their news from the terrestrial TV networks, which are all under the firm thumb of the government. I have a friend who works for one - he says that anytime you say anything that sounds anti-government, you get a tap on your shoulder after the show!

Of the Thais who do actually read newspapers, most read either Daily News or Thai Rath. Though they may have (somewhat) independent editorial pages, their news coverage is slavishly slanted in favor of the government. So then you can only wonder why the Democrats have such trouble getting their message out. Of course, their own mistakes and blunders are partly to blame too, but the lack of media freedom sure doesn't help.

In Germany, it's said that a government needs the support of Bild (the leading tabloid newspaper), Bild on Sunday. and TV in order to survive. For Thailand, I would say the same about Thai Rath, Daily News and TV. For now, Thaksin doesn't have that much to worry about quite yet.

----------------
Dear Fatwol,

I'm not a professional economist, though I did study it in college and graduate school. My background in economics does help me a lot with my current work, nevertheless.

You say that many don't get to use economics day-to-day? If you look around you, people constantly are dealing with economics without knowing it. What fascinated me so much when I took my first econ course in high school was that it seemed less an academic subject and more simply a logical articulation of common sense. I think those who take the time to study and apply it to their everyday thinking will agree. Sure, its methadologies are not a perfect reflection of reality, but tell me which map or globe perfectly replicates the shape of Earth? To me, economics is more than just about the economy, its a way of thinking about the world that is grounded in the belief that people respond to incentives, a belief that few can disagree with.

Cheers!

[Fatwol]

Couldn't agree more with you; my point was that there are few actual jobs with the "economist" moniker.

[Scuba22]

Dear Tettyan -

Thank you for your reply, you make some excellent points about media in Thailand. It never ceases to amaze me every time I get on the skytrain or subway how hardly anyone is reading a book or newspaper. The preponderance of fashion and society magazines on the newsstands is also incredible.

I apologize for getting off the economist/Lian topic, but media issues are very important. I've heard (and made) many moans about how Thai people don't read, how the broadcast media are controlled by small cliques and so on. It's all true, no doubt, but it doesn't really solve the problem to just complain about it.

We've seen and lamented the control of media assets by commercial interests and now the control of media regulation by those same interests who now control the government. But they didn't get control of government simply by controlling media assets - they also did a great job of using those assets to spread carefully crafted messages intended to get peoples' support. The message was very simple: "vote for me and I'll give you money". Sure, the source of that money and the strings attached were deliberately never clearly spelled out; and sure there was the usual vote-buying, but overall, their marketing job was superb.

However, we are supposedly living through a technological revolution in communications and media where control of hard assets should be decreasing in importance and regulation of new tech-enabled media is supposed to be very difficult. I wonder if those of us who consider ourselves smarter and better educated than the "common folk" (even if modesty forbids actually saying that out loud) can use our collective intelligence to figure out how to use new media to reach people in a more effective way.

As an American, I see very similar things happening in my own country so it's hard for me to complain to loudly about Thailand, especially when I think that whatever changes are made here need to be made by Thais, not outsiders. But I think the solution is the same here a in the US - patient dedicated outreach at the grass-roots level.

How many of us educated types ever venture into the slums or the villages rather than sit around and complain about how stupid everyone is? TRT was pretty much the first party that ever did any serious outreach of this kind, and look how great it worked. In the US, the fundamentalist Christian right is so dedicated to their beliefs that they congregate every Sunday for a few hours to discuss them. What does the left believe in strongly enough to devote that kind of time to? My guess is very little.

At the end of the day, the winners are those who know what they want and have the conviction, dedication, discipline and energy to go out and get it. Sadly, I don't see that from Democrats either here on in the US.

Scuba 22

[Fatwol]

You also make some excellent points.

On the use of technology, the US has embraced political blogs. Have you seen the Thai blogs? So many are hi-so girls talking about their new haircut or night out in Thonglor - pure 'Valley Girl' twaddle.

And sadly they are the ones with the access to all the technology!

[Tettyan]

We've seen and lamented the control of media assets by commercial interests and now the control of media regulation by those same interests who now control the government. But they didn't get control of government simply by controlling media assets - they also did a great job of using those assets to spread carefully crafted messages intended to get peoples' support. The message was very simple: "vote for me and I'll give you money". Sure, the source of that money and the strings attached were deliberately never clearly spelled out; and sure there was the usual vote-buying, but overall, their marketing job was superb.

