Thailand's dream team steps down

Thailand's deepening economic crisis claimed its first political victims yesterday, as two key government ministers stepped down.

Amnuay Viravan, the embattled finance minister handed in his resignation, followed shortly afterwards by commerce minister, Narongchai Akrasanee. Others in the political "dream team" set up to mend Thailand's beleaguered economy may quit today.

The resignations mark a blow for the Prime Minister and have sparked widespread nervousness about what lies ahead. Once a leading "Asian Tiger", Thailand's rapid economic growth profited from high levels of foreign investment and an open, "globally-orientated" economy. But last year underlying troubles rose to the surface.

The continuing economic crisis, which has seen Thailand's growth rates plunge from highs of the late 1980s to just over 5 per cent last year, could lead to more political instability and even the fall of the government: Chavalit Yongchaiyudh, the Prime Minister, has staked his future on reviving the country's economy. He is expected to name new finance and commerce ministers over the next few days, but has temporarily placed himself in charge of running the economy. It has been dogged by big debts, a massive slump in property prices and rising unemployment.

The Prime Minister assured investors that there would be no immediate change in economic policies and said his priority would be to defend the country's currency, the baht, from attack by speculators.

Neither Mr Amnuay, the finance minister, nor Mr Narongchai were elected members of parliament. The technocrats were brought into government as part of the Prime Minister's "dream team" to bolster confidence in government economic polices. Some members of the governing coalition were never comfortable with this and have repeatedly blocked measures recommended by the duo, preventing tight - and unpopular - fiscal polices being implemented.