Mom Rajawongse Pridiyathorn Devakula
(ปรีดิยาธร เทวกุล, born 15 July 1947
) served as Minister of Finance in Thailand's interim civilian government
. Before being named to the Cabinet of Prime Minister Surayud Chulanont
, Pridiyathorn had served as Governor of the Bank of Thailand
since 2001. Following the September 2006 coup d'état
, there was speculation that he would be appointed prime minister by the junta
Early life and education
Pridiyathorn was educated at Thammasat University
, and at the Wharton Business School
, University of Pennsylvania
, where he gained an MBA
. From 1971 to 1990 he worked for the Thai Farmers Bank
, becoming Senior Executive Vice President. In 1990 he became official spokesman for Prime Minister Chatichai Choonhavan
. In the governments of Anand Panyarachun
and Suchinda Kraprayoon
(1991-92) he was Deputy Minister of Commerce. He was appointed member of the Thai Senate
from 1992 to 1993. In 1993 he became president of the Export-Import Bank of Thailand
, and in May 2001 he was appointed Governor of the Bank of Thailand
, the nation's central bank. He is also a Director of the Civil Service Commission and of the Thammasat University
Pridiyathorn holds the titles Knight Grand Cross (First Class) of the Most Noble Order of the White Elephant and Knight Grand Cross (First Class) of the Most Noble Order of the Crown of Thailand.
The KTB non-performing loan scandal
In 2004, the state-owned Krung Thai Bank
(KTB) shocked Thailand's financial world by reclassifying approximately 40 billion baht as problem loans. Pridiyathorn threatened to fire KTB chief executive officer Viroj Nualkhair
if he did not resign. Viroj was a former financial advisor to media proprietor Sondhi Limthongkul
, having helped him make the initial public offering one of his first companies. As Krung Thai Bank head, Viroj had forgiven 1.6 billion baht of Sondhi's debts and arranged for further rounds of forgiveness. Using all his media outlets, Sondhi attacked Pridiyathorn and defended Viroj.
Viroj was eventually forced to leave Krung Thai Bank. Sondhi's public criticism of Thaksin started to increase, eventually leading to the establishment of the People's Alliance for Democracy. This was a factor behind the September 2006 coup.
September 2006 Thailand coup
Two days after the coup which deposed Prime Minister Thaksin Shinawatra
, the Bangkok newspaper The Nation
- "Business leaders have called for the Council for Democratic Reform under Constitutional Monarchy to pick Bank of Thailand (BOT) Governor MR Pridiyathorn Devakula to serve as interim prime minister. Pridiyathorn has emerged as the front runner for the premiership, even though he said on Wednesday he had not been approached by the council. Council leader General Sonthi Boonyaratglin said a civilian would be picked within two weeks to become interim prime minister.
- "Bangkok Bank chairman Chatri Sophonpanich said yesterday he supported Pridiyathorn becoming the new premier. He said the new prime minister would be well received by Thais and foreigners alike if he or she had a background in economics, and that Pridiyathorn fit the criteria.
Surayud Chulanont was eventually named prime minister, but he in turn named Pridiyathorn to his Cabinet as Minister of Finance, a move that business leaders saw as positive. He was succeeded as governor of the Bangkok of Thailand by Tarisa Watanagase, the first woman to head the BoT.
Deputy Prime Minister and Minister of Finance
Pridiyathorn's policies as Minister of Finance included,
- Fiscal deficits. A budget deficit of 147 billion Baht for fiscal year 2007. This was the first budget deficit since 2003. Fiscal deficits were also expected for 2008.
- Suvarnabhumi City. Pridiyathorn opposed the establishment of a new province, dubbed Suvarnabhumi City, around the newly constructed Suvarnabhumi Airport. The plan to establish a new province had been proposed by the deposed government of Thaksin Shinawatra. "There are a lot of retention ponds in the area and water experts said they serve as waterways, allowing floods to flow to the sea. If there are buildings, they will obstruct water from flowing out, and cause the inner city to flood. If the Department of Town and Country Planning proposes to build a community in the area, I'll oppose it," said Pridiyathorn.
