The latest update** from Krungthep Turakij is that Thaksin will appear on Channel 11’s Krong Satanakran program tonight. From the hints given by deputy PM Suranand (”เศรษฐกิจในบริบทใหม่” – the economy in a new context), it looks like Mr Thaksin will likely expand on the ideas the tried out on an earlier speech to senior Thai civil servants on 10 March.
I saw in this speech an interesting articulation for the future of the Thai economy, against the background of increased opposition to FTAs and EGAT privatization (and by extension globalization). The economic part of the speech begins with this framing of his opponents as having “old thinking, old action”:
ผมอยากจะเล่าให้ฟังถึงสถานการณ์การเมืองในปัจจุบัน … จุดของปัญหาในขณะนี้คือความขัดแย้งทางความคิดของคนกลุ่มหนึ่งเบื้องต้นเกิดจากการที่รัฐบาลเข้ามามีแนวคิด “คิดใหม่ ทำใหม่” กับมีคนกลุ่มหนึ่งที่ยังชอบ “คิดเก่า ทำเก่า”
So what do these conservative forces refuse to understand? Globalization and “modern” capitalism, he explains. He goes on to say that Thailand can no longer afford to stand still nor can it close itself down by refusing FTAs and foreign direct investment. By way of conclusion he offers a choice – a left turn is to join Cambodia, Laos or Burma while a right turn will take Thailand to Malaysia, Singapore, Taiwan and Japan. Finally,
วันนี้ถ้าเราเลี้ยวผิด เกิดอะไรขึ้น ถ้าเราเลี้ยวผิดคือว่า ความน่าเชื่อถือที่ว่าประเทศไทยกำลังก้าวเข้าสู่เศรษฐกิจยุคใหม่ จบ
What to make of all this, I wonder. Certainly this vision sounds like an economist’s dream, but I find his vision for lifting the poor out of poverty lacking substance. It seems like he’s saying its enough for the government to provide basic welfare – that will make poor people competitive enough to benefit from joining his ‘modern’ capitalism. I think we need to do more.
As with all visions, reality on the ground is very much different. Thaksin is fast losing the trust of many constituencies in society due to real and valid concerns about corruption and conflicts of interest. If he’s really going to get Thais to come on board to this grand vision, he needs to fix this crisis of confidence or risk splitting the country apart.
Tonight is must-see TV for Thaksin’s fans and foes alike.
** As poststaffer noted, Thaksin cancelled the appearance because of election law concerns.
Bookish 
I’m told it has been postponed. Election law concerns. What a shame!
Yes, I would like to see the other party’s reaction to this shifting of his economics strategy. He only devoted one paragraph to the grassroots – seems he’s really abandoning one track of the dual track model.
Also seems reality of the nation’s economy is further away from this rhetoric. Ammarn Siamwalla and some of the TDRI fellows have come out to dispell some assumptions about Thaksin’s economic record. In summary he says the momentum of the all the stimulus measures Thaksin put in in his first few years (lauded by Daniel Lian formerly of Morgan Stanley) is gone:
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it seems like he’s saying its enough for the government to provide basic welfare – that will make poor people competitive enough to benefit from joining his ‘modern’ capitalism. I think we need to do more.
I think the government should provide a basic safety net, but I do think the best way to lift the people out of poverty is through economic growth. Thailand has made great strides in recent years of bringing people out of poverty. I don’t think that many of the pro-poor policies have been that helpful as they could have been and that it is economic growth that has done it. Do a google search on “Peter Warr”. Here is short summary on one of papers:
“Sustained reduction of poverty incidence in Thailand has occurred over a period of several decades. This reduction in absolute poverty has occurred in spite of an increase in inequality over the same period. The rate of reduction of poverty has been strongly related to the rate of growth of GDP but the increase in inequality has not. The long-term growth of the Thai economy has been associated with a gradual opening to international trade and investment. The paper also reviews the prospects for reducing poverty by raising minimum wages and argues that poverty cannot be reduced effectively in this way.”
