During elections last weekend, Thai billionaire businessman Thaksin Shinawatra won a landslide victory, and barring certain legal challenges, will become Thailand’s next prime minister.

As owner of Thailand’s largest wireless wireless communications company, Advanced Info Service, Shinawatra is considered Thailand’s richest man. The question of his exact net worth has caused some controversy, because the government’s National Counter Corruption Commission has found him guilty of hiding assets under the names of his household help (do Thai maids normally own millions in stock?). Though Shinawatra is appealing the decision, blaming a secretarial oversight, if he loses he could be barred from politics for 5 years. Most expect the strength of his election victory to ultimately save him from legal defeat.

Shinawatra created the Thai Rak Thai “Thais love Thais” political party a couple of years ago to promote his election platform. Its theme is that, through generous spending, Thais can save themselves from the economic problems foreigners have wrought. Shinawatra apparently believes in “Santa Claus” government, and promises to spend large sums of money to spur consumption and hence the economy. For example, each of Thailand’s 70,000 villages has been promised a one-million baht ($23,000) gift. Indebted farmers have been promised a three-year moratorium on interest payments. And Shinawatra plans to set up a national asset management company that will use government (read taxpayer) money to bail out insolvent companies and presumably their bankers.

Thai banks are expected to be big short-term beneficiaries of Shinawatra’s campaign pledges. Four years after the Asian economic crisis, many Thai banks still are weighted down by non-performing loans representing as much as 20% to 40% of total loans. Without government assistance, banks might be able to recover only pennies on the dollar of some defaults, but the government has bought bad loans from banks for as much as 60% of loan value. If Shinawatra’s government-funded national asset management company takes bad loans off the books at such rates, the Thai banking industry could receive a healthy boost.

The downside to Shinawatra’s proposed generosity could become apparent over the longer term. Public debt already represents about 60% of GDP, and analysts predict Shinawatra’s spending plans could push it up over 70%. This could lead to downgrades by international credit rating agencies, higher interest rates, and potentially a weaker currency. And while a government bailout of banks would help out most banks in the short term, it would continue to hinder the deeper structural reforms (corporate restructuring, foreclosure law, government interference) required for the Thai banking industry to be stable and profitable over the long run.

Given Shinawatra’s healthy victory and his stimulus plans, the consensus view of Asian market analysts is that there will be a short-term market boost in Thailand, focused on the banking sector and driven by local investors (Thai stocks rose over 3% the day after the election).

On the other hand, most analysts expect foreign investors to be a bit slower to join the party as they wait to see whether Shinawatra is willing to tackle Thailand’s deeper structural economic problems, which can’t be solved by increased government spending. It may be awhile before they’ll want to jump in.