Thaksin pledges war on debt laggards

Thaksin (R) with Chinese President Jiang Zemin

By CNN's Geoff Hiscock, Asia business editor

HONG KONG, China (CNN) -- Thailand's prime minister Thaksin Shinawatra has promised new legal remedies to speed up debt workouts among troubled Thai businesses.

Delivering the keynote address Wednesday night to the Fortune Global Forum in Hong Kong, Thaksin said the Thai government would issue a new law within two weeks to set up the Thailand Asset Management Corporation.

This would consolidate non-performing loans, and help address corporate restructuring through strengthening support for the Thai judiciary.

Thailand's performance on debt restructuring since the 1997 Asian financial crisis has provoked criticism. Investors say Thailand has moved too slowly and the process lacks transparency.

The legal manoeuvres of high-profile debtors such as Thai Petrochemical Industries (TPI) in particular has deterred potential investors, analysts say.

Unequivocal commitment to free enteprise

Thaksin said he wanted to give foreign investors an "unequivocal commitment" to free enterprise and emphasised that the Thai government would be neutral between debtors and creditors.

He said Thai business leaders would also have to change their mindset towards the taking and management of risk.

"We have declared war on corruption, so transparency is very important," he told the forum.

Thaksin, a telecoms tycoon who became prime minister in February this year, said Thailand had failed to explain its policies clearly to foreign investors.

"We will rectify that in the coming days."

Challenge is to restore confidence

The Thai government's first task was to revive confidence and restore the economy. Other key challenges were to eradicate poverty -- particularly in rural areas -- and create a strong social platform that would encourage foreign investors.

Thaksin said that Asia's future prosperity would rely on its capacity to make the change from a region that relied on exports to outside markets to one that traded much more within itself.

"We must shift from trading outside the region to intra-Asian trade. And we must collaborate and cooperate on creating world-class products using world-class technology and our innate traditional skills," he said.

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