Thailand 10.0: Why the Nation’s Political and Military Elite Need a Reset...

Thailand 10.0: Why the Nation’s Political and Military Elite Need a Reset to Succeed

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The Thai monarchy’s tenth transition of power will be smooth, but the future of the nation’s economy and democracy will be far from it.

Prince Maha Vajiralongkorn will accede to the throne within the next few months, thus officially beginning the tenth reign of the Chakri Dynasty.

Detailed analyses of the legacy of his father, King Bhumibol, both positive and critical accounts, have invited much attention. But not much has been said about the political economy and deep-rooted challenges that Thailand 10.0 will confront.

The country faces a knotty growth–stability dilemma. Since the new millennium, in the three periods Thailand has been under military rule, social order has been attained at the expense of economic growth. Yet when elected governments rule the nation, their growth strategies usually lead to political turmoil, paving the way to coups d’état.

This contradiction has been increasingly acute over time, from the Thaksin Shinawatra era (2001 to 2006) to the Prayuth Chan-Ocha regime that has been in place since the coup of 2014.

Social stability leads to economic stagnation

Since the 2000s, Thailand has seen three military, or military backed governments, under Surayud Chulanont (2006–7), Abhisit Vejjajiva (2008–11), and the current Prayuth regimes.

If you ask Thai people what they remember from these administrations, they’ll say something about social order and royalist campaigns. Economic prosperity and income redistribution are not the issues most people would associate with them.

This is not simply a result of policy rhetoric or leadership styles, it’s about the particular power and legitimacy that underpin this kind of regime. Take the Prayuth government; the junta has been highly successful in restoring “stability” to Thailand. But stability has a very specific meaning in Thai society.

Since the patrimonial authority of Field Marshal Sarit Thanarat (1958–63), stability has been framed to mean a regime where royal dominance prevails in the political realm, in addition to hard-budget constraints in the economic realm and the minimisation of anti-incumbent forces in the social realm.

By this definition, order and stability are the easiest task of any military government. In Thailand, such governments simply employ an ultra-royalist stance to legitimise their interventions, appoint traditional technocrats and familiar tycoons in key positions across the state apparatus, and suppress all political dissidents.

But it’s exactly these political alliances and this kind of ideological legitimacy that deter military governments from doing things that would reform the economy in the progressive sense.

They cannot support conglomerates outside their small circle. They cannot pursue meaningful bureaucratic restructuring. They cannot take a pro-globalisation stance. And they cannot allow much political or ideological competition.

How far can all these disincentives lead the economy? Can technological innovation flourish without a substantial level of freedom?

The late King Bhumibol will be replaced by Prince Maha Vajiralongkorn within the next few months.
Jorge Silva/REUTERS

Thailand’s economic “catch-up” from the 1960s to the 1997 Asian financial crisis was only a partial success, and it left the country with a number of institutional problems. These range from centralised and bloated state structures to oligarchic capitalism and a highly unequal society.

Sadly, the power and legitimacy that brought the military juntas to office subsequently diverted them away from addressing these pitfalls. Most of the feasible policies the military governments could implement to promote growth can be characterised as “race to the bottom” ideas, a desperate attempt to attract overseas capital, such as easy grants for foreign investors and exorbitant high-speed train projects.

Accordingly, the worst economic outcome of military governments is stagnation, while the best scenario is moderate growth driven by short-sighted liberalisation.

But growth leads to political conflict

The tricky part for Thailand is that elected governments don’t seem to have the right answers either. They just face a different set of structural impediments, as seen in the Thaksin era and, to a lesser extent, the Samak Sundarajev/Somchai Wongsawat (2008) and Yingluck Shinawatra (2011–14) governments.

In contemporary Thailand, for any political party to win a majority vote and deliver growth and redistribution impressive enough to get re-elected, the following are almost prerequisites.

It has to ally with rural voters; restructure and streamline the bureaucracy (including the army); move further with free trade agreements; and increase public spending. But doing all these things is likely to, sooner or later, cause political discontent and a quick resumption of street protests.

Why? Because such electoral tactics incite class politics (by arousing expectations of rural voters); marginalise military–technocrat alliance (by putting the genie back in the bottle); and, consciously or not, challenge the sole leadership of the monarchy (by claiming to be an alternative saviour of the poor).

Contest also emerges in the economic realm. Expansionary fiscal policies – especially money poured into the countryside and the resulting deficits – and high inflation, always get the mandarins nervous.

After all, this is a country that considers the “stable macroeconomy” to be the major source of its partially successful catch-up (while South Korea attributes its even better performance to industrial policy).

Political conflict, then, is inherent in the route that takes a political party to be elected and win re-elections.

Anti-coup demonstrators march in Bangkok, May 2016. Jorge Silva/Reuters

If political parties aim to be small targets to avoid such conflict, then Thai politics may revert to that of the 1990s, when all civilian governments were multi-party, short-lived and indecisive enough to partly cause and subsequently mismanage the 1997 Asian financial crisis.

The King’s real legacy: men can make history

If these contradictions are becoming increasingly prominent, what could the solution possibly be? If anything, the late King Bhumibol has already offered a crucial lesson to Thailand.

His reign well illustrates how determined human agency is able to defeat and take control of threatening nemeses, ranging from the internal military to communist insurgencies. To put it another way, as Karl Marx once said:

Men make their own history, but neither of their own free will, nor under circumstances they themselves have chosen.

Royal hegemony under King Bhumibol was a man-made phenomenon that developed over seven decades and led Thailand’s political economy to the landscape hardly imaginable at the end of the Second World War in 1945.

For Thailand 10.0 to be prosperous – both politically and economically – either military or civilian governments have to go beyond their comfort zones and exercise the power of human agency against the status quo, rather than following structurally determined paths.

A military junta could achieve economic and social progress if it dares to reduce military budgets, rationalise the bureaucracy, and allow more political and ideological competition.

A civilian government that could pull off both economic and social stability would need to reconcile Bangkok’s middle class with rural voters, and conventional technocrats with growth-enhancing sympathisers. All the while standing tall for radical redistributive measures, such as progressive tax reform.

Without such bravery against the odds, Thailand is poised to continue to suffer frequent regime changes, alternating between governments of peaceful stagnation and those of growth-led turmoil.

The Conversation

Veerayooth Kanchoochat, Associate Professor of Political Economy, GRIPS This article was originally published on The Conversation. Read the original article.

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