Entering Thailand 10.0 Either peaceful stagnation or growth-led turmoil

Entering Thailand 10.0

Either peaceful stagnation or growth-led turmoil

 

Veerayooth Kanchoochat(GRIPS)

 

Royal succession has been completed and marked a momentous milestone in Thai history. Thailand is entering the new reign of King Vajiralongkorn, the tenth monarch of the Chakri Dynasty. Although the socio-political background of which the current King has ascended the throne seemingly differs from the preceding epoch, both are comparable in certain respects – especially political turmoil and economic stagnation.

1946 and 2016

The majority of Thai people may reminisce about the prosperity under the reign of King Bhumibol (1946–2016). However, it was actually amid a string of short-lived, unstable governments and economic uncertainty of the post-war contexts, plus an unexpected death of King Ananda, in which Prince Bhumibol succeeded to the throne in June 1946. It is how the country under his reign has been transformed economically and socially from backwardness to an upper middle-income status that earns high commendations from the international communities.

The year 2016 has much in common with 1946. It has been a decade since the political divide has begun, two coups d’état staged, economic growth slowed down and fluctuated, and signs of social malaise unfolded. To put it into perspective, the contemporary challenge Thailand is encountering is how to achieve both a thriving economy and social stability at the same time. In the early period of King Bhumibol, it required a decade or so before the settlement was founded by the reclamation of royal hegemony together with authoritarian developmentalism led by Field Marshal Sarit Thanarat. But in the new millennium, the solution is not yet within sight, as neither military nor civilian government seems to have an answer to such a political-economic challenge.

Since the 2000s, whenever Thailand is under military rule, social order is attained at the expense of economic growth. Yet, when elected governments come to office, their growth strategies usually lead the country to political conflict. This contradiction has been increasingly acute over time from the Thaksin to the Prayuth eras.

Military, stability and stagnation

After the Asian financial crisis, the military, or military-backed, governments have been featured in the Surayud (2006–7), Abhisit (2008–11), and the current Prayuth (2014–present) regimes. If you ask Thai people what they remember from these administrations, it would be something about social order and royalist campaigns. Economic prosperity and income redistribution are not the issues that most people would link with them. And this is not simply about policy rhetoric or leadership styles – it is about the particular power and legitimacy that underpin this kind of regime.

Take the Prayuth government, for example. The junta may have been successful in restoring “stability” to Thailand. But stability has a specific meaning in this society. Beginning under the patrimonial authority of Field Marshal Sarit Thanarat (1958–63), stability has been framed to mean a regime with royal dominance prevailing in the political realm, together with hard-budget constraints in the economic realm and the minimisation of anti-incumbent forces in the social realm. That said, by this very definition, order and stability are the easiest task of any military government. They 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.

However, it is exactly these political alliances and 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 and ideological competition to take place. How far can all these disincentives lead the economy to? Would technological innovation flourish without a substantial level of freedom?

Thailand’s catch-up from the 1960s until the mid-1990s was only a partial success and left the country with a number of pitfalls, ranging from the centralised and bloated state structures to oligarchic capitalism and a highly unequal society. Power and legitimacy that brought the junta to office subsequently divert its trajectory away from addressing these pitfalls. Most of the feasible policies it could do to promote growth are rather the “race to the bottom” ones, such as easy grants for foreign investments and exorbitant high-speed train projects. Accordingly, the worst likely economic outcome of military governments is stagnation, while the best scenario is moderate growth driven by short-sighted liberalisation.

Election, elation and elimination

The tricky bit is that elected governments are not the outright answer either. They just face a different set of structural impediments, as seen clearly in the Thaksin (2001–6) and, to a lesser extent, Samak/Somchai (2008) and Yingluck governments (2011–4).

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 an obligation. They have to ally with rural voters; restructure and streamline the bureaucracy (including the army); move further with free trade agreements; and increase public spending.

Nonetheless, trying all the above tactics is likely to cause political discontent sooner than later. In political terms, it means that class politics is incited; the military–technocrat alliance is marginalised; and, consciously or not, the nation’s sole leadership of the monarchy is challenged. Contestation will emerge even in the economic realm. Expansionary fiscal policies and the resulting deficits and high inflation will provoke controversy among the mandarins. 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 boils its even better performance down to industrial policy). Therefore, a 5% inflation would suffice in order for newspapers to use the phrase “economic crisis” in their headlines. In short, political conflict has been inherent in the route that takes a political party to win elections and re-elections.

If we assume otherwise, that all the parties aim to be small and medium-sized enterprises to avoid such conflict, then Thai politics will revert to that of the 1990s when all civilian governments were multi-party and fragmented, and inefficient enough to partly cause the Tom Yum Kung crisis in 1997. No better prospect than a single-party administration.

Lessons from the late King

If the growth–stability contradiction is increasingly prominent, what might be the solution? If anything, the late King Bhumibol has already offered a life lesson to Thailand.

From a social science perspective, his reign well illustrated how a determined human agency is able to change, and take control of, the existing structures. To put it another way, even Karl Marx who was criticised for structural determinism once said that “Men make their own history, but neither of their own free will, nor under circumstances they themselves have chosen”. Royal hegemony under King Bhumibol is a man-made phenomenon that has been developed over seven decades and led Thailand’s political economy to the landscape everyone hardly imagined when the Second World War ended in 1945.

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

On the one hand, the military junta can achieve economic and social progress if it dares to reduce military budgets, rationalise the bureaucracy, and allow more political and ideological competition to arise. On the other hand, the civilian government that can pull off both economic and social stability is the one that reconciles the Bangkok middle class with rural voters and the conventional technocrats with growth-enhancing sympathisers, while standing tall for radical redistributive measures.

Without these actions against their own will and interests, Thailand 10.0 is poised to undergo frequent regime swings, the alternation between a government of peaceful stagnation and another of growth-led turmoil.

EOM