I couldn't agree with you more. The Democrats were basically an elite party that believed they could win elections by default without explaining their policies to the common people. Who really cares about vague ideas such as "transparency" and "checks-and-balances" when you don't have running water and a paved road going to your house? Chuan's habit of brushing off reporters by saying "I haven't received any reports yet" certainly didn't help either. The feud between Banyat and Abhisit destroyed any remaining hopes that they may have had in the last election. With Banyat out of the picture now, though, the party seems to be patching things up.

The Democrats have simply not been Machiavellian enough. They weren't nearly as agressive as Thaksin in controlling state media while they were in power. This allowed a strong political opposition (Thaksin) to develop and eventually seize power. After using democracy to win power, Thaksin is now determined to stop others from employing the same methods he once used. Basically, the environment that opposition faces today is much more severe than it was five years ago. Nevertheless, the election of Apirak as governor shows that with attractive candidates (in more ways than one) and clear policies, the Democrats can do well. Lets hope they can offer a better challenge to Thaksin the next time 'round.


, we are supposedly living through a technological revolution in communications and media where control of hard assets should be decreasing in importance and regulation of new tech-enabled media is supposed to be very difficult. I wonder if those of us who consider ourselves smarter and better educated than the "common folk" (even if modesty forbids actually saying that out loud) can use our collective intelligence to figure out how to use new media to reach people in a more effective way.

Well, the Thai government is determined to censor the internet and chat boards on the same scale as the Chinese Communist Party. Sites like pantip.com are requiring registration of citizen ID etc before you can post your opinions! Civilized countries would regard that as an invasion of privacy. I'm afraid that the "technological revolution in communications and media" may actually give the government more leeway in regulating people's thoughts.

As an American, I see very similar things happening in my own country so it's hard for me to complain to loudly about Thailand, especially when I think that whatever changes are made here need to be made by Thais, not outsiders. But I think the solution is the same here a in the US - patient dedicated outreach at the grass-roots level.

The comparison of Thaksin with Bush is very tempting, but let's not get ahead of ourselves here. Both operate in completely different contexts. For instance, the Bush administration's recent attempt to control content on PBS and NPR has backfired, badly ( see http://cnn.netscape.cnn.com/news/story.jsp?id=2005111511010002230032&dt=20051115110100&w=RTR&coview= ). American democracy is centuries-old. Thailand's situation, on the other hand, is akin to America's in the 1790s. The country's current leaders have the power to affect the shape Thailand for generations to come. And I'm not sure I want to see the result of that.

VIVA LA REVOLUTION!

-Tettyan

[Tettyan]

We shouldn't forget that 'running water and a paved road' are transparency issues.

If you can explain that clearly and simply in one sentence using Isan dialect, you win the GRAND PRIZE!!! :D

[Scuba22]

Dear Tettayan -

Both the media questions and the EGAT issue are very interesting topics worthy of discussion. can you possibly open new threads on these topics? I'd hate to have them both buried in this Daniel Lian thread, and I am unfortunately too technologically illiterate to understand how to open a new thread.

However, if you or someone else can open a thread on these topics, I promise to participate (assuming that's a positive incentive!)

Thanks,

Scuba22

[Tettyan]

I guess the thread "The Almighty Leader" has been served as the general purpose Thaksin-bashing thread so far. In the interest of more focused discussion, and at Scuba22's request, I have created new threads for the topics of privatization and the media.

EGAT & Privatization: http://www.angkor.com/2bangkok/2bangkok/forum/showthread.php?t=1300

Media in Thailand: http://www.angkor.com/2bangkok/2bangkok/forum/showthread.php?t=1299

I gotta run now, but when I have a little more time, I will put up more posts on those new threads to try to further the discussion.

-Tettyan

[GWR]

My desktop search engine picked up a report from the following source on 8th February that Daniel Lian had left Morgan Stanley. Problem is that the content had expired. And a search of the site gave no further clues:-

http://business-times.asia1.com.sg/sub/news/story/0,4574,185332,00.html

[Scuba22]

Reuters (http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:re uters.com:20060207:MTFH01481_2006-02-07_18-53-14_L07698675&symbol=MS.N)

on 7 Feb says "U.S. investment bank Morgan Stanley said its Singapore-based Southeast Asia economist, Daniel Lian, had left the firm. A spokesman told Reuters the high-profile economist left last month, but declined to give a reason for his departure. Lian could not be reached for comment.

