VZCZCXRO9288
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #3623 1800919
ZNR UUUUU ZZH
R 290919Z JUN 07
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 8008
INFO RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS BANGKOK 003623 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON TH
SUBJECT: THE END OF CEO BUDGETS:  AN EXAMPLE OF POST-COUP 
RECENTRALIZATION 
 
 
¶1.  Summary:  The Thaksin-era CEO budget program provided 
Thailand with a limited degree of budgetary decentralization. 
 By providing provincial-level officials discretion to 
allocate a portion of development funds the program helped 
strengthen the provincial governors and contributed to moving 
decision making out of Bangkok.  With the end of the program 
following the September 2006 coup, the authority of the 
central government in Bangkok has been reasserted, perhaps 
stronger than ever.  End summary. 
 
¶2.  As part of a broader effort to empower provincial 
governors, the Thaksin administration introduced the 'CEO 
budget' program, setting aside roughly 10 percent of the 
national development budget to be allocated by provincial 
level authorities.  Under the program a general meeting of 
provincial authorities, including local members of 
parliament, would propose a range of programs in support of 
the provincial development plan for funding.  The proposals 
usually involved projects included in the development plan, 
but could include new ideas as well.  The list would be 
reviewed by a selection board composed of the provincial 
governor, the vice governor, and the chiefs of the various 
agencies operating in the province (about 20 officials 
including finance, agriculture, labor, education and police), 
which would consider whether the proposals matched the 
provincial priorities for the development plan and decide on 
which projects to fund.  Examples of funded projects included 
programs for poverty reduction, education, SME support, canal 
digging, road construction, erosion control and tourism 
promotion. 
 
¶3.  The amount of decentralization involved in the CEO budget 
program should not be overstated.  The budget available was 
limited, the projects considered had to follow the centrally 
approved development plan, and the selection board members 
were themselves representatives of central government 
ministries.  The provincial governors themselves are 
appointed by the Ministry of Interior for 2-3 year terms. 
The program nevertheless is believed by some to have 
increased respect for the governors from officials from other 
agencies who report to their parent ministries in Bangkok and 
typically pay little regard for the governor.  Much of the 
success or failure of the program ultimately depended on the 
personal quality of the governor.  The program also served as 
a vehicle for local MPs to promote pet projects (and dispense 
pork), replacing the 'MP's development fund' that had existed 
previously.  Indeed, in practice roughly half of the projects 
funded under the program were proposals from Bangkok 
politicians.  The program also increased the ability of local 
authorities to determine priorities within the development 
plan. 
 
¶4.  The demise of the CEO budget program with the September 
2007 coup is unlikely to have any significant effect on 
provincial development or infrastructure funding.  Local road 
maintenance, for example, had always been the responsibility 
of the tambon (local), not the provincial, administration, 
and construction and maintenance of main highways was the 
responsibility of the National Highway Department.  The 
development funds lost with the elimination of the CEO budget 
are expected to be made up by increases in funding received 
through ministerial channels. 
 
¶5.  The main effect of the elimination of the CEO budget 
program is that now all decisions on funding allocations will 
be made at the central level, and will be viewed through the 
prism of individual ministries, not the multi-disciplinary 
provincial boards.  This reasserts the traditional dominance 
of the central government in Thailand.  Indeed, with the MP's 
development fund having been superseded by the CEO budget 
program, the end of that initiative tends to make the central 
bureaucracy even more powerful than before. 
 
¶6.  Comment.  The CEO budget program represented another way 
in which the Thaksin regime sought to promote the economic 
empowerment of the regions outside of Bangkok.  For all the 
hoopla, the impact of the program was limited, varied 
according to the personnel involved, and even drew criticism 
for its appropriateness.  The end of the program is unlikely 
to have any profound effect, or even be noticed by most, but 
it provides another example of the reassertion of traditional 
authority from the center that is characteristic of much of 
Thailand's modern history. 
BOYCE