Thailand had been in turmoil for years when Abhisit Vejjajiva was sworn in as prime minister in December 2008. A bloodless military coup had removed the controversial populist leader Thaksin Shinawatra from the job in 2006, and Abhisit's two immediate predecessors were thrown out in rapid succession by the country's Constitutional Court. NEWSWEEK's Lally Weymouth spoke with Abhisit at the World Economic Forum in Davos. Excerpts:
Weymouth: Thaksin has been gone for two years. Why are people still supporting him?
Abhisit: He was in power for six years. He controlled most of the media. And he was fortunate enough to oversee quite a good period of economic expansion. But what we have done over the past year is to prove that we respond equally—if not more—to the needs of the people. [Only] we do it while upholding the spirit of democracy, which is not to abuse power or to intimidate the opposition. Some of his supporters have legitimate grievances against the coup that took place.
Do you have plans to hold a real election?
My term has two more years to go. The economy is on firmer ground now. But we also need to make sure we have rules that people can agree upon. What is the good of having elections if my opponents are going to engage in election fraud again? They use intimidation tactics, they use threats of violence, and that is not democratic to me.
U.S. experts are concerned that Thailand could end up in a civil war once the king leaves the scene.
Not if we continue on this track. The way we would descend into civil war is if we [were to] cave in to illegitimate demands because of threats of violence. That only invites further violence from all sides.
The rest of Asia has come out of the economic downturn faster than your country. Why is that?
I think we have one of the lowest unemployment rates now. Last year we saw the final figure of minus-2.8 percent negative growth, but this year we have had 4.5 percent growth. In December we had a record number of tourists—1.6 million. This year we think exports will increase by 14 percent. The next part is how we exit from the stimulus packages. They need to be sustained through this year, but we would certainly hope to see private investment picking up.
Do you believe the United States will play a diminished role in Asia as a result of the financial crisis?
Economically, there has to be rebalancing, which means that our growth has to be less dependent on the ability of U.S. consumers to buy Asian goods. So there has to be a shift toward Asia, toward the emerging economies.
Does that mean you look to your internal market or to other markets?
To the Asian markets. Having said that, we welcome the Obama administration's determination to reengage with Southeast Asia in a big way.
What do you think of Obama?
We are very much encouraged by his desire to engage Asia, his respect for multilateralism, and his style of inclusiveness.
How do you view China: as a threat or an ally?
She has provided us with a huge market, a source of growth for a number of years, and more can be done. There is still huge potential.
China's stimulus package seems to have been very targeted and effective.
You are right. Perhaps too well targeted, as it was focused domestically.
They are trying to build up their own market?
I think it is good for the global economy if they can unleash the consumption and purchasing power [of their people]. Otherwise, there [will be] no rebalancing.
That means you have to build up a middle class in China, as you have in Thailand.
It takes time. The next challenge for them, obviously, is when that happens, there is a need to respond in terms of more liberalization, not just economically.
Over the next 10 years, do you see China moving to replace the U.S. dollar with an Asian or Chinese [reserve] currency?
The Chinese are now trying to encourage [conducting] some re-gional trade in their currency. But you need convertibility for it to be a full international currency. To have an Asian currency, you need to coordinate monetary policy, and we are still quite some way from that. I think trade will begin to shift to alternative currencies more, although it is not immediately clear that it would fall to one particular currency.
What do you think of the growing U.S. deficit?
It is big. You need to find balance, and then you will have better and sustained growth.