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Wednesday, May 26, 2010

Thailand is on the brink

Special to The Japan Times

HONG KONG — Graphic pictures from Bangkok last week told the grim story of bloodshed, death and destruction, of democracy challenged and mortally wounded. But they cannot convey the smell of burning, the terror of chaos in the center of a supposedly civilized modern capital city, or the human, moral and political decay that have brought prospering, smiling Thailand to the brink of anarchy.

Even after the Red Shirt commanders surrendered and Bangkok's central business and commercial area was cleared of protesters, mayhem continued. Thailand's stock exchange was attacked. One of Asia's biggest shopping centers was set on fire. A cinema was burned to the ground; a leading power company, 17 branches of five banks and Tesco Lotus stores were all attacked. In some cases rioters set the fires and then prevented fire crews from dealing with them.

And they proclaimed to the world that all they wanted was dissolution of Parliament so that Thailand could vote and the people's democratic voice be heard again!

In speeches on YouTube, rebel leaders threatened: "If you seize power from us, then we'll burn the whole country down. Burn it, burn everything, my brothers — Guarantee: Bangkok will turn into a sea of flames. Those of you who live in the country, it's OK if you cannot join us. If anything happens, just gather at your provincial or city halls. No need to wait for the order. Burn your city halls down to the ground."

Now Thailand's Prime Minister Abhisit Vejjajiva has to show that he is a real leader who can take difficult decisions for a country that has become almost ungovernable. Poor Abhisit has been subjected to many canards, not only from the Red Shirts but also from the international press and diplomats. At the height of the bloodshed the BBC correspondent was talking of Abhisit's "military backed government" and claiming that no one had elected him to power. Abhisit was elected as prime minister by a vote in Parliament after previous leaders were disqualified by the courts. That is democracy at work, however much distorted by corruption, whether by leaders or judges.

He remains prime minister through his majority in Parliament, all of whose members were elected, however flawed the election. Who is to say that the next election will be any better or cleaner, especially given the corrupt record of almost all Thai elections and now the dreadful precedent of mob rule, first by the Yellow Shirts proclaiming the banner of monarchy, now by the Red Shirts.

As to "military backed government," Abhisit could respond that Thailand has a "military backed government" just as the United States, the United Kingdom, Japan or China has — where the security forces are ready to prevent the breakdown of law and order or mob rule.

Would U.S. President Barack Obama have stood by while disgruntled Americans of whatever persuasion took over Times Square or the Rockefeller Center? How would Prime Minister Yukio Hatoyama have reacted if Okinawan protesters against U.S. bases sat in in the Ginza and stopped 65,000 people from going to work for two months while roving rebels surrounded the Diet, threatened to lynch the prime minister and threw blood at his official residence?

On reflection Abhisit may think that his mistake was to treat the Red Shirt protest as about democracy, or elections or things that could be resolved by political discussion when it was really an attempted coup, just as the Yellow Shirt protest was.

Ousted Prime Minister Thaksin Shinawatra lurks far away in exile but always close. His billions helped to bankroll the Red Shirts and his video speeches inflamed their passions, but the demonstration took on its own life fomented by the entry of numbers of the Bangkok dispossessed and the gang leaders who operate from the vast Klong Toei slum. Thaksin popped up to talk to Reuters news agency "from an undisclosed location" and warned that the crackdown on the Red Shirts could lead to guerrilla warfare. Was he trying to spark that flame?

The two-month occupation of the commercial heart of Bangkok has set Thailand back economically. More than 80 people were killed, 400 wounded and damage is estimated between 70-100 billion baht ($2 billion to $3 billion).

Respected commentators are already asking how safe Thailand really is: Has peace really been restored; will guerrilla struggles erupt to take the place of open confrontation; who is in charge of the country, the politicians or the armed forces; is it on the Burma Road to military dictatorship and failed state; how far away is anarchy?

Professor Nouriel Roubini's economic Web site asked last week whether Thaksin could become Thailand's Mao Zedong in an extended class struggle that a leading Red Shirt predicted before being taken into custody. Another commentator compared Thaksin to an Osama bin Laden who prefers to live in five star luxury rather than caves. Thaksin was seen shopping at Louis Vuitton in Paris in the days before the government recaptured the center of Bangkok.

