Baan Dongsaensuk's residents and tens of thousands of other poor Thais who have borrowed from the Village Fund will, with perseverance and luck, also pay off their loans. Debts of gratitude fall due on Feb. 6, when Thais vote in a national parliamentary election. Polls show that members of the Thai Rak Thai (Thais Love Thais) party, which Thaksin founded, could corral 350 of the legislature's 500 seats, up from around 300. Under Thailand's parliamentary system, this overwhelming majority would virtually ensure that Thaksin, a self-made telecommunications billionaire who took office in 2001, will remain as Prime Minister and hold an even firmer grip on power.
Thaksin's economic policies, known as Thaksinomics, are key to his electoral appeal. Designed to support farming and cottage industries and to boost the incomes of the country's downtrodden, his programs have contributed to an impressive economic boom. Over the past four years, Thailand's GDP has surged by a total of 22.2%—the second fastest rate in East Asia after China. Rural incomes have grown by 20% annually over the past two years, according to Goldman Sachs. Thaksin's policies have turned him into something of a popular hero, hailed by his fans as the decisive, no-nonsense leader who has lifted Thailand from the doldrums of the Asian financial crisis, restored Thai pride, and lavished cash on the forgotten backcountry. Not even the Dec. 26 tsunami, which left more than 5,300 dead and caused an estimated $1 billion worth of damage in Thailand, is expected to knock the country far off stride. Morgan Stanley predicts its GDP will grow 5.7% in 2005. Thaksin "has made things happen," says Somboon Nonta, another Baan Dongsaensuk villager. "We can see it and we can touch it."
Yet perhaps no other leader in Asia today has proved more controversial than the 55-year-old former policeman. "He is dividing the country right down the middle," says Senator Jon Ungpakorn, a vocal critic of the Prime Minister. To his admirers, Thaksin is an economic visionary with the courage and strength to tackle intractable problems—from entrenched bureaucracy to rural poverty—and to restore order after decades of political upheaval. To his detractors, he is a near autocrat who runs roughshod over opponents and relentlessly extends his own power—for example, by naming his cousin as head of the armed forces and appointing his brother-in-law as deputy national police chief. Everything Thaksin does is colored by this impassioned debate. In 2003, a nationwide crackdown on the drug trade left more than 2,500 people dead and human-rights activists' howling about a lack of due process and the possibility that some who died had no involvement with the drug business. The administration blamed most of the deaths on drug dealers' killing one another out of fear that their associates would turn them in. "Murder is not an unusual fate for wicked people, and the public should not be alarmed by their deaths," said Thaksin. Jakrapob Penkair, a government spokesman, says the antidrug campaign is consistent with the law and will likely continue if Thaksin wins a second term: "People around the country express much satisfaction in the success of this policy." Last October, there was more bloodshed when Thai security forces responded to an escalating Islamic insurgency in the south of the country, leaving 85 Muslim protesters dead—most of them suffocated after spending hours stacked handcuffed in the back of military trucks. Thaksin expressed regret for the loss of life and acknowledged that the local authorities erred in how they transported the detainees. But he also stressed that security forces were facing a hostile situation organized by people with militant ties. "This is not about religion at all," he said, "[but] a matter of law and order."
The virtues and limitations of Thaksinomics have also inspired heated debate. Some claim that Thaksin's economic programs are little more than populist handouts and easy-credit schemes that, like a caffeine high, won't produce lasting benefits. Some argue that his policies have contributed to a worrisome buildup of consumer debt that will exacerbate the next economic downturn. Thaksin's measures are "artificial," says Sompop Manarungsan, a political economist at Bangkok's Chulalongkorn University. If these "welfare-like" policies continue, "you'll have more and more distortions in the economy that can hurt future development," Sompop adds.
Then there's the controversy over Thaksin's own business empire. When he became Prime Minister, he complied with Thai law aimed at avoiding conflicts of interest among public officials by transferring most of his holdings to his son and two teenage daughters. Still, his critics claim that firms controlled by the Thaksin family, led by wireless-and-satellite telecommunications company Shin Corp., have benefited from government policies. Somkiat Tangkitvanich, a research director at the Thailand Development Research Institute, a nonprofit think tank, cites as an example a 2003 regulation introduced by the government that imposed an excise tax on companies in the telecom sector. He argues that this created a barrier to new entrants and protects Shin's position as the country's dominant provider of mobile-phone service. "I believe that the benefits generated by the economic boom under Thaksin's regime don't distribute equally among the people," says Somkiat. However, Shin's assistant vice president Panya Thongchai calls such criticism "unfair and misleading," noting that the excise tax applies equally to all players in the industry, including the Thaksin family's firm. Government spokesman Jakrapob denies that Thaksin's administration has pursued policies that specifically benefit the Prime Minister's companies, noting that "when the economy does well, every company benefits."