Class Struggle in Thailand
Class Struggle in Thailand
Tim LaRocco: Class Struggle in Thailand
Bitter anger over the implementation of neoliberal policies in Thailand culminated in large scale street protests in the spring of 2010 against the central government in Bangkok. Thailand?s embrace and subsequent repudiation of these policies provides an acute example of how a state?s adherence to the ?Washington Consensus? serves to gradually expand the income gap between rich and poor, concentrating wealth in an ever-shrinking minority of elites.
The unprecedented demonstrations in the Thai capital were the manifestation of simmering angst among the rural segment of the population, which felt, and still feels, that it has been left behind by the political system. The protesters directed their resentment toward an undemocratic and illegitimate government that had rolled back many of the reforms employed by the administration of former Prime Minister Thaksin Shinawatra, who ruled from 2001 to 2006?reforms that curtailed the unjust social conditions pervading the country.
Thailand was the only country in Southeast Asia never to have been colonized by the West. During the Cold War era, as its neighbors plunged into civil wars (Vietnam), secret wars (Laos), genocide (Cambodia), or experienced brutal political repression (Indonesia, the Philippines, Burma/Myanmar), Thailand remained relatively stable. Enjoying a robust tourism industry, certain segments of Thai society began to prosper. Bangkok became one of the largest cities in Southeast Asia and a cosmopolitan world capital. But as the rich get richer, the poor get poorer, and Thailand was not immune to the ills of capitalism.
According to World Bank development indicators, as of 2000, 81 percent of the state?s wealth belonged to the top 30 percent of income earners. This is not as grievous a number as one might expect for a country in the Global South. However, the lowest 10 percent possessed a mere 2.8 percent of the wealth, and 28 percent lived on $2 or less per day. While one can make the case in other developing countries that the legacies of colonialism have contributed to explosions of poverty and inequality, this argument cannot be made in Thailand. The proliferation of poverty in Thailand, instead, is an indictment of Thai governments throughout the years that have, with the exception of Thaksin?s administration, failed to provide socioeconomic rights and safety nets to Thailand?s populace.
The rural hills in the north of the country remain poor, while the well-off and well-educated segment of society lives in Bangkok and its many comfortable suburbs. A New York Times reporter encapsulated this schism in an interview with a farmer from the northeastern province of Issan during the anti-government protests waged by the elites in Bangkok in the summer of 2008. ?The people of Issan are people, too,? said Damneun Pangsopha, a farmer who described how insulting it was to be looked down upon and treated as an ignorant nuisance by the Bangkok elite. ?That?s not democracy,? added another farmer from the rural provinces. ?They can?t win, so they try to find another way to fight.?
Dueling monetary policies have defined the country?s political economy since the Asian financial crisis of 1997. Neoliberal policies, instituted by the IMF after its intervention in the crisis, were met with approval by the elites of Bangkok, who stood to expand their wealth and avoid the withdrawal of foreign capital as a result. But the IMF?s intervention in Thailand only augmented the crisis. The structural adjustment package offered by the IMF required Thailand to adhere to the principles that underscore neoliberalism: privatization, deregulation, and trade liberalization. The Thai government accepted these conditions, despite the fact that its having followed the IMF?s previous recommendation of removing restrictions on international capital flows was a major factor in the 1997 collapse. Richard Higgott accurately prophesized that ?the political manifestations of [the crisis] will linger long after the necessary reforms have been introduced.? The austerity measures forced upon Thailand?bank closures, spending cuts, and staggering raises to interest rates?signaled to creditors that the Thai economy was only going to get worse. Improvements to the country?s health-care and education systems were abandoned, and industrial manufacturing plummeted. The official unemployment rate shot up from 1.5 per cent in 1997 to 4.4 percent in 1998.