Thailand's Finance Minister Korn Chatikavanij moved quickly to repair the international damage. He spoke in Tokyo on Friday at a business conference and at the foreign correspondents' club. He admitted upfront that he was not offering a "welcome back to the 'Land of Smiles,' let's go shopping and invest in Thailand speech" because recent events had damaged both the economy and Thailand's image.

He provided figures denying claims that the Red Shirt revolt was a product of increasing inequality: "We have made great progress in reducing those below the poverty line from 45 percent of the population 25 years ago to just under 9 percent today," the minister said. He pointed out that 25 years ago the top 20 percent earned 12.8 times the bottom 20 percent; today the top 20 percent earn 12.7 times as much as the bottom 20 percent — "effectively no change at all," added Korn.

The minister noted that there had been a big shift since the last crisis in 1997 between rural and urban areas. The agricultural work force has declined from 45 percent to 39 percent of the working population, though this is still means 15 million people work in agriculture. At the same time, Korn said, "the working population in the unskilled labor sector has risen from 24 to 29 percent, so essentially this means that millions of rural poor have now become urban poor."

The highlight facts that Korn gave are not disputed. The World Bank says that the numbers of Thailand's poor declined from 18.4 million in 1990 to 6.1 million in 2006. In addition, 97 percent of Thais now have access to clean water and sanitation — a great achievement.

Historians have noted that from the time of the French Revolution it is not the impoverished who bring about revolutions — because the really poor have their noses in the dirt trying to eke a living — but people who have gained some income and hope, enough to raise their eyes and see the privileged few raking in millions with little sweat of their brows.

Another factor in Thailand is the regional disparity. The World Bank notes that Bangkok is becoming a modern metropolis, rivaling Singapore as an aviation hub. True, Bangkok lacks the clean and green edge that Singapore offers and is much poorer, but it is becoming a great global city. That prosperity has come at a price. The World Bank notes: "Economic activities in Bangkok and the metropolitan area account for almost 60 percent of the national gross domestic product, though it has under 20 percent of the nation's population."

One of Thailand's real problems is that it may become ungovernable since the major institutions of state are tarnished by corruption. Roubini's analyst judged that Thailand "is at an impasse short of a military coup." But the military seized its chance when it threw Thaksin out and it miffed it, proving itself incapable of running the complex country that Thailand has become. This is no Myanmar, but a rich country with GDP 10 times that of Myanmar and per capita income of $8,100, almost eight times Myanmar's and higher than China's ($6,600 on the same purchasing power parity basis.)

For proof of Thailand's potential, you only have to look at the economic numbers for the first quarter of 2010 issued Monday. They show that growth of gross domestic product rose a massive 12 percent year on year. It is perhaps proof too that the Red protests were sparked by fear that Abhisit was doing too well and might get an electoral boost that could win him the election. It was also convenient that just before the Reds took to the streets, Thailand's supreme court had sequestered $1.4 billion of Thaksin's fortune, claiming that it was obtained illegally.

Thailand has a growing industrial base, especially in cars, parts and electronics, an array of rice and agricultural products for export, and a flourishing tourist industry. It also leads the world in medical tourism. But as a U.K.-size country of 65 million people, it faces economic challenges from bigger neighbor China, especially in sensitive areas like the size of the market and export prices, which face pressures from China's linking its currency to the dollar.

Its biggest challenge is internal, the pervasive corruption and the regional differences, not just between Bangkok and the vocal northeast home of the Red Shirts, but also the poor north, the Muslim south (where Thaksin and the security forces were responsible for more deaths than occurred in Bangkok this year) and between rich and poor in the capital.

To Abhisit's credit, he is seen as the cleanest Thai politician in a blue moon. He is also probably the most intelligent and thoughtful leader that Thailand has seen for a generation. His government has begun measures to address the grievances of poorer people through farm support, reducing the grip of moneylenders and combating corruption, all of which have been put to Parliament — an institution that Thaksin ignored except when he needed it as a rubber stamp.

Abhisit dithered and failed to clear out the protesters early on. Now he has to rediscover his backbone and walk the fine line between being a strong leader and one who listens and tries to ameliorate the genuine grievances of his people. At some point soon he needs his own election victory to show that he is his own man, not a puppet of the elite.

Kevin Rafferty was editor in chief of Business Day in Thailand.

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