THAILAND UNEASY ABOUT ECONOMIC FUTURE AFTER COUP

Analysis by Anil Netto

(IPS) PENANG, Malaysia -- As Thailand settles back to a normalcy of sorts after a dramatic military coup, attention is now shifting to the economic implications, underlying which is an uneasy conflict in values between the self-sufficiency championed by King Bhumibol Adulyadej and the gung-ho capitalism and consumerism espoused by ousted premier Thaksin Shinawatra.

Little is known about the economic orientation of the country's new military leaders who have never been involved in economic policy-making. Analysts say the leaders of the military junta, dubbed the Administrative Reform Council (ARC), will probably seek advice from technocrats, who will most likely place importance on restoring foreign investor confidence.

They are not likely to send out what might be interpreted as negative signals, says Jacques-chai Chomthongdi, a Bangkok-based economist with Focus on the Global South, an activist research group that critically analyses corporate-led globalization, neo-liberalism and militarization.

Thailand's $188 billion economy was already forecast to grow at its slowest pace in five years as a result of uncertainties caused by questions surrounding the legitimacy of Thaksin's rule and his populist measures.

"On the one hand, the generals would not want to exacerbate the declining confidence of foreign investors," Chomthongdi told IPS. "Thus, the overall approach to economic policies based on neo-liberalism will remain at least in the short and medium term." The junta would also would want to assure Thailand's main trading partners that they would comply with existing agreements and stick to the multilateral trading system.

On the other hand, they may feel they need to solve the economic problems that Thaksin has created. In particular, negotiations for the proposed Free Trade Agreement (FTA) between Thailand and the United States, seen as a controversial issue that undermined public confidence in his administration, will probably come under the spotlight.

The negotiations process was seen as undemocratic, and several academics and civil society groups including social movements have demanded that the process be reformed.

If the junta is serious about solving these problems, they need to approach trade policies differently, review existing agreements and suspend the FTA negotiations process until a more transparent and democratic negotiation process is put in place, stressed Chomthongdi. "As a trade campaigner, I would say that this is the chance for the ARC to show to the public that they genuinely aim to make a difference."

The junta has already begun an anti-corruption purge, detaining two former cabinet ministers. The army commander-in-chief, Gen. Sonthi Boonyaratglin, has confirmed the appointment of Auditor-General Jaruvan Maintaka and ordered her to focus on 14 cases of suspected government corruption already under probe.

Analysts say economic growth is likely to slow amidst uncertainty about the speed of political reforms, worries of instability and concerns over whether this would undermine investor confidence and hurt tourism.

Most Thais, however, appear relieved that the coup took place peacefully and smoothly, and life in Bangkok appears normal, though a bit more subdued. But if things remain quiet, tourists could return in droves in time for the year-end holidays.

More intriguing were the views of a Bangkok-based social anthropologist and author, who pointed to the shadow of King Bhumibol, who apparently blessed the coup.

The king, who has travelled extensively in remote areas of the country to see firsthand the impact of policies on the poor, is hugely revered in Thailand. His vision of self-sufficiency based on the eradication of greed is rooted in Buddhism and Thai culture. The sight of the king sitting down on the ground, chatting with villagers about their livelihood is familiar among many Thais, winning him many admirers. Guided by a philosophy of economic self-reliance, and emphasising agrarian reform, the king has a famous line: ÔÔpho gin pho yu' (literally ÔÔenough to eat, enough to live on').

ÔÔIt is not important to be an economic tiger," said the king a year after the Thai economy crashed in 1997. "What matters is that we have enough to eat and to live. A self-sufficient economy will provide us just that. It helps us to stand on our own and produce enough for our consumption." He constantly reminds Thais that while pursuing material security, they should not forget to strive for inner peace of mind through spiritual purification.

Not surprisingly, this ideal of self-sufficiency backed by the royalty and grounded in Buddhist ethics is heady stuff in Thailand. ÔÔIt has been a powerful counterweight, at least ideologically, to the big growth, big exports, big corporation and big corruption, CEO-style of Thaksin,' observed the social anthropologist.

This resonates deeply among the lower classes, especially those in rural areas who grew up accustomed to practicing self-sufficiency. ÔÔThere's nostalgia for this that mixes uneasily with the happy-go-easy sort of unbridled consumerism they have also embraced,' she noted, pointing out that indebtedness is endemic in much of the countryside.

This uneasy conflict of value systems has not spared economic planners either.

ÔÔEvery year, top policy makers gather to listen attentively to the king's insightful birthday speeches. But instead of taking the wisdom they contain to heart and steering the country along the course he envisions, these politicians and bureaucrats direct their efforts in the opposite direction in conformity with the profits-first modernization paradigm that Thailand has followed during the past several decades, and which eventually led to the 1997 economic crash,' said a commentary piece in the Bangkok Post three years after the crisis paralyzed the Thai economy.

That paradigm created wealth for a small elite but left the rural poor hungry and discontented. Natural resources were sold, forest cover lost and the environment polluted, all to generate maximum profits in the short term. Throughout this imbalance and Thaksin's divisive policies, the king has remained an integrating force.

In May this year, the United Nations Development Program's first-ever Human Development Lifetime Achievement Award went to the king ÔÔfor his extraordinary contribution to human development.' The award was in recognition of his lifelong work of royal projects for various sustainability endeavours such as organic farming, ecological protection and cultural craft preservation.

ÔÔI see this in contrast and competition with Thaksin's own populist hand-outs that have earned him so much rural and lower-class support,' observed the social anthropologist. These handouts, by contrast, have been ÔÔlargely irresponsible' vote-bank handouts rather than well-devized empowerment policies, she said. Some of the rural poor may still like Thaksin, but they love the king more, she noted. They are capable of making a distinction between ÔÔa corrupt money-giver and a devoted honest project-builder.'

As for the king, ÔÔmy own gut feeling is that this royal person has his own ideas about Ôeconomic growth' and its perils, about the tricky challenges of trying to combine the best of modernity with the continuity of Thai culture.'

Such ideas may resonate strongly among large segments of Thai society but translating them to economic policy is another matter. ÔÔThese values of self-sufficiency and revitalising the local economy are definitely there, but they will certainly be challenged by the technocrats who will be part of the next government,' said Chomthongdi of Focus on the Global South.