| | |
| ||
|
Normally, this left column is for the |
Thailand military coup: economic, tourism and political outlookDue to a lot of demand, here is a fairly quick & easy-reading article for foreigners to get a general grasp and assessment of what's happening in Thailand as regards the military coup on September 19, 2006, without going into too much detail for most people. From this article, most readers will understand why the coup won't disrupt business much at all, and in fact it is more likely to make Thailand a more stable and safe place for both tourism and business. To make a long story short: An extremely wealthy man (billionaire), Thaksin Shinawatra (pronounced Taksin Shinawat) basically bought his way into power by literally buying votes from the masses of poor and lowly educated people in the northern provinces, and then promoting populist policies to further cement support from these people. He created a political party from scratch just a year before the 2000 elections, pulling in mafiosos from other parties and other people on his money bandwagon. Once he had an outright majority in parliament, then he started eroding democracy itself with votes along party lines. (It's also how democratically elected governments in other parts of the world whereby one party has an absolute majority in Parliament and a tight-fisted party leader have converted democracy into essentially a dictatorship. The most notorious example is democratically elected Hitler, who started to seize power in the German poverty after World War 1, then had his party change the laws in parliament... Democracy doesn't work well in some conditions.) Thailand has a long history of democracy, going back to 1932, which is much longer than most countries in the world, so there is a long established culture for democracy. However, Thailand has switched back and forth between military rule, now 18 times since World War 2, with the last military government in 1991-1992. It was widely thought that was to be the last coup in history. After much work, a new constitution was finished in 1997 which created a democratic system of checks and balances, including restrictions in regard to changing parties. (However, the first elected government scheduled for the year 2000 was to put the final pieces into place, and nobody foresaw such a wealthy and autocratic magnate creating a new party at the last moments from people in other parties and coming to power.) Once his party was in power in parliament, their bloc vote started eroding the checks and balances system established by this practically virgin constitution. The result has been a developing conflict and rift in society. It is these two reasons: 1. the developing rift, and 2. the wanton erosion of checks and balances, which led to the popular coup. A fair poll a few days after the coup revealed that 84% of Thais approved of the coup, but practically everyone expects full democracy to be restored within a year. Thus, this is not the end of democracy, but rather a step towards the saving and reform of democracy. It has also made Thailand a MORE stable and peaceful place. It's abundantly clear that the military does not want to rule the country nor is there any one strongman asserting himself like this. Further, it would be entirely unacceptable in Thai society. Indeed, it is amazing that the military coup was even acceptable, given the extreme disdain of military governments for the last decade, and just shows how much the Thaksin government had gone too far. Thailand is a fairly homogenous culture and the Thai people are very gentle. This is not a country with deep ethnic divisions, but is fairly homogenous. Thai people value harmony and the avoidance of conflict more than most other cultures (which is often a frustration to businesspeople because problems are usually not solved quickly and efficiently by confrontation, but instead by cryptically pleasant manners, and the Thai language is replete with polite particles which are important in negotiations and successful management). It is one language which spans about 1800 km north-south by about 800 km east-west, plus the Thai language extends into southern China and the Lao language (Laos) is about 70% the same both spoken and written and the culture very similar. (Other bordering countries are distinctly different.) Violent street protests are nearly nonexistent here, with scuffles limited to a few people at a time and usually involving hired security henchmen along the periphery. There are not significant divisions in Thai society, as Thai people tend to be live-and-let-live, relatively nonjudgemental and very tolerant people. The Thai people are very hospitable to foreigners. This is very clear to people who travel around the world, and is part of what makes Thailand a favorite tourism destination, as well as a popular retirement place. Thais also assimilate foreign ideas and processes better than many other cultures, which is why Thailand is a relatively rich and modern country in the region. Thailand is the only country in the region (besides China and Japan) which was never colonized, and indeed Chinese immigrants and others were welcomed and assimilated into the status quo rather than fought, unlike many other places in the region, and despite being surrounded by 2 British colonies and 2 French colonies for a long time. The country is 700+ years old at approximately its current borders, minus encroachment by the British and French colonies which was never gotten back after those countries became independent. The current prime minister, who got rich in telecommunications but apparently made much of his riches by manipulation of stock in his own company and nominee shareholders (his maids, driver, etc.), is very pro-western and US educated (PhD in political science in Texas), but as the saying goes, "power corrupts, and absolute power corrupts absolutely". He was accustomed to getting things his way in business by using his money. He came into politics with this same attitude. It was a combination of his corrupt money means to erode the checks & balances system to put himself in power for the forseeable future, and the resultant divisions in Thai society (divide and conquer), which led to this crisis. Early this year, he sold his telecommunications company to a foreign entity (the Singapore state-supported telecoms firm Temasak). He made $ 2 billion, tax free, via offshore entites. Further research has raised a lot of questions about a lot of intertwined and convoluted offshore companies and nominees ... and all this has further contributed to the crisis. (In fact, after the Prime Minister started to have serious revolts in Thailand this year, the government started implementing rules to put an end to nominee shareholders, which has affected many other