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Thailand

Political and Economic Lessons From Democratic Transitions

Author: Joshua Kurlantzick, Senior Fellow for Southeast Asia
June 18, 2013

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This preview highlights the main points of the Thailand chapter from Pathways to Freedom: Political and Economic Lessons From Democratic Transitions, a publication of the Civil Society, Markets, and Democracy Initiative. For previews of other chapters, please see the Table of Contents.

Overview

From the early 1990s to the early 2000s, Thailand seemed to be a textbook example of cautious but thoughtful democratization. A perfect storm of factors derailed its progress, however, slowing its economic growth, and setting the stage for domestic conflict. Today, the country faces political paralysis and poor prospects for long-term prosperity.

After absolute monarchy ended in 1932, Thailand's military essentially ruled for six decades. Allied with business elites and the king, who retained enormous power behind a constitutional facade, military rulers maintained control over media and politics but generally allowed technocrats and the central bank to set economic policy.

Pragmatic macroeconomic policies, abundant resources, and foreign direct investment produced robust growth starting in the late 1950s. Annual growth averaged 8.4 percent between 1960 and 1970. Tourism took off. Thailand also benefited from billions in American civilian and military assistance. By the early 1970s, a rising urban middle class began to agitate for greater political say and in 1973 and 1976, antimilitary demonstrations forced a slight political opening. In the early 1990s, the military's seizure of power from a civilian government sparked massive demonstrations. After the king reprimanded both sides on television in May 1992, the military ceded control and street violence ceased.

With this reversion to civilian rule, Thailand seemed poised for democratic consolidation. It held free and fair national elections. Civil society continued to flourish, and in 1997, Thailand passed a groundbreaking constitution. In retrospect, this was the high-water mark for its democratic transition. The Asian financial crisis hit in 1997, posing a serious challenge to the country. Most Thais blamed the elite-backed Democrat Party, in power at the time, for the meltdown. This provided an opportunity for Thaksin Shinawatra, a billionaire telecommunications tycoon, to mount a challenge.

Presenting himself as a nonpartisan, executive leader, Thaksin won the 2001 election. His populist platform, including universal health care and loans to low-income Thais, gave the rural poor their first real hope in democracy. Thaksin's victory shattered the decades-old nexus of economic and political control among business leaders, the military, and the palace. He won reelection handily in 2005.

Thailand's nascent political institutions were too weak to control Thaksin's ambitions and he used his power to neuter the media, undermine judicial independence, and punish opponents. The Bangkok elite and middle class grew frustrated with this "electoral autocracy." In a rejection of democratic forms, they turned to street demonstrations and agitated for a coup, which came in September 2006.

A series of reversals ensued. A pro-Thaksin party won elections in 2007 (Thaksin himself was in exile avoiding corruption charges). Elites and the middle classes then reinstalled a Democrat government in 2008. This prompted the working class to mount its own protests, which, in 2010, culminated in the bloodiest violence Bangkok had experienced in decades.

In the July 2011 election, despite government repression and military warnings to support the Democrats, a pro-Thaksin party led by his sister won a parliamentary majority again. The result has been paralysis, democratic decline, and a marked deterioration of rights and liberties.

Pathways to Freedom: Political and Economic Lessons From Democratic Transitions, a new book from the Council on Foreign Relations, explores Thailand's progress and challenges in six areas of economic, political, and social development.

Socioeconomic Exclusion and Inclusion

During the absolute monarchy and postwar economic boom, Thai society maintained a rigid hierarchy. Elites encouraged the poor to defer to better-educated and wealthier Thais. Budget surpluses during the boom decades were not used to broaden growth and make politics more inclusive. Instead, they went to military spending, politicians' pet projects, and infrastructure in greater Bangkok and tourist destinations. Despite some attention to average Thais' concerns, governments ignored priorities such as health care, secondary education, and internet access.

By the 1990s, Bangkok was more than ten times wealthier than some poorer provinces. The continued centralization of economic and political planning in Bangkok only served to exacerbate urban-rural divisions. Although Bangkok suffered during the Asian financial crisis, income dropped more sharply elsewhere. Migrants from rural families working in Bangkok generally lost their jobs first when the crisis hit. The deteriorating currency also made farm machinery pricier. Today, nearly 90 percent of Thailand's poor live in rural areas, and this socioeconomic exclusion has turned to anger.

Economic Structure and Policies

Beginning in the 1960s, Thailand's favorable tax and wage policies made it a regional manufacturing hub and foreign investment destination. Still, while the country's technocrats delivered decades of growth, creating a truly competitive economy was not a priority. The Asian financial crisis marked the end of the boom. Undercapitalized banks failed, construction dried up, unemployment rose, and exports fell. After the 2001 election, the Thaksin government worked to boost domestic consumer spending and broaden development beyond Bangkok, nearly doubling the state's debt in the process. But Thaksin also pursued business-friendly measures such as free-trade deals.