The stride with lifting people out of absolute poverty is offset by the increase in inequality. I don’t have the numbers, but I think Thailand has fared worse than the world average on this. China, with its booming coastal cities and still undeveloped interior, maybe another example.
You might remember this article I once linked to commenting on Tom’s blog. I’d also read this letter from Prachatai (via http://www.fringer.org) – it gave me some perspective krub.
Naphat:
I also don’t see all inequality as something which is bad. I am more concerned about absolute poverty not relative poverty.
Inequality can be dealt with in other ways, particularly through the tax system. I still see economic growth as a better way of lifting people out of poverty. If that has the effect of increasing income inequality then I am willing to live that. With that extra tax revenue the government has, the government should look at increasing education quality in the poorer areas of Thailand as opposed to spending large amounts of money funding schools for the Bangkok elite.
JW: Yes, education should be part of the answer. But I think there are also things the government can do without massive amounts of money – securing land rights, for example.
My thoughts on development I think are still forming – I’d like to research more on the topic. Initially I’m impressed with efforts at using market-based, non-public investment to really empower people instead of the top down the-government-will-handle-it approach. See organizations like the Omidyar Network and the phenonmenon of social entreprenuership.
But I think there are also things the government can do without massive amounts of money – securing land rights, for example.
I agree.
I would also like for the government to stop fixing the price of agricultural products, perhaps one item at a time for political reasons.
With the weight of decades of global experience with all manner of economic systems, it is a travesty that anyone could possibly believe that there is any better way to reduce poverty other than overall economic growth, or that there is any better way to achieve economic growth other than open markets and free trade. The fact is that capitalism works, and anyone who says otherwise is ignoring history.
The problem with Thaksin, however, is that while he talks capitalism, he walks something else entirely. Selling computer equipment to a public agency run by your father-in-law under a procurement contract you wrote yourself is NOT open competition in a free market. Neither is a government-protected monopoly on a privileged wireless frequency. Neither is allocating cash grants based on village size. Neither is a universal capitation system (ok, technically that’s just bad health care financing).
If a small business tries to grow in Thaksin’s Thailand, sooner or later it will run up against Thaksin or one of his cronies. We need financial services, we need telecoms, we need media, we need suppliers, we need clients, we need regulatory approvals. In all these areas, you run into brick walls where ultimately, some kind of bounty must be paid to Thaksin or his cronies. Ultimately, sooner or later, you must pay them off or stay small and under the radar.
These guys wear “capitalist” clothes, but underneath they are the same feudal barons and mafia bosses they always were. They want to keep gains to themselves, have no problems in stealing your ideas, and are prepared to offer crumbs to the poor in return for votes to hold on to their power.
More and more small businesspeople are realizing this, and it is causing a lot of resentment. As the grassroots development policies start falling apart, the resentment will spread to the countryside as well. That’s when the real trouble will begin – we haven’t seen nothin yet.
The saddest thing to see is how the opposition is veering off on a leftist tangent. It would be much better to see an opposition calling Thaksin what he is – a mafia boss in a board room – and start agitating for REAL free markets, REAL reform, and REAL grassroots development instead of a pile of half-baked vote-buying giveaways that are already starting to have their inevitable disasterous effects (hospitals closing, substandard medications, piling debt).
Regarding income inequality, we may not care, but the people on the lower end of the inequality usually are not to thrilled about it; and pointing out their absolute wealth increase is not terribly effective – you think the poor in the US are thankful they have TV’s and cars, or pissed off because the can’t afford all the crap they see on their TVs?
Any rational government would provide a sustainable safety net – defined by providing what most people would consider reasonable and worth paying for. The other half the story is providing opportunity – through education, and again, a free and open economy. These last two things are distressingly lacking in Thailand.
Finally, the rich need to get involved with social justice in a serious way. Andrew Carnegie’s “On Wealth” gives a cogent explanation of why this is in everyone’s interest. Bill Gates and Pierre Omidyear’s efforts, among others, are worthy descendants of Carnegie’s views. If Asian tycoons don’t realize this eventually, there’s going to be hell to pay around here. Again.
-h