Bangkok, May 15, 2010

Goodbye to the Land of Smiles

Chatham House has produced a programme paper on Thailand, No Longer the Land of Smiles? It’s written by Marianna Brungs, who was based in Thailand as an Australian diplomat from 2005 to 2008.

Like most informed analysts of the Thai crisis, Brungs locates the heart of the problem in the country’s sharp political and economic inequalities:

The conflict has moved beyond the initial ‘colour-coded’ tension between yellow and red shirts. There is now a sharp divide between the conservative elites who have traditionally governed Thailand – palace, military, business – and those who view themselves as the underclass.

She also notes that while Thaksin is attempting to exploit popular demands for democracy for his own ends, this does not mean that the “red shirt” movement is purely Thaksin’s vehicle:

The former prime minister, Thaksin Shinawatra, and his associates played a key role in turning the urban and rural poor in Thailand into a political force. In the build-up to the recent violence, it seemed that the protest movement was progressing beyond Thaksin to emerge as the new face of democracy in Thailand, with the movement developing into an ideological struggle between the traditional elites, fighting to maintain their position and status, and a broader social movement rising from pro-Thaksin groupings. Thaksin, however, did not plan to disappear so quickly. He has continued to play a key role in the protest movement, and by focusing on his own agenda – regaining his assets and political power – has to some extent stymied the protest movement’s progress towards more inclusive democracy and greater equality.

But Thaksin cannot carry the full blame for the ongoing instability. By generally dismissing the real issues underlying the protest movement and the need for these to be addressed through genuine reforms, the traditional powers have exacerbated class divisions and provided ample political space for Thaksin and his associates to operate.

She points out that while he may initially have sought to “govern in a principled way”, Prime Minister Abhisit Vejjajiva is increasingly beholden to the military and the palace:

Abhisit’s continued power depends on his support base in the palace and military. He is likely to survive for now, if only because the palace and military elites believe there is no other viable alternative to lead the government and keep Thaksin out.

Looking at the economic impact of Thai political instability, Brungs notes that GDP growth has proven very resilient, despite the damage to the tourism sector. She suggests the economic problems created by the crisis will be more fundamental and longer-term:

The real economic cost of the ongoing political problems may instead be the missed opportunity to undertake the economic reforms necessary to enable Thailand to operate at its full economic potential. Economic analysts argue that Thailand should move up the value chain and rely more on domestic demand, with higher wages, higher input cost manufacturing and trade liberalisation to stimulate a competitive consumer market. Such economic reforms, however, require a strong government with political capital, and have not been possible over the past few years, given the inward focus of politics and the high turnover of political parties and leaders.

She also makes the point that Thailand’s increasing abandonment of democracy will have regional implications.:

For ASEAN members such as Laos and Vietnam, the instability and violence has demonstrated the flaws in a democratic system and made the Chinese model of state capitalism more attractive, strengthening the case of those arguing against opening-up the political system. Only Indonesia remains as a strong supporter of democracy in the region.

Like most observers of Thailand’s crisis, she is pessimistic about the future of the country in the absence of any willingness to reform among the elites:

The current forecast for Thailand appears fairly bleak – it is likely that there will be continuing instability, with periodic spikes of intense unrest and violence. How the situation can be resolved is also unclear. At this stage, there appears to be a deadlock – the traditional elites won the recent round and appear determined to hold onto power, but the UDD and Thaksin are not likely to give in. The question of succession and the role of the monarchy heighten the uncertainties.