It's nearly 10 p.m., and the new Carrefour hypermarket near Bangkok's waterfront is hopping. Hundreds of late-model Toyotas, Hondas, and Fords crowd the parking lot. Inside, shoppers jostle each other, their carts piled high with groceries. One of them, Sunthorn Kansatian, pulls five-kilogram sacks of rice from the shelves. The rice is for the monks at a Buddhist temple where he'll soon celebrate his birthday -- a luxury he hasn't permitted himself since Thailand went into a financial tailspin in 1997, dragging his business of selling household goods down with it. "In the past two years, life has gotten better," says 44-year-old Sunthorn. "Now everyone has money in their pockets."

Sunthorn may be bringing rice to the temple, but he doesn't say it's the monks who have improved his fortunes. The real credit, Sunthorn will tell you, goes to Thaksin Shinawatra, Thailand's Prime Minister since January, 2001. Thaksin's policies of low interest rates and cheap loans to farmers have helped fill pockets with cash -- which has started Sunthorn's business growing again. So Sunthorn has twice sought out Thaksin to thank him. "I just said, 'Hello, how are you?"' Sunthorn recalls. On both occasions -- once at the Prime Minister's Bangkok residence and once at a golf course -- Thaksin glanced his way and waved. Not much, but enough to satisfy his admirer. "The Prime Minister is a guy who can talk to people of every level," Sunthorn says.

Sunthorn isn't alone in his admiration for Thaksin, a seasoned telecom tycoon worth as much as $2 billion. After two and a half years in office, Thaksin enjoys huge popularity, with polls showing approval ratings of some 70%. Economic growth hit 5.3% last year and clocked 6.7% in the first quarter this year, one of Asia's fastest growth rates. That came as a surprise to investors, many of whom had written off Southeast Asia as a region flattened by the 1997 crisis and suffocated by China.

Thais might have bought into that pessimism once, but they sure don't now. The Bangkok stock exchange is up 41% for the year. Hard-currency reserves have hit $40 billion. Interest rates have fallen to 1.25%, their lowest level since the crisis. Thaksin is helping peasants and poor urban laborers with affordable medical care and microloans to small businesses and farms. He's cracking down on drugs, prostitution, and organized crime by ordering police sweeps and going after elected officials and civil servants accused of corruption. "The bottom line is to improve the lives of the people, make the country progress, and bring peace to society," says Thaksin.

Yet while many Thais admire Thaksin and his accomplishments, others are very uneasy over what this politician is doing. Opponents fear Thaksin is increasing his grip on power by cutting down potential rivals and filling key government and military posts with family members and associates from Shin Corp., the telecom and media empire he built up in the 1990s. They say he targets vocal opponents in Thailand's nongovernmental organizations. Others point to a brutally effective campaign against drug dealers as an assault on civil rights. Finally, there's concern that he is alienating foreign investors and that his pump-priming will set the economy up for a fall once the stimulus stops. "He's nothing but an opportunist," says a former adviser to Chuan Leekpai, Thaksin's predecessor. "He's going to get the country into trouble."

Tough charges. Thaksin denies any improper acts and bristles at accusations that he is abusing his position for financial gain. "No way," he says. "Very few people say that." Charges of nepotism? A spokesman says the Prime Minister's relatives and associates earned their jobs. The police crackdown? "Everything we have done has been according to the Thai constitution," insists Thaksin.

Controversy will clearly dog Thaksin throughout his career. But if he can keep the economy roaring -- and that's still unclear -- Asia and the world will be hearing plenty more from him. Unlike any other democratically elected Prime Minister in Thai history, Thaksin seems likely to complete a full four-year term and not get toppled in a military coup or a no-confidence motion in Parliament. By all accounts, he will be handily re-elected at the next polls, expected in 2005. That would give him at least eight years on the world stage.

That would suit Thaksin just fine. He makes it clear that he wants to play successor to Malaysia's Mahathir Mohamad or Singapore's Lee Kuan Yew as an aggressive advocate of Asian growth backed by a strong hand. Thaksin, who turns 54 on July 26, especially admires Mahathir's combative stance. "Dr. Mahathir sings 'My Way.' I sing, 'Love me, love my dog,"' Thaksin quips.

Thaksin courts the West in some ways: He wants a free-trade agreement with the U.S. But he also bears a message of Asian power. In a June 5 speech, he called for the creation of a new class of Asian bond that the region's governments could issue and invest in instead of putting funds into U.S. Treasuries. "Our reserves," said Thaksin, "when deposited in bonds in the West, created more wealth [for] the Western hemisphere without contributing to our own growth."

