Thailand’s brittle democracy
Thailand may have a new prime minister but its issues remain the same - how to boost the economy while keeping peace within a deeply divided nation. Vaughan Yarwood looks at the challenges facing the newly elected Yingluck Shinawatra.
In August 2011, Thailand’s head of state, King Bhumibol Adulyadej, formally endorsed Yingluck Shinawatra as the country’s first female prime minister. Yingluck’s Pheu Thai party convincingly won July’s parliamentary election, but the politically inexperienced younger sister of the exiled former leader, Thaksin Shinawatra, faces formidable challenges as she attempts to heal deep divisions in Thai society and lay the foundations for long-term economic growth.
Pheu Thai won 265 of the 500 parliamentary seats, giving it an outright majority. However, its leaders chose to form a six-party coalition to strengthen the party’s chances of pushing through promised reforms and create political stability.
Yingluck’s cabinet appointments further reflect her apparent determination to follow a path of moderation and reconciliation. The 35-strong cabinet includes finance minister Thirachai Phuvanatnaranubala, who is the former head of the country’s Securities and Exchange Commission and so is known to the business community, and ex-army general Yuthasak Sasiprapha, who takes the defence portfolio. Yuthasak’s job will be to rebuild links with the military, which deposed Thaksin.
Yingluck was also careful not to promote to cabinet anyone from the “red shirt” protest movement that helped her into office. The movement is agitating for an inquiry into the previous government’s violent crackdown on its protests in Bangkok last year, in which more than 90 people died. Perceived favouritism would likely spark more street clashes between the red shirts and supporters of the defeated Democratic party.
During her campaign, Yingluck pledged to revive the populist policies of Thaksin, who is currently living in Dubai to avoid imprisonment for corruption. Opponents fear that the Yingluck is little more than a proxy for her brother, who they say wields the real power in the party. In this context, Pheu Thai’s suggestion of a general amnesty as a step towards national reconciliation is seen as a thinly veiled strategy to restore Thaksin into Thailand’s political life.
A question mark also hangs over the role of the army. It has vowed to respect the election outcome, but has a history of breaking promises not to intervene in the political process.
Thailand’s sharemarket and the country’s currency both rose after the election, on hopes that Pheu Thai’s majority and talk of reconciliation would bring stability. But business leaders are concerned that the Thai economy cannot afford the reforms announced by the new administration. There is also concern over inflation, which in May 2011 reached 4.2 per cent.
The Bank of Thailand’s assistant governor, Paiboon Kittisrikangwan, told Reuters that all political parties seemed to make costly election promises “without looking at the bigger picture – the long-term sustainable growth”.
Despite its export-driven economy performing well over the past year, with exports growing by 28 per cent, the country’s growth forecast is for a modest 3 to 5 per cent during 2011 – down from 7.8 per cent during 2010. This is largely due to concerns over the anticipated effect on exports of anti-inflation policies by central banks in export markets.
The director of Thailand’s Sasin Institute for Global Affairs, Dr Suvit Maesincee, suggests that healthy export receipts disguise a fundamental weakness in Thailand’s economic development.
“Thailand has lost many opportunities to raise national wealth, even as other countries have moved forward to adjust to the many changes facing the world. Not just economic changes, but other dimensions, whether it be environmental change, the problem of terrorism or new technological development, particularly the emergence of ‘green’ technology,” he told the Bangkok Post.
“Korea, Taiwan and Singapore once were in a similar position, but each was able to break through by developing from having manufacturing dependent on resource and production efficiency to becoming an innovation-driven economy.”
Suvit was also scathing of the country’s “dysfunctional political system”, saying it was beset by corruption and was at the apex of a bureaucratic system that did not reward hard work or ideas but relied on patronage.
Once the Asean Economic Community was formed in 2015, skilled workers from other countries in the region would arrive in Thailand, “and we will be their employees,” he said. “If we continue to procrastinate, we have less than five years before we become an economic colony for others.”
Potentially most damaging for Yingluck’s prospects is Suvit’s prediction of an increase in the sort of class warfare that saw bloody clashes on Bangkok streets 15 months ago.
“It is the middle class that pays taxes, but it is the lower class that benefits from populist policies. Resentment about the perceived injustice will build, as the middle class may see the government using their tax money to simply curry favour, rather than for the future development of the country.”
Profile of a leader
Yingluck Shinawatra is the fifth prime minister since her brother was deposed in 2006. Though a political novice, the 44-year-old is a successful businesswoman. She holds an MBA from Kentucky State University and until June 2011 was executive president, acting CEO and secretary of the family-owned property company SC Asset Corporation. She was previously managing director of AIS, the telecommunications company founded by her brother.
Yingluck’s election promises included reducing corporate tax from 30 to 20 per cent, raising the minimum wage, offering agricultural loans of up to 70 per cent of expected farmer income and providing free tablet computers and internet access to new schoolchildren. She also made a commitment to improving transport infrastructure in northern Thailand and making healthcare more affordable.
Images:
1. Yingluck Shinawatra on the campaign trail in July 2011. (From Flickr, sourced under a Creative Commons licence)
2. Red shirt protestors in 2010. (From Wikimedia, sourced under a Creative Commons licence)
3. Thailand's army has a long history of intervening in the political process. (Wikimedia)