Is Thailand Southeast Asia’s weak link?

Author: Peter Drysdale, Editor, East Asia Forum

Thailand is Southeast Asia’s second-biggest economy and has been one of its economic success stories over the past decade. The coup after the recent political standoff threatens not only to slash its recent 6.5 per cent growth rate but also trash the fragile foundations of its democracy.

While Indonesia is the region’s largest economy and the epicentre of the ASEAN polity and Singapore is its anchor in trade and financial intermediation with the global economy, Thailand’s entrenchment as the dynamic hub of regional production networks — in automobiles and other consumer durables — has become emblematic of the ASEAN Economic Community (AEC) enterprise and movement towards its conclusion through 2015.

To have Thailand falter at a time of ambitious integration is not good for the regional economy or ASEAN centrality in Asian affairs. Thailand has been a leading exponent of these integration efforts and is one country in ASEAN that is better-prepared than most to deal with greater intra-regional mobility of goods, services, capital and people consistently with the ambition of the AEC. Thailand is host to at least 1.7 million migrant workers from Myanmar. Myanmar is Southeast Asia’s new frontier, economically and politically, and Thailand benefits from the investment, construction and consumption boom just across its border. As cross-border transport and communication links with Myanmar improve, the opportunities for Thai firms appear boundless. The problems at home in Bangkok undermine both the Myanmar potential for Thailand and make Thailand a more difficult neighbour for Myanmar as that country seeks to throw off its militarily encumbered past.

Thailand’s economy is flexible and globally connected — a thriving centre of production networks that enhance regional productivity and efficiency. As ASEAN efforts at regionalising the market and production are more deeply entrenched, Thailand would have been positioned at the leading edge to take advantage of the regional opportunity. Not only do political troubles and the coup pose the usual issues of international investor confidence for Thailand itself, they also raise questions about the regime’s ability and commitment to follow through on the AEC undertaking.

This, then, is not just another in the cycle of Thailand’s routine military coups. It comes with heavy baggage for ASEAN and the region as a whole.

As Nich Farrelly points out in this week’s lead essay, and in a feature in the latest issue of East Asia Forum Quarterly, ‘Thailand has failed to build a stable consensus about how to distribute political and economic power. And powerful interests, including in the palace and the army, don’t respect electoral mandates … If things go badly wrong, Thailand — one of the most successful societies in Asia and comfortable with its positive international and regional standing — could topple from its perch’.

Farrelly notes that transitions of political power in the polities of Southeast Asia are all in varying degrees subject to the Thai risk.

The government of deposed former prime minister Thaksin Shinawatra, the older brother of former prime minister Yingluck, which held power from 2001 until the coup of 2006, Farrelly explains, represented an uncomfortable challenge to the old order of royal, military and bureaucratic authority.

Thaksin’s interpretation of Thai politics was of a confronting, take-no-prisoners-style, even if it was wildly popular. The army and the palace couldn’t accept the kudos that Thaksin accumulated, or the way ‘he so profitably blurred the boundaries between business and politics’.

Thaksin threatened to comprehensively totally rout those he defeated at the ballot box. The coup of 19 September 2006 was the response to his electoral success and the years since have witnessed the tough struggle to re-define Thai democracy.

The forces aligned with Thaksin still command enough support to win elections, as they did in the disputed election in February 2014 although, as Farrelly observes, neither side of the Thai political contest is without blemish in now denying the Thai people the chance to make their choice through a poll.

The nature of the Thai problem, Farrelly argues, is not atypical in the region. Elite interests in many Southeast Asian polities often hold fundamentally undemocratic perspectives. The born-to-rule and take-all-spoils culture remains deeply entrenched. This culture is not, of course, absent in the most mature democracies but democratic restraint is clearly not yet deeply ingrained in Thailand or other countries in the region.

Thailand faces what Farrelly calls ‘an awkward moment at the end of King Bhumibol Adulyadej’s reign, when ‘defence of the monarchy has become the over-riding concern’. There are parallels in the primacy of this one institution across the region: but Myanmar’s military, Malaysian ethno-elites and Indonesia’s plutocrats now all face the prospect of internet-inspired mobilisations, even insurrections, and looking up at Thailand’s quagmire with concern.

Is it too much to hope that Thailand’s military leaders, seeing clearly the threat to their country’s prosperity and social cohesion in the medium to long term, might be impelled to reach out across the divide to build consensus, democratically imposed? Hopefully it is not.

The good news is that, despite the enormous challenges, the entrenchment of democratic institutions and the persistence of a pluralistic culture in Indonesia (the latter ironically in part a legacy that is owed to pre-democracy’s President Suharto), and its strategic leadership in ASEAN, appear set to deliver a confidence-booster to electoral transition in Southeast Asia.

Peter Drysdale is Editor of the East Asia Forum.