Singapore Prime Minister calls for ASEAN economic integration

dpa German Press Agency
Published: Thursday November 9, 2006

Singapore- Thai Prime Minister Surayud Chulanont made a whirlwind visit to Singapore on Thursday as part of his introductory tour of regional countries since his appointment on October 1 following a bloodless coup. Earlier he met with Sultan Hassanal Bokiah in Brunei's capital of Bandar Seri Begawan after leaving Bangkok in the morning.

Elaborating on the political situation in Thailand and the September 19 coup in both Brunei and Singapore was a priority for the military-appointed Surayud, said the Thai Foreign Ministry.

Ways to increase the number and skills of Thai workers in Singapore and boost cooperation in education, science and technology were also addressed. There are currently 53,000 Thais working in the city-state, primarily in the construction sector.

"Singapore and Thailand should work together to promote economic integration" within the Association of South-East Asian Nations (ASEAN), Prime Minister Lee Hsien Loong said at a dinner in Surayad's honour.

"The rapid emergence of China and India makes it vital for ASEAN to integrate quickly and realize its full potential," Lee noted.

"We must press ahead with our efforts to reinvigorate ASEAN, and make it a cohesive and vibrant community," he added.

Lee described the ties between Singapore and Thailand as "extensive and multi-faceted." Noting bilateral trade has grown steadily to reach 28 billion Singapore billion dollars (18 billion US) last year, he said.

"This reflects the confidence of our companies and investors in Thailand's economic dynamism and potential," Lee added.

Surayud called on President SR Nathan earlier. He also held separate meetings with Lee Minister Mentor Lee Kuan Yew, Singapore's founding father and first prime minister.

The dinner was the final event before Surayud was scheduled to return to Bangkok.

Surayud met the Singaporean and Brunei leaders during a visit to China last month to mark the 15th anniversary of ties between Beijing and ASEAN.

The visits on Thursday were in keeping with ASEAN diplomatic etiquette. Surayud visited Laos, Cambodia, Vietnam, Malaysia, Indonesia and the Philippines last month, assuring them it was business as usual in Thailand despite the recent coup.

Surayud was accompanied by Deputy Prime Minister and Minister of Finance MR Pridiyathorn Devakula, Minister of Foreign Affairs Mitya Pibulsonggram and Minister of Labour Apai Chandanachulaka.

The visit to Singapore came at a time of rising tensions over the January 23, 2006, purchase of Shin Corp - the business conglomerate of the family of former Thai premier Thaksin Shinawatra - by Temasek Holdings, Singapore's investment arm.

The 1.9-billion-dollar sale raised serious questions about Thaksin's legitimacy as a national leader and accusations of "policy corruption," if not outright cheating on taxes.

Not only did Thaksin push through legislation three days before the sale that hiked the foreign ownership ceiling in Thai telecommunication companies from 20 to 49 per cent, his family also finessed the deal through the stock market in order to benefit from a waiver on capital gains tax, making the billion-dollar sale a tax- free one for his already wealthy clan.

The sale also sparked claims that the prime minister had sold off sensitive national assets. The Shin Corp conglomerate included several government concessions including the country's largest mobile phone service, the national satellite network, a popular television station and shares in a no-frills airline.

It led to a rapid decline in Thaksin's popularity among Thailand's middle class and political elite that culminated in his overthrow by the military coup.

In the aftermath of Thaksin's fall, the Temasek-Shin Corp deal has remained a hot potato and the subject of numerous ongoing investigations in his family's dubious business dealings.

On Tuesday, the revenue department announced that Thaksin's son and daughter, Panthongtae and Pinthongsa, would be liable to pay taxes of an estimated 11 billion baht each on their purchase of Shin Corp shares from the offshore company Ample Rich days before reselling them to Temasek.

Another investigation is examining the legality of Temasek's appointment of two nominee companies to purchase an additional 47 per cent in Shin Corp after the initial 49 per cent purchase.

There are suspicions that the nominees, although Thai entities, are mere shell companies for Temasek Holdings.

If found guilty of abusing Thailand's nominee requirements, Temasek might be forced to sell 47 per cent of Shin Corp fast, and at a considerable loss, although Thai ministers have indicated that some leniency is in the cards.

Thailand is in the process of amending its legislation on nominee holdings.

"If they (Temasek) are found to be a bit incorrect they will have more time to correct it," Thai Finance Minister Pridiyathorn Devakula told a recent gathering of the Foreign Correspondents Club of Thailand (FCCT).

© 2006 dpa German Press Agency