- Capital controls. Pridiyathorn instituted capital controls to attempt to reverse a strengthening of the baht, but reversed the measure after the Thai stock market crashed, destroying US$20 billion of market value in one day. Pridiyathorn later noted that “This was not a mistake. Measures always have side effects. Once we knew the side effects, we quickly fixed it.... Just one day of stocks falling is not considered much damage.” He came under harsh criticism. Bratin Sanyal, head of Asian equity investments at ING in Hong Kong noted, "The one thing worse than an incompetent central bank is an incompetent central bank that flip-flops." Catherine Tan, head of Asia Emerging Markets at Forecast in Singapore, noted, "They are proving themselves to be very unprofessional. Their actions are very irresponsible. They have totally lost credibility... I don't see foreigners returning to Thailand any time in the near future. Markets now have no confidence in the government. The Export-Import Bank of Thailand also criticized the capital controls.
- Limiting foreign companies investing in List I and II businesses (including media, telecoms, and aviation) from holding more than 50% of shares. List III businesses (including retailers and hotels) were exempted from the new restrictions. Investors holding more than 50% would be forced to lower their stakes within a year. Investors holding more than 50% of voting rights would be forced to lower their voting stakes within a year. Finance Minister Pridiyathorn noted, "If they (foreign investors) had seen the details (of the foreign investment law), I am sure that they would be happy. He later backtracked, and said that telecommunications firms would be exempt from the new regulations. He claimed that he had misspoken when he earlier included the telecommunications business into the categories to be affected by the law amendments.
- Corruption investigations into Thaksin Shinawatra. Pridiyathorn sparked controversity in his dealings with Jaruvan Maintaka of the junta-appointed Assets Examination Committee. Jaruvan accused Thaksin's wife of inappropriately buying a plot of land from the Financial Institutions Development Fund (FIDF) while Pridiyathorn was FIDF Chairman. Pridiyathorn guaranteed that the purchase was legal and refused to file charges, claiming that the FIDF was not a damaged party. Jaruvan then claimed that Pridiyathorn violated the law by sitting on the boards of more than three state enterprises. Pridiyathorn countered by claiming that Jaruvan was trying to destroy his reputation.
- Monetary policy. Pridiyathorn took the unusual step of urging the Bank of Thailand to cut interest rates by half a percentage point, rather than 25 basis points as expected by most analysts. Bank of Thailand is independent of the Ministry of Finance, and did not heed Pridiyathorn's call. He resigned the next day.
Pridiyathorn resigned on 28 February 2007. He cited reasons for resignation included,
- Premier Surayud's decision to appoint Pridiyathorn's rival, former Thaksin-government Finance Minister Somkid Jatusripitak, as a self-sufficiency economy special envoy. Somkid resigned from his position after less than a week.
- Prime Minister's Office Minister Thirapat Serirangsan's alleged preference to certain private media interests. Several analysts speculated that he was referring to the preferential treatment the junta gave to leading anti-Thaksin critic Sondhi Limthongkul, who was also a long-time critic of Pridiyathorn.
His resignation shocked the political world as well as the business community. "The reasons he gave were quite strange," noted Pornsilp Patcharinpanakul, deputy secretary-general of Board of Trade. In turn, Pridiyathorn was replaced by Chalongphob Sussangkarn.
Junta leader General Saprang Kalayanamitr was also implicated in Pridiyathorn's resignation. The Bangkok Post reported that Pridiyathorn resigned in protest after a CNS member lobbied him to sell shares of IRPC (formerly known as Thai Petrochemical Industry) back to a former shareholder. Saprang's brother, Chienchuan, was a key financial advisor to Prachai Liaophairat, the estranged founder of TPI.
Despite working in the civil service for over 25 years, Pridiyathorn is tremendously wealthy. Disclosures to the National Counter Corruption Commission revealed that 30 days after leaving his Cabinet position in March 2007, Pridiyathorn had 730 million baht
in assets, a slight drop from 754 million baht when he took office in October 2006. His wife Praphaphan has a net worth of 283 million baht, while his daughter Pudjeep has 7 million baht.