For more on this story, please double click on [nSIN48377]"

I couldn't figure out what that "double click on..." meant - the number was not linked to anything. if you can figure it out, please post!

Some more interesting comments about our Mr Lian: http://www.feer.com/tales/?postid=176


Cheers,

Scuba22

[BangkokPundit]

I don't even know if he's a real economist, he claims to have a Ph.D. from the East-West Center (a think-tank in Hawaii), but as far as I know, they don't award degrees. .

I would be interested to know where Lian actually claims to have a Ph.D. from the East-West Center. His employer Morgan Stanley said he had a Ph.D from the East-West Center, but one of his previous employers, Barclays Bank says (http://64.233.179.104/search?q=cache:fLUqO8nf5bkJ:www.barcap.com/cgi-bin/pressreleases/public/newsView.pl%3Fitem%3D1999052502+&hl=en&ct=clnk&cd=6&client=opera):

He holds a Ph.D and MA in Economics and Finance from the East-West Centre (USA) and University of Hawaii.

Don't you think it is quite possible, he received a scholarship (http://www.apsanet.org/content_17456.cfm) from the East-West Centre, did his research there, but received his degree from the University of Hawaii.

[Tettyan]

Don't you think it is quite possible, he received a scholarship (http://www.apsanet.org/content_17456.cfm) from the East-West Centre, did his research there, but received his degree from the University of Hawaii.

That's entirely possible, and my suspicion from the beginning. But then that means he received his Ph.D. from the University of Hawaii, not the East-West Ctr as claimed. Perhaps he thought just mentioning the East West Ctr would look more prestigious on his resume rather than just mentioning the University of Hawaii. Not that I have any problems with UH - I respect it as a fine institution, but I don't know how Mr Lian or Morgan Stanley feel about it.

[Tettyan]

I had been meaning to post this for a while, but havn't got around to it. For those who read the IHT, you'll be familiar with Bloomberg columnist William Pesek whose column appears every week. This was his New Years' column on superlatives for 2005. He devotes a big chunk of it to Mr. Lian.

http://www.bloomberg.com/apps/news?pid=10000039&sid=ap65J4btmdp0&refer=columnist_pesek


An Award-Winning 2005 for Asia's Economies: William Pesek Jr.
Dec. 30 (Bloomberg) -- In 2005, Asia reminded the world whose century this is.

A booming China, resurgent Japan and vibrant India helped shift the pendulum of global growth eastward. And investors who shook off bad memories from the 1997 Asian crisis to bet anew on Asia weren't disappointed.

As of Dec. 29, the Morgan Stanley Capital International Asia- Pacific Index gained almost 22 percent this year in U.S. dollar terms -- gains were far bigger in local currencies. For all the talk of a thriving U.S. economy, the Dow Jones Industrial Average seems poised to end the year unchanged.

There was plenty of bad news, too. North Korea's antics grew even more bizarre in the past 12 months. Differences of opinion over World War II kept Japan, China and South Korea from even getting together to discuss Asia's future. Concerns about a bird flu pandemic or terrorist attacks clouded markets from Seoul to Sydney and from Tokyo to Islamabad.

As a memorable year draws to a close, some awards seem in order for the Asian countries, companies and people that, for better or worse, helped shape 2005. Drum roll, please.

Japan Returns; China's Revision

-- Back from the Dead Award: To Japan, which finally shook off 15 years of walking in place. While deflation hasn't been licked, there's ample evidence Asia's biggest economy is experiencing the solid recovery that eluded it for years.

The Nikkei 225 Stock Average's 42 percent rally is evidence enough Japan is back. Ditto for the grumbling one hears among private-equity firms looking for distressed Japanese assets. Cleaner bank balance sheets and corporate restructuring have left fewer bargains for those accustomed to buying Japan on the cheap.

-- Corrections Department Award: To China, which after a review found $285 billion of previously unknown output, and thus with the stroke of the pen in December expanded its economy by 17 percent. It's about to leapfrog the U.K., France and Italy to become the world's fourth-largest economy.

The addition to China's economic pie may lead to an increase in its credit rating as the ratio of bad loans to gross domestic product is recalculated. It was quite a revision, and one that made China's economic foundations seem a bit sturdier.

