Thai finance minister quits

Move seen as fresh blow to government efforts to restore investor confidence.

    Pridiyathorn imposed capital controls that led to the worst one-day fall in the Thai stock market [Reuters]
    He was fired by Thaksin Shinawatra, the prime minister who was ousted in a coup last September.
     
    After announcing his resignation, Pridiyathorn said: "I do not want to work in an atmosphere of hidden motives."
     
    The former central bank governor joined the interim government as "economic tsar" in October.
     
    He was not consulted on the appointment of Somkid Jatusripitak, the former finance minister and architect of Thaksin's pro-business policies, as an economic adviser earlier this month.
     
    Dipping confidence
     
    The appointment triggered a storm of protest by Thaksin's critics, prompting Somkid to quit his post after six days.
     
    Investor confidence in Thailand has been low following a series of bombings in the troubled southern region and in the capital, Bangkok.
     
    Tarisa Watanagase, the Bank of Thailand governor, announced late on Wednesday the last remaining restrictions on foreign inflows into mutual funds would be lifted on Thursday.
     
    "The relaxation provides an option for foreign investors in a way that does not compromise our original objective to prevent excessive fluctuation of our currency," Tarisa said.
     
    Pridiyathorn, 59, was seen as a steady hand when he was named finance minister and deputy to Surayud Chulanont, the prime minister, after the coup.
     
    But his reputation was soon tarnished by the botched imposition of the capital controls in December, which led to the sharpest one-day fall in the history of the Thai stock market.
     
    Botched measures
     
    A move to tighten foreign business ownership laws in January outraged foreign investors and triggered fears of rising economic nationalism in the South-East Asian nation.
     
    Some analysts said Pridiyathorn's departure was the latest blow to a government that has seen its popularity decline due to a series of policy flip-flops.
     
    "The resignation of a key minister is bound to throw into question the credibility of the existing government, as well as the desirability of Thailand as a destination for investment and business," Vishnu Varathan, an economist with Forecast Pte, said.
     
    Others said the move may bring some stability to a divided cabinet
    criticised for its lack of action.
     
    Frederic Neumann, a regional economist for HSBC in Hong Kong, said: "There has been infighting within the government and that has resulted in a bit of a power struggle behind the scenes.
     
    "By removing one of the protagonists, you might actually get more coherence in government policy."

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