The rural poor of Thailand celebrated when Thaksin reversed these policies after he was inaugurated in 2001. Thaksin was no ardent socialist?in fact, he gave generous contracts to huge corporations, including the country?s largest agribusiness, Charoen Pokphand Foods, and set about privatizing many industries. But Thaksin, a former telecom billionaire, also implemented a set of populist reforms that would later be dubbed ?Thaksinomics.? One of these hallmark policies was a debt-forgiveness program for farmers; another was Thaksin?s order that state-owned banks issue loans to small businesses at remarkably low interest rates, sometimes as little as 3.5 percent. A Time magazine online story in 2003 captured the success of Thaksinomics:
In the farming town of Bahn Rong Kong Khao, near the city of Chiang Mai in the country?s north, the government?s $2.3 billion Village Fund program, a microlending scheme, is a mini miracle, say residents. Narong Fongkraew, 50, who grows rice and chilies on his small farm, credits the Village Fund with saving not just his farm but the whole community. ?After 1997, banks stopped lending to us and some people were forced to borrow from moneylenders who charged high rates of interest,? he says. Recently, Narong borrowed $475 from the Village Fund at a very low rate and used it to hire laborers to help him work his fields. Increased labor led to a greater crop yield, and this year, for the first time in six years, he earned enough to begin paying back his creditors. ?I came very close to losing my land,? he says. ?But now I think I will be free of debt within five years.? And Narong is not alone: nationwide, poverty levels have dropped almost 4% since Thaksin?s programs began in early 2001. Farm incomes rose 11% last year and more than 20% in the first half of this year.
Not only was Thailand able to repay its debt to the IMF, but it did so two years ahead of schedule. After watching its economy retract in the wake of the financial crisis, annual GDP growth rose from 1.9 percent in 2001 to 5.3 percent in 2002. The Thaksin administration also had success with its ?One Tambon One Product? (OTOP) program, modeled on the ?One Village One Product? program instituted by Japan in the 1980s. OTOP provided an economic stimulus for rural enterprises, encouraging them to develop commodities for which their tambon (village) had a comparative advantage, thus facilitating trade with other tambons and boosting small businesses.
Thaksin reinforced small-scale development with macroeconomic planning. The ?developmental state? economic model, elucidated by economist Robert Pollin, was designed to support smaller initiatives to drive the country?s economic growth, and it met with early success. The state began subsidizing fuel to combat rising oil prices in 2004, and shortly thereafter directed the state-owned Electricity Generating Authority of Thailand (EGAT) to begin lowering tariffs in an effort to increase consumption in poor, rural areas. Additionally, stimulus money was apportioned to finance the development of the country?s infrastructure, including $10 billion in improvements to the national railway and the opening of Suvarnabhumi International Airport in Bangkok.
These gains were thrown into questions following the 2006 coup and consequent political unrest, which has shaped the country in the five years that followed. The grim mood surrounding the growing Thai class divide?especially following the demonstrations against the pro-Thaksin government in 2008 by the People?s Alliance for Democracy (PAD), or ?Yellow Shirts??was captured in Asian Survey.
Thailand is currently facing a political crisis without precedent, with the country increasingly divided by political disagreements and social polarization. Anti-Thaksin and pro-Thaksin groups are engaged in a stand-off and are prepared for violence. The causes of the crisis are many, but at the heart of the problem lies the urban-rural divide. Although the judicial branch has stepped up its efforts to discharge the conflict through legal means, the populace has apparently found it impossible to wait or accept the rulings.
In an eloquent piece in the New York Times last year, columnist Thomas Fuller wrote:
The Thailand of today is not quite the France of 1789?there is no history of major tensions between rich and poor here, and most of the country is peaceful despite the noisy protests. But more than ever Thailand?s underprivileged are less inclined to quietly accept their station in life as past generations did and are voicing anger about wide disparities in wealth, about shakedowns by the police and what they see as the longstanding condescension in Bangkok toward people who speak provincial dialects.
This divide persists to the present day, and was played out in the general elections on July 3 pitting Thaksin?s sister, Yingluck Shinawatra, against the establishment Democrat Party led by Prime Minister Abhisit Vejjajiva. Against a backdrop of popular discontent and social strife, Yingluck was swept into office on a wave of support from the poor, rural Thai majority. The election results are a clear indication that the lower classes of the country have been given a renewed voice in the political process, and that they intend to maintain an active role in how the nation is governed.
The results will doubtless unsettle the Bangkok political establishment of royalists, socialites, and members of the military, traditionally Democrat Party supporters. Meanwhile, Prime Minister Abhisit Vejjajiva?s cohort demands that Thaksin, should he return to the country after nearly three years in exile in Dubai, serve the two-year prison sentence he was given after being convicted in absentia in 2008 for ?conflicts of interest? (read: corruption and graft). As prime minister, Yingluck could commute her brother?s sentence, enabling Thaksin to return to Thailand and, in all likelihood, serve a behind-the-scenes role in the new government.
The conflict in Thailand, still playing itself out, is about much more than partisan politics. It is a class struggle, and one that represents a shift in the way Thailand is perceived in the international community.
