a word on current troubles in Thailand

Bangkok in 1985

1985 is when I made my first visit, as an investor, to Thailand.  I stayed in the un-airconditioned wing of the Oriental Hotel in Bangkok, which seemed to me to have changed very little from the 1920s when Somerset Maughan wrote there.  It took 90 minutes for the hotel operator to get a telephone collection to the US so I could tell my family I had arrived.  I paid US$25 (?) a day for the use of a car and driver to visit companies.

reverence for the king

The most striking aspect of my trip, however, was that every office I came to had at least a corner devoted to pictures of the family of the king, Bhumipol Adulyadej, often surrounded by flowers or votive candles.  While not quite the same as early-morning devotees praying to the emperor on the grounds of the imperial palace in Tokyo, these shrines were evidence of the deep reverence and affection in which the Thai population hold their monarch.  Quite a difference from the US or UK.

This situation has allowed for a most unusual form of government in Thailand.  The country is a constitutional monarchy with a parliamentary democracy.  Change of government, however, has very often come through military coup (usually bloodless).

the elite

A typical career for a member of the political elite in Thailand would run as follows:  attendance at the Thai military officers college, a career in the armed forces, a move from the army to a top management position, and finally, if the individual were so inclined, a high place in the national government.

the ritual of coups

Change of government might occur through elections, but it could just as easily happen through a military coup.  Over the years, the latter course has been highly ritualized.

A group of serving armed forces officers, doubtless prompted by former mentors now in business or politics, would conclude that the sitting government had outlived its “use by” date.  The group would request an appointment with the king, explain the reasons for change and what the proposed new composition of government would be, and ask the monarch’s permission to go ahead with the coup.

The coup would proceed only if the king gave his approval.  Word of the king’s permission would be disseminated.  On the day scheduled for the coup, the military would make a show of force and the government would change–almost always quietly and peacefully.  Occasionally, there have been acts of violence during coups.  These have traditionally been occasions of national disgrace, discussed and rued for years afterward.

Coups invariably involved replacement of one faction of the military-based elite with another.

what has changed?

1.  As Thailand has shifted from agriculture to manufacturing, as the overall population has become more affluent, and as ordinary citizens have become more vocal about the privileges (and perceived corruption) of the traditional elite, they have wanted to have a greater voice in government.

2.  The king, now 82, has been ill.  A strong lèse majesté law prohibits any criticism of the royal family, but it is clear that people do not have the same strong reverential feeling for the king’s son and putative successor.

the catalyst

Thaksin Shinawatra, a former policeman and telecom entrepreneur from a wealthy family in Chang Mai, formed the Thai Rak Thai political party in 1998 and was swept into office as prime minister in a landslide victory in 2001.  Thaksin immediately began to strengthen his populist power base–and therefore to undermine the position of the traditional elite–with the introduction of universal health care, programs to eliminate rural poverty and an anti-corruption drive.

Thaksin was reelected in 2005 in another landslide.  He was deposed in a military coup the  following year and the TRT party disbanded, while he was on a trip abroad.  He returned to Thailand after his supporters won the subsequent election under the banner of the People’s Power Party, but has remained outside Thailand from mid-2008 on.  Thailand’s highest court dissolved the PPP in late 2008 and banned key leaders from politics for five years, effectively returning government to the traditional military elite.

Large amounts of Thaksin’s wealth have been seized by the government since, and he has been convicted of various crimes.

no easy answers

The military factions now in power–but previously being “disenfranchised” by Thaksin’s populism–do not want to relinquish the reins of government.  Nor do they want to lose for themselves or their families the “entitlement” to rule in the future.  These are the “yellow shirts.”  On the other hand, although not in Thailand, Thaksin remains a symbol for, and a financial supporter of, those who are demanding a greater political role for non-elite citizens.  These are the “red shirts.”

Confrontations between the two sides have begun to involve violence, which is very uncharacteristic of Thai politics.

Unfortunately for Thailand, the typical international investor’s conclusion will probably be something close to what mine is:  the political situation is too difficult to figure out but is crucial to the success of any Thai investment.  Therefore, unless for some reason you must have money in Thailand, stay away.

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