Whether savior, troublemaker, or opportunist, Thaksin is surely a complex character. The son of a well-to-do silk trader and Parliament member from the remote northern province of Chiang Mai, Thaksin was raised on a steady diet of discipline and ambition. At a young age, he developed a fascination with law enforcement and idolized cops. He graduated from Thailand's Police Cadet Academy in 1973, and then won a Thai government scholarship to study criminal justice in the U.S. He earned a master's degree from Eastern Kentucky University in Richmond, Ky., and a PhD from Sam Houston State University in Huntsville, Tex. On returning to Thailand, he joined the police, eventually working his way up to lieutenant-colonel.

Thaksin's police career taught him to work official connections and gave him a glimpse of the benefits of power. After a couple of failed attempts at starting a business, he and his wife in 1982 set up a company that won a contract selling computer equipment to the police department. The company, which grew into Shin Corp., today owns iTV -- Thailand's biggest commercial broadcaster -- and Advanced Info Service, which runs Thailand's leading cellular-phone service.

Thailand has a long history of strongman rule and corruption, and in the mid-1990s was dominated by wealthy crony capitalists and the politicians who worked with them. When the property and financial bubble popped in 1997, Thailand became ground zero in the Asian crisis. In 2001, after Thaksin was elected by a populace sick of Chuan's adherence to International Monetary Fund-imposed austerity, most analysts assumed the worst. Because Thaksin was one of Thailand's best-connected tycoons, it appeared the country was headed back to the crony-capitalist model. Thaksin hardly got off to an auspicious start: During the campaign in December, 2000, he was indicted on charges of failing to disclose all of his assets and acquitted by just one vote in the 15-member Constitutional Court.

Thaksin, though, proved much shrewder than his detractors painted him to be by immediately moving to enrich Thailand's working classes. His administration ordered the Government Savings Bank and other state-owned financial institutions to lend $2.3 billion to the Village Development Fund, which makes loans to farmers and small businesspeople. The Government Housing Bank was instructed to make $5.2 billion in housing loans. Then there was $300 million in loans for home-PC purchases, $1.2 billion for new taxis, and $2.2 billion in loans to help civil servants pay for vacations. "We're pumping in money to create income and jobs," contends Thaksin.

The economy is certainly humming. Farm incomes rose 11% last year. Exports surged 18% in the first half, thanks in part to sustained low costs from the depreciation of the baht, now 40% weaker than it was in 1997. Thailand Inc. is thrilled. "There's a strong hint of CEO-type management in Thaksin," says Chumpol Nalamlieng, president and CEO of Siam Cement Public Co., whose company is flourishing. "He's very conscious of economic achievement."

Thaksin says he expects gross domestic product growth of 6% for this year, followed by 7% in 2004 and 8% in 2005. Estimates from independent analysts range from 3.5% to 5.5%. However fast the growth is, a quick tour of Bangkok reveals a level of prosperity not experienced since the bubble years. The capital boasts a shiny new Skytrain above its streets, and soon it will have a subway below, making it easier for commuters to bypass the horrendous traffic jams that clog the streets. And the police have confined Bangkok's go-go bars, massage parlors, and brothels to clearly defined zones, instead of allowing them to spill out into neighboring districts.

In Thailand's thousands of villages, the changes are equally evident. Freshly built houses dot the countryside, and new motorbikes abound. One farmer who has prospered is Thanom Yothana. The stocky 55-year-old is headman of the village of Tao Poon, 140 kilometers north of Bangkok. He borrowed $476 from the Village Development Fund and delayed paying off previous loans. The money helped Thanom add a new catfish pond to his farm, boosting his income last year. That allowed him to build a two-story house and buy an $18,000 Toyota pickup truck. "I'll be able to pay my debt on time," Thanom says while tossing feed into a pond teeming with 90,000 catfish. "Next year I'll borrow more."

A remarkable turnaround in manufacturing -- which has benefited from tax breaks on imports of equipment used in research and development -- is also helping Thaksin. Thai Acrylic Fibre Co., for instance, is buying $1.4 million worth of imported machinery that will boost its capacity by 25%. Last year, the Indian-Thai joint venture won the prestigious Deming Award for quality and saw its profits double. Thailand's auto sector is booming, too. In May, 2000, General Motors Corp. started exporting its Opel Zafira to Germany from its cavernous plant in Rayong Province. The sport-utility vehicle -- GM's first Thai-built car aimed at the German market -- quickly caught on among Thais. With Thaksin's easy credit policies, Thais bought 17,000 Zafiras last year, 10% of GM's production.