people. This occurred one month before the coup.) Due to an emerging rift in his own party early this year, he called new quick elections to get his chosen people back into the majority before the opposition could prepare. However, this short period also violated the law in various ways, but he had bought up the Election Commission top officials to look the other way (and several months later these officials subsequently went to prison for all this, about a month before the coup). The opposition boycotted the election, which was a drastic move. The king RARELY meddles in politics, but even the king stepped in by publicly asking the courts to obey the law and settle this matter. Only then did the courts rule the election unconstitutional, as it was, and then prosecute the officials. The king exercises ceremonial power, more or less, but has earned high respect in Thai society because in his young years he worked very hard in the field to improve the country, and his good judgement and advice. The king is not just an elite armchair intellectual operating in the upper strata of Thai society, but instead is a humble man who seemingly travelled much of his time mixing with the ordinary population working on development of the country. He has been king for 60 years, but he's getting old now at nearly age 80. There is nobody else in Thailand who has respect and moral leadership comparable to this king. Therefore, when the king at times diplomatically expressed concern about some things in general as regards the way democracy was eroding, the message should have been clear to the Prime Minister. While the Prime Minister has given some lip service to various matters, his actions have been otherwise, whereby the Prime Minister's ego and his being accustomed to getting everything his way with money led to this further face-off. Being in the capital, Bangkok, I don't know anyone who is for the Prime Minister's form of democracy and against the coup. It seems everyone is relieved that the coup happened. Nobody is happy about a military coup being the solution, and everyone expects it to be short-lived until democratic checks-and-balances can be re-established. It's clear that everyone, including the military, wants real democracy restored at the soonest feasible date. The military has said "2 weeks", but the constitution and system of checks & balances needs to be strengthened against anything like this happening again. International reactions have been condemning of the loss of democracy, though not supportive of the current Prime Minister in particular. The western countries in general want to discourage military coups anywhere in the world with official statements supporting democracy (especially the US in view of Iraq's conversion to democracy). Initially, Kofi Annan was quoted as saying "Over the past decade or so they have established a solid democracy and institutions under the leadership of the king. And I'm sure they will be able to restore that institution and go back to a democratic system as soon as possible." Nobody wants to say anything which would encourage a military coup anywhere else in the world.
The Thai currency, the baht, dropped 1.3% relative to the dollar right after the coup, but rebounded back up in the second day. The initial drop was seen largely as a knee-jerk reaction in the world before further analysis. The baht is pretty much normal.
Moody's affirms Thailand's credit ratings with stable outlook Moody's Investors Service has affirmed Thailand's ratings and stable outlook as the country's financial and external payments positions should be strong enough to withstand temporary disturbances caused by Tuesday's military coup. Moody views the September 19 coup as mainly a domestic political development reflecting tensions between the Thaksin administration, the army and the Bangkok elites, rather than as a financial development.
The conflicts and developing rift in Thai society have apparently been neutralized, as Thailand's salient sociopolitical rhetoric has practically disappeared after the coup, with no serious repercussions. There was one demonstration of only about 100 people against the military coup, but there were no demonstrations for the former Prime Minister or his party, Thai Rak Thai. They both appear to have virtually disappeared off the landscape, and with them the conflicts and rift.
The last remaining source of conflict has been in the 3 southernmost Muslim-majority provinces (out of 76) along the border with Malaysia. (All other provinces are Buddhist majority, and Thailand is over 90% Buddhist, and tolerant of all religions.) To date, the terrorism in Thailand has been restricted to within those 3 provinces, except for a bomb in another southern city. To some degree, it's seen as an insurgency from northern Malaysia, and in fact Malay is the dominant language in much of those 3 provinces. However, there has always been a worry that the conflict would spread beyond these 3 provinces. PM Thaksin had refused to negotiate with the insurgents / terrorists, and in fact there were well publicized human rights abuses against detainees during this time, which had stirred up much debate on Thaksin's policy on the southern violence, with many seeing it as an endless cycle of conflict escalation (which is consistent with the general environment in Thailand under Thaksin). The leader of the coup, now-interim-Prime Minister Sonthi Boonyaratglin (you can just call him "Sonthi" or Gen. Sonthi), is in fact a Muslim himself and had tried to lead dialogue with the Muslim troublemakers in order to defuse that conflict. It is notable that the region has settled down considerably since Gen. Sonthi came to power, and it is expected that progress will be made in that area. Gen. Sonthi had often clashed with Thaksin over the issue of negotiations with the insurgents, including in the month preceding the coup. Indeed, a National Reconciliation Committee headed by a well respected former Prime Minister, Anand Panyarachun, had concluded with specific recommendations which PM Thaksin brushed aside and instead continued with the policy of confrontation. If you think this sounds like some other parts of the world, I agree. Someone must break the cycle or tit for tat. It seems to be on the mend in Thailand.
In the first week after the coup, daily tourist arrival statistics quickly returned to normal. Indeed, the soldiers are usually happy to pose for photos with tourists. No shots were fired during the coup, and it was completely bloodless.
See also my article on Thaksin Shinawatra and the September 2006 Military Coup which also briefly covers the history of Thaksin and contemporary Thai politics.
| ||||
|
Want to privately ask the Thailand Guru? Contact us.
Thailand Guru is proudly original, not a copycat. | |
|
 | |
