An “unnecessary bloodbath” or sufficiency economy?

11 10 2009

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A few days ago The Nation (9 October 2009: “Academic warns of ‘bloodbath'”) reported on a speech made by former Chiang Mai academic Nidhi Eowsriwong. A well-known historian, Nidhi was one of those associated with Midnight University and is often considered to take a radical political position. In fact, though, his position is a mix of classically conservative ideas about the organic growth of society and liberal ideas about political organization. It is not necessarily paradoxical that this perspective leads him to views that contradict those of authoritarian elites.

He warns that “a chronic social division could eventually lead to a clash and bloodbath if no attempts were made to avert it.” He believes that the division is deep-rooted and may even be seen as dating to changes under King Chulalongkorn, which saw an “unbalanced society” emerge.

Nidhi considers that the “on-going social division does not involve only the elite, the middle class and the grassroots, as in the past, but also a large portion of the lowest group that has become a lower middle class both in the rural and urban areas.” He worries that the latter group wants “more participation in public policy-making” but that their demands for political equality and participation “will cause further stress in society” as he has doubts the “the middle class will be able to accept it…”. The historian believes that a failure to accommodate  the demands will mean a “terrifying spectre” of “unnecessary and unreasonable bloodshed.”

Nidhi asks: “Are we going to prevent that from happening? Thai people will kill each other unreasonably. What [is] to be done now is to reduce factors that can lead to bloodbath in the short and long terms…”. He feels that the way out of this is, in the short term, to develop a “stronger system of political scrutiny to give the people more power to scrutinise politicians, in addition to allowing more freedom of expression.” In the longer term, Nidhi said a “genuine rule of law and a welfare state should be established to provide security for the lower middle-class people.” Interestingly, Nidhi also “expressed opposition against issuing a law to regulate public gatherings.”

Pisit Lee-ahtham, formerly a deputy finance minister, agreed that “the government should spend more money on social projects in order to build up security for people in the middle and lower tiers of society.”

As mentioned in an earlier post, this position indicates a royalist strategy for addressing the deep issues confronting Thai society and politics that is not absolutely reactionary. That is, it is not a call for “unity” based on mythical ideas about Thainess and the monarchy and nor is it a call for the use of repression and blunt force. This is not to assert that Nidhi is a royalist; it makes good political sense for liberals to support this position.

A different take, more politically conservative, was provided by Visanu Krua-ngam, a former secretary-general to the Cabinet. Visanu once served Thaksin Shinawatra, but jumped ship and went over to the military side for the 2006 coup and espoused royalist political positions. He claimed “Thai society should adopt His Majesty the King’s philosophy of sufficiency economy to maintain social equilibrium.” He said that this approach would mean “There should be no extremes, no surplus and no shortage.” And he added that the “philosophy must be adopted in a reasonable way…”.

Both perspectives represent a further discussion of “moderate” approaches to politics. They indicate a recognition that repression seems incapable of overcoming the political problems of recent years and that more radical alternatives might flow from uncontrolled political competition.

These are important discussions as more liberal alternatives to repression and authoritarianism are proposed. While PPT’s header indicates two alternatives, this is not the case. These discussions are a recognition that more radical, grassroots-based, republican and vaguely leftist alternatives have taken root. The elite is being warned: compromise or it risks being pushed aside.

Inequality, welfare and the politics of maintaining political control and not mentioning the obscenely wealthy royals

14 09 2009

PPT knows this is a long post. However, because it is an important issue, we are editing, updating and re-posting. This post deals with the first indication of a royalist strategy for addressing the deep issues confronting Thai society and politics that is not absolutely reactionary. That is, it is not a call for “unity” based on mythical ideas about Thainess and the monarchy and nor is it a call for the use of repression and blunt force.

Our updates are at the end of the post.