Cloned Dogs; Teflon Leaders

-- Science Fiction Award: To Hwang Woo Suk, the South Korean researcher whose claims of advances in cloning research were declared to be fabricated. The question isn't just whether Koreans entrusted their national pride to the wrong scientist: Did Hwang really create Snuppy, the first canine clone, or did he pick him up at the local pet shop?

-- Teflon'R'Us Award: To Gloria Arroyo, who prevailed in the face of coup rumors, allegations of vote rigging and corruption, and massive street protests to win reelection as president of the Philippines. She makes former U.S. President Clinton's Teflon coating look thin.

-- Good From Tragedy Award: To Indonesia, for withdrawing the last of its special forces from Aceh and to Aceh separatist rebels for surrendering their weapons. Both steps marked important progress in ending a conflict that began in 1976 amid resentment over Aceh's share of oil and gas revenue.

What made the difference was the December 2004 tsunami that left more than 165,000 people dead or missing in Aceh. The aftermath helped reinvigorate peace talks. It's perhaps the best thing that came out of a disaster that killed about 220,000.

Mizuho's Loss; Thaksin's Guy

-- Spooking U.S. Congress Award: To CNOOC Ltd., the No. 3 Chinese oil company, which tried to buy Unocal Corp. The deal fell apart after American lawmakers argued that letting the No. 8 U.S. oil company fall into Chinese hands was a threat to national security.

History may remember Aug. 2, 2005 -- when CNOOC dropped its bid for Unocal -- as the day the U.S. woke up and realized the only way to stop China was to cheat.

-- Bad Trade of the Year Award: To Mizuho Securities Co., the brokerage arm of Japan's second-largest bank, which lost 40.5 billion yen ($347 million) thanks to a typographical error. Well, there go the bonuses!

-- Cozy Analysis Award: To Daniel Lian, Singapore-based Morgan Stanley economist for unabashed support of Thailand's prime minister, Thaksin Shinawatra, and then some.

Morgan Stanley wasn't impressed by an Aug. 15 letter Lian wrote to Thaksin that was leaked to the media. In it, Lian lauded the prime minister's ``fighting spirit'' and dismissed the leader of the opposition party as a ``pretty face.''

The firm called his letter ``unauthorized'' and expressed ``regret'' about the episode. Analysts argued there must be a clear line between an analyst's own preferences and the benefit to investors. A valid point, considering Morgan Stanley was competing with Citigroup Inc., JPMorgan Chase & Co. and three Thai investment banks to arrange the initial public offering of EGAT Pcl, Thailand's biggest power producer.
Hyped Pandemic; Korea's Boom

-- For the Birds Award: To bird flu, the pandemic that wasn't. While it may still become one, the hype surrounding avian influenza took on shades of the SARS hysteria of 2003 and the so- called ``Y2K bug'' in 1999.

-- Underdog Award: To South Korea, where stocks have jumped an impressive 57 percent this year. A year ago, Korea was but a tiny blip on investors' radar screens; now it's the rage. While some may wonder if Asia's No. 3 economy is experiencing bubble troubles, Korea's rally is a phenomenon that may well continue into 2006.

To contact the writer of this column:
William Pesek Jr. in Tokyo at wpesek@bloomberg.net

[Tettyan]

Now to be fair to Mr. Lian, maybe we owe it to discuss the merit of his theories and policy suggestions, without regard to his alleged coziness with Thaksin.

Let's start with an article Lian wrote early in Thaksin's first term. I have my own problems with his theories, but I'd like to hear other perspectives on his thinking.

http://www.pathfinder.com/asiaweek/magazine/Dateline/0,8782,170532,00.html


AUGUST 17, 2001

Thaksin's Model
The Thai prime minister's economic paradigm offers a new role for Thailand in the global economyBy DANIEL LIAN

ALSO
Stability, But at a Price: The people cheered, business cheered. But Thaksin Shinawatra's acquittal on charges of hiding assets is not without costs
Size Matters: The opposition has withered, leaving little check on the government

Prior to the 1997-98 Asian crisis, Thailand, like Malaysia, was viewed by the global investment community as one of the more promising blue-chip emerging markets. Its attractions were underpinned by rapid export-oriented industrialization and an aggressive expansion of its domestic capital markets. The country, however, has been languishing since the crisis. It is increasingly being labeled — together with Latin America — as offering poor growth prospects, hampered by a bad debt and bad asset overhang that is threatening its fiscal sustainability and stifling credit creation.

