Politics, Money, Thailand and Transparency

June 8th, 2010

Photograph by Nate Robert

On Friday, May 28th, the Washington Post published an article discussing efforts by the Thai government/army to identify and punish financial supporters of the ‘red shirt’ movement—the Thai political opposition whose protests recently paralyzed Bangkok for several weeks.  The Post article particularly highlights the exploits of one businessman, a steel and Nestlé instant coffee producer named Prayudh Mahagitsiri, who was recently placed on a financial blacklist of 151 wealthy Thais by the government’s Center for the Resolution of the Emergency Situation.   But Mr. Mahagitsiri is not the only wealthy individual the government has been targeting lately.  In February, Thailand’s Supreme Court seized $1.4 billion of former Prime Minister Thaksin Shinawatra’s assets (the court permitted him to keep $900 million).

Of course, neither the Post nor the government have addressed the lack of financial transparency in Thailand.  According to a 2008 report from Global Financial Integrity, which leads the Task Force, Thailand lost up to US$6.3 billion in illicit outflows between 2002-2006 due to the opacity provided by tax havens and secrecy jurisdictions around the world.  These jurisdictions obscure the beneficial owners of corporations, trusts, and charities, and refuse to share account information with other tax authorities, thereby enabling up to US$1 trillion to flow out of the developing world each year.

Without information on the beneficial owner of accounts in these secrecy jurisdictions, it’s impossible to determine the full assets of an individual or company.  Incomplete exchange of information on non-resident account holders for tax purposes further exacerbates the problem.

Of course, financial transparency should also be combined with good governance at home.  If Thailand’s leaders ran the country in a more transparent manner overall, then maybe there would no longer be any ‘red shirts’ to back.

Written by Christine Clough

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