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For all the conflict in recent years, it is notable that Thailand’s public debate on the role of the state and welfare has developed and polarized. It has the potential to become more extreme. Recall that many of the PAD’s middle-class support was drawn by Sondhi Limthongkul’s view that a middle-class revolution against Thaksin and his regime who he identified as milking the middle class to buy support from those he identified as uneducated rural voters. When Thaksin introduced his 30 baht scheme there was a tiny group of doctors that opposed the scheme as “socialism” and medical practitioners have been in the PAD vanguard.

In a report in The Nation (13 September 2009: “Think-tank calls for welfare state”) it is said that the Thailand Development Research Institute (TDRI) has proposed “transforming the country into a welfare state.” This is remarkable for TDRI has generally been broadly neo-classical/neo-liberal in its approach to social and economic issues. Its former director was a minister in the military-royalist government led by Privy Councilor General Surayud Chulanont and its current director has worked closely with the World Bank.

Calls for a welfare state have been made in the recent past – from Jon Ungpakorn and from TDRI-associated Ammar Siamwalla. They didn’t get a great deal of support or attention. So why is TDRI proposing a welfare state now? According to the report, the “think-tank” is proposing a “survival strategy” that offers a way out of “the current economic and political distress by that would help bridge opportunity and income disparity.” TDRI chairman Dr Nipon Poapongsakorn, speaking at a seminar organised by the Thai Journalist Association and the King Prachadhipok Institute (KPI), said the institute “believed this would address the root causes of the current political conflicts that have pushed the country to the brink.”

TDRI researchers had found that disparities in income and wealth were “the main cause of the ongoing political conflicts…”. Hence, a welfare state would be “the way out of the political crisis” by closing the “gap between the rich and the poor…”.

Research has long shown large income disparities and inequality in Thailand. TDRI says that the “current market economic system fails to bridge economic inequality and the state also adds salt to injuries for failing to provide equal opportunity for everyone to access financial credit, knowledge, natural resources because the state represents a large business conglomerate that monopolises businesses.” It says that “only a handful group of politicians and businessmen access to business privileges and benefit from the monopoly. The current tax structure does not help reduce assets and wealth concentration.”

It is said that “wealth concentration has a significant correlation to political power…” in the country. It is suggested that tycoons seek political power to “protect business interests and concessions.” Politicians in power “distort the market economy. This is the case especially in a country that lacks political stability.” Nipon argues that the “more assets they have the more the motivation for the businessmen to come to power…”.

Nipon also cited research attributed to “Somkiat Tangkitvanich, which found that in 2004, companies run by Shinawatra family provide 141 per cent better return than other companies. The research also found that companies having connections with ministers enjoy 18.5 per cent higher profit than other companies.”

In fact, these figures are not universally accepted and recent works suggest lesser figures (e.g. Pasuk and Baker’s new edition of Thaksin), although the trend is still seen.

Nipon argued that “a welfare state was the answer because the system could bring sustainable democracy.” Recognizing the potential for a backlash, he also pointed out that “extreme populist policies may trigger a coup or revolt by the rich because they would be hardest hit.” As would be expected from a KPI event, “populist policies bring about great public debt and a lack of fiscal transparency.”

PPT agrees that economic inequalities are a major problem in Thailand. While moves towards a well-organized welfare state would make a lot os sense, PPT has problems with the way the TDRI call is framed.

For a start, TDRI has been aware of these economic disparities for decades, but has done precious little until now to propose alternative ways of dealing with them. It has stuck with market-based ideas for a long time. TDRI also stresses politicians and business people-cum-politicians as being the problem. We can’t disagree that these people have regularly promoted their own interests. At the same time, it has to be acknowledged that the political system has been constructed in conservative ways that have encouraged corruption of various kinds. Indeed, the 2007 Constitution requires corruption (if there is ever to be an election).

We would be more likely to agree with TDRI if it didn’t ignore the wealthiest institution in the country. The monarchy sucks wealth and power into itself, with the Crown Property Bureau being so hugely wealthy that Forbes ranks it as world’s richest. Then there is the huge drain on public resources that we noted recently, which is continuing to rise. Just the Royal Household Bureau’s draw on public funds has almost doubled from 1,136,536,600 baht in 2002 to 2,086,310,000 baht in 2008.