Thailand's problem is that it has followed too closely the East Asia Economic Model strategy that focused on attracting foreign direct investment from multinational corporations interested in mass production of manufactured goods. Thailand was placed, alongside other developing countries, in the generic "labor rich, capital poor" camp and prescribed the standard export model. While it is true that Thailand is labor rich and capital poor, this simplistic grouping has ignored certain strengths of its economy.

Prime Minister Thaksin Shinawatra has advocated an alternative development model as an antithesis to the East Asia Economic Model. In a nutshell, he wants to get away from supplying cheap labor to multinational corporations to mass-produce I.T. or industrial products at the lower end of global supply chains. Instead, the Thaksin model seeks to grow small and medium-sized enterprises that utilize locally embedded skills to create new products and services catering to the tastes of affluent middle- and upper-class global consumers. The overriding objective is to secure pricing power and raise living standards.

Thailand's comparative advantage does not lie in its abundant cheap labor, but rather a population and workforce endowed with an aesthetic culture and tradition. Indigenous enterprises have a long history of creating unique products such as in food processing, alloy toys, textile and ceramic products. By encouraging skill-driven enterprises which organize workers who excel in their local skills, Thaksin's paradigm will bring new products and services to the international market on improving terms of trade and pricing power, based on flexible production capacity.

Global trade and capital flows will continue to dictate global economic dynamics, and a workable development model cannot reject free trade and global capital. And contrary to the perception that it is inward looking, based either on the concept of domestic subsistence self-sufficiency or on the import substitution model, Thaksin's approach is an export-based, outward looking paradigm.

That does not mean there will be radical change overnight. The old model will run parallel with the new strategy as long as they both contribute to the Thai economy. But the type of foreign investment that will be actively courted are corporations looking to forge synergies with local enterprises. International fashion houses, health food companies, art galleries and exotic-tour operators are more likely to be investors and partners under the new paradigm than Toyota, IBM, Thomson or Samsung.

Thaksin's other macroeconomic policy of rejuvenating the rural sector is at the core of this new model. His program to develop alternative financial institutions, such as credit cooperatives that can tap rural savings and provide financing to local enterprises, is an attempt to develop small and medium-sized enterprises. It should not be viewed as an effort to side-track the big domestic commercial banks or foreign financial institutions.

If successful, Thailand will be able to shift away from being a supplier of cheap labor to multinational corporations for mass production of I.T. or industrial products at the lower end of global supply chains. That will mean Thailand would no longer have to compete with China and other emerging markets at the bottom of the economic food chain. Instead the country will capitalize on selling unique, branded products and services to affluent global consumers. The old East Asia Economic Model has outlived its usefulness for Thailand. Thaksin's new economic paradigm could be an effective alternative.

DANIEL LIAN is Southeast Asia economist for Morgan Stanley in Singapore

[Scuba22]

When I first ran into Lian's "analyses" I was so blown away that I wrote a 6-page point-by-point rebuttal just for the hell of it. It really is incredible that a guy with such a poor grasp of both logic and economics could have gotten a job with Morgan Stanley. But OK, let's get into the action.

"Thailand's problem is that it...focused on attracting foreign direct investment from multinational corporations interested in mass production of manufactured goods."

Now THAT's an incredible statement. An educational system that doesn't teach people how to think is not a problem. A business culture that consistently stifles innovation and creativity is not a problem. An obsession with wealth and appearance that pays no attention to how either was obtained is not a problem. A system of laws that are adhered to only when convenient and a judiciary with dubious credibility are not problems. And we won't even mention the unsustainable currency peg that was the proximate cause of the 1997 crisis.

No - the problem was foreign direct investment and mass manufacturing. Never mind that FDI and mass manufacturing built Singapore, Hong Kong, Taiwan, and even Japan and Germany in the postwar period (not to mention the United States during the industrial revolution). For Thailand, these are the central problems.

It's amazing that anyone can take this seriously. It's as if a morbidly obese guy with blood gushing out of a bullet hole in his head comes panting into the emergency room clutching his chest and smoking cigarettes and the doctor on duty says, "Your shoes are no good." Unbelievable.

When your diagnosis is SO off kilter like that, it almost doesn't even matter what else you say beyond that. Do we really need to get into a discussion of what kind of shoes are most comfortable, most in fashion, or where to get the best deal on shoes? It's all beside the point.

OK, gotta run to dinner now - more rambling diatribe on the stupidity that is Dan Lian in the next post!

Cheers,

Scuba22