CEO Thaksin is one role the Prime Minister plays; Top Cop Thaksin is the other. He's driven by a desire to solve the problems that made Thailand a byword for vice in Asia: narcotics, prostitution, and organized crime. Thais love him for it. "Life is safer now," says Isaree Sroysuntorn, a 33-year-old accounting clerk out shopping at 10 p.m.

That safety has come at a cost. Since February, nearly 2,400 people allegedly involved in the narcotics trade have been gunned down, according to the government-funded National Human Rights Commission. "This is a massacre," says Pradit Chareonthaitawee, head of the commission, which is investigating a number of the killings in which Pradit believes the police played a suspicious role. The government acknowledges that rogue cops working in league with drug dealers are responsible for some of the killings, says Suranand Vejjajiva, the spokesman for Thaksin's party, and vows to punish any police found guilty of such killings. Police have also been involved in a handful of fatal shootouts in the line of duty, he says, but most of the killings were carried out by drug dealers eliminating rivals or potential witnesses against them. Pradit agrees that drug dealers were responsible for some of the killings.

Pradit also claims that the Prime Minister is using the anti-crime crusade to target advocacy groups. Seven Thai environmentalists who protested major infrastructure projects have told the commission that their names are on a list of suspected criminals that police are circulating. Thaksin "doesn't like non-governmental organizations," says Pradit. Thaksin insists that only wanted criminals are targeted: "As long as they don't have a criminal case, we are not going to bother them." Yet he hardly sounds like a committed democrat. "Democracy is the means to an end," he says, "not the end itself." In March, he rejected U.N. criticism of his human rights record, saying "The U.N. is not my father." He subsequently retracted the remark, admitting that he had "overreacted."

Yet as Thaksin grows confident in his job, he is also revealing a nationalist streak in economic matters that investors find irksome. His government discouraged foreign retailers by proposing regulations that would have made it more difficult to open stores in Thailand, although the government scrapped those plans after Carrefour of France and Britain's Tesco PLC protested. "Thaksin has sent, at a minimum, conflicting signals," says an executive of a multinational corporation with petrochemical investments in Thailand. This is a concern because foreign direct investment last year fell to $900 million, from $3.8 billion in 2001, according to World Bank data.

Negotiations over the fate of insolvent refiner Thai Petrochemical Industry highlight those conflicting signals. TPI owes $2.7 billion to more than 100 creditors, many of them foreign, but has fought them off for six years with a series of 37 lawsuits. In June, the Ministry of Finance took over TPI, leaving founder Prachai Leophairatana as an adviser and removing the Australian accounting firm that creditors had chosen to run the company. Although that was hardly the outcome the creditors had sought, on July 7 they approved the changes -- for fear of getting cut out of any debt restructuring, according to a senior manager at one of the banks. "If we'd voted no, we might not get a seat at the table," says the Bangkok-based banker. Prachai declined a request for an interview. Thaksin says the government took over TPI because no progress was being made. A never-ending fight, says Thaksin, would "ruin the company and, finally, hurt the banks."

Critics also complain that Thaksin has not done enough to heal the banking sector. The Thai Asset Management Corp. carved out enough bad debt from Thai banks to reduce the level of nonperforming assets in the financial system to 30% last year, from a peak of nearly 50% in 1999. Still, bankers in Bangkok suspect that actual figures are higher. Ratings agency Standard & Poor's warned in a July 6 report that Thai banks still suffer from recurring problem loans, low profits, and a weak capital base. "Thailand has improved, but it's still standing on shaking knees," says Nancy Koh, an analyst at S&P in Singapore.

The amount of debt that Thaksin's projects are generating raises questions, too. Since 2001, state-owned banks have pumped $13 billion in debt into programs that have given money to the poor. The fear is that Thaksin may have hooked the economy on easy credit. "When you start this kind of thing, you can't stop," warns Arporn Chewakrengkai, director of strategic analysis at the Government Pension Fund in Bangkok. The Prime Minister isn't worried. "Some people think the poor are those who never honor their loans," he says. "But they are much better than the businesspeople."

As the economy grew and tax revenues soared, public debt as a share of GDP fell to 54% last year, from 70% before he came to office. Thaksin is already working on the next project. He wants to grant deeds of ownership to vendors and shop owners in the underground economy. That way, a vendor could prove to a bank that he owns his pushcart and get a microloan using the cart as collateral. The money would go into the business and produce taxable income. "We'll bring up the underground economy," says Thaksin. He hopes the initiative, combined with his other programs, will add a full percentage point to Thailand's GDP growth -- and raise enough taxes to help balance the budget. Punishment for the criminals. Profits for the poor. It's brilliant politics. Will Thaksin transform Thailand or set it up for another crisis? Either way, the cop-turned-tycoon-turned-Prime Minister is leaving his mark. By Michael Shari in Bangkok