Of course, institutions like TDRI and KPI are dominated by royalists. It is almost impossible to take KPI seriously – it has a history of King Prajadhipok, portraying his as the “father” of Thai democracy but has nothing on Thai democracy’s checkered path.

TDRI has become a bastion of royalists. A brief look at its board see the following royalists and “Prem-ists” listed: Kosit Panpiemras (served the royalis-military government), Chirayu Isarangkun Na Ayuthaya (Director-General, Crown Property Bureau), Juree Vichit-Vadakan (sufficiency economy proponent), Mechai Viravaidya (Chairman, Population and Community Development Association and married to a senior palace aide), Snoh Unakul (former Prem government economic guru and chair of the royal-controlled Siam Cement Foundation and on the board of a number of royal companies), Sumet Tantivejkul (Secretary-General, the main royal foundation, the Chaipattana Foundation), and so on. Actually, if one wanted to study wealth and power networks in Thailand, the board of TDRI might be one place to begin.

Finally, what is missing in this proposal is any account of how political power might be changed. In fact, the proposal rings hollow as an elite-based attempt to maintain their own political power. Don’t get us wrong; reforming economic policies and addressing welfare is worthy. However, when it is done to avoid thorough-going political reform it hardly ranks as a liberal proposal for reform.

Hopefully the debate doesn’t deteriorate as in the U.S. and that the issue of economic inequality can remain on the agenda in Thailand but linked firmly with political fairness, human rights and democratic development.

Update 1: The Bangkok Post (13 September 2009: “Welfare state key to future”) has a similar report to that in The Nation, reported above. However, there are a couple of additional points worthy of note.

TDRI research director Somkiat Tangkitvanich said “unfair income distribution among Thais had led to major political disruptions such as the Sept 19, 2006, coup which occurred because the government had tried to improve income distribution via extreme [sic] populist policies.” This is an interesting perspective and worthy of consideration. Somkiat is acknowledging that Thaksin’s approach to politics involved a basic change to policy. What is now being proposed is that the anti-Thaksin groups accept that they need to do something similar in political and policy terms. It acknowledges that royalists, conservatives and “the elite” need to compromise on economic issues if they are to maintain their political power.

KPI secretary-general Borwornsak Uwanno, who earlier broached this topic, but in a context of political illiberalism, said KPI “would help push forward the academics’ idea, by proposing it to the government and the parliament.” He added that he believed that “Thailand will go through a major change. If we’re not prepared, the situation could go the same way as it did in the May 1992 or the October 1973 uprisings…”. Maybe, except that he fears that his elite will lose their political control.

This “welfarist” position will allow for the political continuation of “Thai-style democracy” that royalists promote. When pressured politically, Thailand’s “royal liberals” seem to lose their liberalism in favour of royalism. But here they offer a way out that moves the focus to economic well-being but maintains political control. Singapore and China come to mind, and it is the long-term goal of Burmese generals.

But can the “royal liberals” win out? Recall that the king himself opposes welfare. Sufficiency economy is fundamentally anti-welfare and he has said before that he opposes social welfare because it makes people lazy.

Update 2: The Nation has an editorial (14 September 2009: “Idea of a welfare state is worth exploring”) has a different take on TDRI’s interest in the welfare state idea: “The TDRI is quite concerned about the growing tendency towards economic populism. The Thaksin government began this trend by offering handouts to the poor. Subsequent governments, including the current Abhisit government, have followed suit.”

And, beginning the nonsense that usually goes along with debates about welfare, states: “We support the concept of a welfare state. But further discussion is needed over how we can finance the welfare state. Most developed countries, with strong welfare protection, are facing unsustainable public debt.” Of course, this statement is not supported by the facts. What the editorialist means is that tax revenues need to increase. However, as noted in the editorial, at present, Thailand allocates just “2.8 per cent … of the gross domestic product … to welfare.”

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