The good news is that, for the first time since September 2006, when a military coup deposed the government of Thaksin Shinawatra, the country has a leadership whose legal and electoral legitimacy is acknowledged by a large majority of Thais. It is a government that decisively won a fairly contested election. It is also a government that has an opportunity to reduce, though perhaps not eliminate, the severe polarisation that has taken place in Thai society in the last decade — during Thaksin’s five years of government and in the five years of turmoil following his removal. To do that, the government led by the Pheu Thai Party of Prime Minister Yingluck Shinawatra, Thaksin’s younger sister, will have to implement the program of populist redistribution for which it has an electoral mandate. More importantly, it will also need to tackle Thailand’s long term underlying economic and social problems.
The latest issue of East Asia Forum Quarterly (EAFQ) addresses the challenges that now confront Thailand. They include economic problems, some of which result from the difficulties of financing the promises on which Pheu Thai was elected, but also the deeper issues of competitiveness arising from the country’s outdated educational system and its ageing population. There are also problems along the borders, especially the Cambodian border, and the very different problems of the Muslim-majority southern provinces bordering Malaysia. As the six-decade reign of the 84-year-old monarch, His Majesty King Bhumibol Adulyadej, approaches its end, there is also uncertainty and disagreement about the royal succession, about which the law stifles public discussion.
In this week’s lead essay, Peter Warr, editor of this issue of EAFQ, observes that, on the economic front, Thailand is caught in a middle income trap — stalled in its ambition to graduate from a middle income to a higher income (OECD level) economy.
Progress from middle-income to higher-income levels requires a different kind of policy reform from that which lifted Thailand from backwardness to modest, if unevenly distributed, wealth over the past thirty years. Trade and other market reforms in that period saw income growth spurred by the accumulation of physical capital and people lifted out of poverty as the share of low-skilled, labour-intensive manufacturing output rose. Escaping the middle income trap, as Warr says, requires ‘addressing a market failure that the private financial system cannot resolve: the undersupply of human capital. Human capital is a crucial input, created primarily by investment in education, broadly defined. But it differs from physical capital in that it does not provide the collateral that can ensure repayment of loans. Unlike physical assets, human beings can walk away. The private financial system is therefore unable to support investment in human capital. Individual families can and do invest heavily in the education of their own children, but because their resources are limited and because the recipient of the educational investment reaps only part of the returns it generates this is insufficient to prevent the overall underinvestment in human capital’.
This is where national policy is critical and a raft of complex institutional reforms have to kick in.
Among the reforms that Warr identifies as important are reforms to Thailand’s antiquated systems of primary and secondary education, the single greatest impediment to long-term economic progress in the country; reforms aimed at lifting the long-term productivity of Thailand’s masses of unskilled and semi-skilled workers; reform of the country’s regressive and inadequate tax system; and reform of governance systems aimed at reducing corruption. Thailand’s version of economic populism will waste public revenue, feed corruption, and divert attention from dealing with the sources of long-term improvements in human productivity.
Unless Thailand deals with these issues, as Warr says, ‘the jaws of the middle-income trap will surely remain closed’.
Peter Drysdale is the Editor of the East Asia Forum
The Thai intellectuals and the Thai masses have progressed exponentially in the last few years, yet Peter Warr not engage the main political issue – the cult of personality (New Mandala, December 21, 2011). Peter Warr’s framework of analysis fails to face the challenges head-on, and gets us nowhere by ignoring the fact that Thailand is moving toward North Korea’s cult of personality model – propaganda, lack of basic human rights, and coercing to worship the leader. In addition, he fails to see the two-level game of great powers’ geo-strategic interaction in the Asia Pacific region – international politics and Thai domestic politics. Ignoring social and political change in Thailand and lacking any insight into great powers politics, Peter Warr’s article thus perpetuates the underdevelopment in the scholarship of Southeast Asia politics.
Many prominent intellectuals such as Giles Ji Ungpakorn, Somsak Jeamteerasakul, Worachet Pakeerut, Thongchai Winichakul, Andrew Marshall, Andrew Walker, Robert Amsterdam, and Nattakorn Devakul, have voiced their concern about the lack of basic liberty in Thailand; yet, Peter Warr’s averts the attention away from the key issues important to the majority of Thai people. In an opinion piece written for the Asia Sentinel website, Giles Ji Ungpakorn “has discounted the prospects of a successful social and political reform, and has aligned himself with those who are calling for a social revolution to occur in Thailand. He has criticized King Bhumibol as someone who has never supported democracy, and holds the army, the elites and the king responsible for supporting the Thammasat University Massacre of 1976.” Thai politics has moved beyond Thaksin to the issue of abolishing slavery to become a society of truly free citizens similar to the U.S. Declaration of Independence. It reads: We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
Thailand has adopted the World Bank’s economic model for industrialization similar to those other countries under the United States’ sphere of influence such as South Korea, Indonesia, the Philippines. Peter Warr is unable to understand that those countries have gone through political liberalization that allowed them the ability to avoid the many crises Thailand is facing.
Failing to understand the linkage between the medical doctor turned political activist Tul Sitisomwong to the Japanese new religious movement Soka Gakkai that support Japanese political parties such as the Liberal Democratic Party, Peter Warr’s analysis is thus too simplistic. It is important to remember that the yellow shirt protestors led by Chamlong Srimuang closed down all three international airports in Thailand, literally cut Thailand off from outside contact. Differing from the Thai Buddhist, Santi Asoke monks, the logistic arms of the yellow shirts in the Thai airports that were closed down, are connected to the Japanese Soka Gakkai political Buddhism. In other words, Warr failed to see the continuity of Chamlong Srimuang to Tul Sitisomwong and Japan’s geo-strategic position in Thailand – closing down international airports.
Describing the events instead of explaining with history, strategic analysis, and political economy theoretical insights, Warr’s article lacks breadth and depth expected of cutting-edge academic analysis.