First phase in government service (1949-1959)

After finishing his Ph.D., Dr. Puey returned to Thailand and entered the government service at the Comptroller-General Department, Ministry of Finance in 1949, becoming instrumental in negotiating loans from the World Bank for developing the national infrastructure such as the construction of Chao Praya Dam to generate electricity and irrigate the paddy field, the repair of Hua Lum Pong main railroad terminal which had been partly damaged during the war and the expansion and revamping of Bangkok main seaport, etc. Even being a low level official at that time, but well versed in economics and the projects to be implemented as well as his shrewdness and clever discussion, Dr. Puey was the vital force in the successful negotiation for the loans.

                                                                                                      Chao Praya Dam

                                                                                                    Dr. Puey in International Conference.

Apart from his capability in negotiating the loans, Dr. Puey was able to discuss with high level American officials of USOM and the U.S. embassy minister for a joint proposal to the U.S. government to construct Friendship Highway between Saraburi and Nakhon Ratchasima as an example of highway at no costs to the Thai government. That highway was the first to be constructed under international standard, built to the specifications and paved with asphalt and thus rendering smooth surface for high speed travel. Thereafter, the Thai Department of Highways adopted this standard for the construction of other highways.

After three years of service, he was appointed the technical assistant to the permanent secretary in 1952. Later on he was appointed the deputy governor of the Bank of Thailand in 1953 and also a board member of the National Economic Council at the same time.

At the end of the war, the economy, treasury and banking of Thailand were in the state of utter disorder, as described in his memoir:

“There were several exchange rates with foreign currencies, namely, the official rate for rice export and some import goods such as books or goods imported by the government, another rate for tin export and yet another rate for rubber. Apart from that, there was also the market rate which was fluctuating in disarray. Besides there were also black market rates. These matters put our economy in chaos. It was difficult to plan anything for both the government and the private sectors. Owing to uncertainty in the exchange rates, e.g., importing goods was a risky business and businessmen had to add extra margin for the exchange risk, and thus unnecessarily causing goods to be more expensive.

The public finance was also in much disarray. For many years the government had to fix the income budget less than half of the expenditure budget. To take care of the deficit it had to borrow money from the Bank of Thailand or from abroad. There were no such things as the bond market or treasury bond. As for the annual statement of account of the government, they were overdue for many years. The one that had been summarized were uncertain and at best the guesswork of unforeseeable results. Sometimes an urgent call must be made to the Bank of Thailand requesting a loan in order to be able to pay salaries to the civil servants.

Such solutions to improve the system for better economic function, banking and public finance were the result of concerted collaboration among my friends and me starting in 1952 all along and it took us many years. To name a few of these persons but unfortunately not all of them, they were Khun Boonma Wongsawan, Khun Sommai Huntrakool, Khun Pisuth Nimmanheminda, Khunying Supabh Yossundara and Khun Krongtong Jutima, etc. Most of them were the new young generation of bureaucrats in the Bank of Thailand and Ministry of Finance.”

Many respected elders said that the vital mechanism in solving and revamping these entangled problems into orderly matters was Dr. Puey, particularly the matter of exchange rates which were finally integrated successfully into one single exchange rate, an important factor for the smooth and efficient progress in international trade and resulting also in other aspects of economic stability.

After just a little more than seven months in the position of deputy governor at the Bank of Thailand, Dr. Puey found himself in the eye of political storm. It was caused by the need of Field Marshal Sarit Thanarat to “buy” the Union Bank of Bangkok Limited from Mr. Sahat Mahakhun. However, this bank was required to pay a penalty of several million bahts to the Bank of Thailand owing to its breach of regulation of the Bank of Thailand. The field marshal and many other influential political persons at that time wanted the Bank of Thailand to lift the penalty but Dr. Puey would not accept this “bend with the wind policy”. In late 1953, he was thus removed from the deputy governor position of the Bank of Thailand, the shortest tenure of that office in the history of this central bank.

Thereafter, Police General Pao Sriyananda, the powerful national police chief and Minister of Interior, tried to force Ministry of Finance and the Bank of Thailand to employ the company in which he had financial interest to be the printer of Thai banknotes instead of the existing Thomas de la Rue Company. The Minister of Finance at that time sought the opinion of Dr. Puey and sent him to observe the operations of that company in the U.S. Upon his arrival, he met with Alan Dulles, the Director of C.I.A. and big brother of John Foster Dulles, the Secretary of State in the Eisenhower administration at that time. Alan Dulles tried to persuade him in various ways to comply with the proposal of General Pao. However, Dr. Puey reported that the said company possessed no operations in the manner to be reliable in any ways. In his memorandum to the Minister of Finance, Dr. Puey recommended continuing the printing of Thai banknotes by Thomas de la Rue Company.

This obstruction of interest of influential political persons during the reign of terror in Thailand affected his job security as well as the safety of life. Dr. Puey then contacted Professor Frederic Benham, his professor at LSE, for doing research work at Chatham House in London. However, the Minister of Finance at that time secured him the position of economic and treasury counselor at the Royal Thai Embassy in London, a newly established position instead.

In 1956, Dr. Puey assumed this position and during 1956-1958, upon Thailand entering membership in the International Tin Council (I.T.C.), he was appointed the representative of Thailand in the said council and had been elected the deputy chairman of I.T.C. during 1958-1959. During this tenure of office as representative from Thailand, Dr. Puey demonstrated his ability in the successful negotiation for I.T.C. to increase the Thai quota of tin export from 7.35% to 8.88%.

He was the Economic and Public Finance Counselor at the Royal Thai Embassy until 1959. After Field Marshal Sarit Thanarat became the prime minister of Thailand, Dr. Puey was given the opportunity to return to the government service in Thailand in many important positions to be further described.

                                                                                    left: Field Marshal Sarit Thanarat, right: Police General Pao Sriyananda