Poverty has fallen since the 1997 crisis, though Thailand's recent political turmoil and the global recession have reduced growth. Foreign investment, tourism, and low-end manufacturing will, for a time, sustain Thailand's economy. But its political instability, poor education system, and inability to upgrade the value of its exports will likely prevent it from escaping the middle-income trap.

Civil Society and Media

For much of the Cold War, Thailand's civil society and media remained small and constrained. Beginning in the late 1980s, the media's liberalization—along with technology such as pagers and mobile phones—brought news to a wider swath of the population. However, the media's focus has remained on issues most relevant to urbanites. Coverage of the north and northeast, home to a majority of Thais, or the deep south, home to a deadly insurgency, has been scant.

The media's liberalization has not necessarily been a net positive for Thailand's democratic consolidation. Thaksin's rise and the 2006 coup spawned more-partisan media outlets, often funded by one or two tycoons. As class divisions have hardened, media have abandoned their neutrality and public trust in the press has fallen. By the late 2000s, Thai media had turned into an echo chamber.

Legal System and Rule of Law

For decades, Thailand's rule of law was largely weak and politicized, even in the more democratic 1990s. The 1997 constitution attempted to strengthen the rule of law and provide checks and balances. But it did not address the continuing, largely unwritten role of the king and his advisers, who remained a kind of "deep state."

Both Thaksin and the royalist elite weakened the rule of law. Thaksin undermined new institutions created by the constitution, pressured some judges and forced out others, and packed parliament's upper house with cronies. Instead of trying Thaksin's alleged crimes in court or changing the law, his opponents in the elite and middle classes fought him through street protests and other extra-constitutional means.

Thailand's weak rule of law has also produced a poor human-rights record. Outside pressure, notably from the Clinton administration, resulted in some improvements during the 1990s in human trafficking, religious freedoms, and treatment of refugees. But in the 2000s, the international community largely stood by as Thaksin and the 2006 coup-makers destroyed Thailand's democratic institutions. The Bush administration saw Thaksin as an important counterterrorism ally and then worried, mistakenly, that coming down hard after the coup would push Thailand into China's arms.

Government Structure and Division of Power

Thailand has struggled to place its military—long its predominant institution—under civilian control. Since the 1950s, the military has operated in alliance with the king, who is neither absolute monarch nor ceremonial figurehead. In the 1990s, the army appeared to finally leave politics, but in truth it never fully relinquished power. Thaksin then failed to assuage the military's concerns, instead trying to cut its budget and maneuver his allies into the senior ranks. Younger officers came to believe the military should never have stepped out of politics.

Thailand's other power center is the prime minister's office. The 1997 constitution unintentionally set the conditions for an autocratic executive. Aiming to create a more stable party system, the constitution made it harder for small, regional parties to win seats and for Bangkok politicians to keep rural voters splintered. This empowered the rural poor, and Thaksin recognized that he could triumph by appealing to them. In office, he used his unprecedented parliamentary majorities to destroy the country's still-young institutions. Many Thais looked to the king for mediation. But by bolstering his own power over the years, the king had weakened the development of independent institutions. And by the 2000s, he was too elderly, unwell, or partisan to play his traditional role.

Education and Demography

Thailand's postwar leaders appreciated the need for broad-based education. The government expanded primary education with curricula focusing on literacy, basic math and science, manual skills, and a nationalist ideology of obedience to the king. This approach made basic literacy nearly universal and created an effective workforce for low-end manufacturing. The economic boom of the 1960s and 1970s meant plenty of blue-collar work and little public pressure for higher education. Indeed, secondary education—and upgrading primary education with higher-value skills—were not priorities.

After the Asian financial crisis, many leaders and educators recognized that Thailand's educational system was falling behind in critical skills, including information technology, English, and entrepreneurship. Both the pro-Thaksin and Democrat parties proposed reform initiatives, but political conflict hindered progress. The failure to boost educational quality and transition to a higher-value economy threatens Thailand's economic competitiveness. And thanks to a successful family-planning program, Thailand's demographic transition has largely passed.

Conclusion

Thailand's civilian, royal, and military leaders made many shortsighted decisions. They failed to invest budget surpluses in education and in reducing inequality, privileged the Bangkok region over rural areas, did not create a truly constitutional monarchy with independent institutions, and pushed through a flawed 1997 constitution. The failure to fully tame the military, however, was perhaps the most critical misstep. Today, with slower growth, a fading monarch, partisan media, a meddling military, and political polarization, Thailand's most likely scenarios are continued political gridlock or civil war.

Additional Material

Thailand: Full Chapter Preview
Thailand Timeline
Further Reading


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