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  • Thailand's Crisis Overload
  • Peter Warr (bio)


Thailand has endured a succession of recent crises: the Asian financial crisis of 1997–99, originating with the collapse of its own currency and reducing investor confidence for the entire decade since; the terrible tsunami of December 2004; outbreaks of SARS and Avian Influenza; rural drought; an interminable insurrection in its southernmost Muslim provinces, producing more than 4,000 deaths; and growing concern about the consequences for Thailand of global climate change. As if all that were not enough, in 2008 an additional double crisis overwhelmed the country: a self-inflicted internal political crisis deepening social divisions within the country and culminating in the closure of Bangkok's international airport in late 2008; and the repercussions of the most serious global financial crisis since the Great Depression of the 1930s.

Thailand's immediate prospects are somber, along with the rest of East Asia. In contemplating this depressing story it is easy to lose long-term perspective. Despite the serious problems, the quality of everyday life in Thailand has continued to improve over several decades and poverty incidence has maintained its long-term decline. Thailand has already achieved essentially all of its Millennium Development Goals, well ahead of the target date of 2015, while most developing countries lag far behind schedule. The current crisis will undoubtedly produce a pronounced economic contraction and some worsening of poverty incidence. No one knows how long-lasting this episode of deglobalization will be, but it will be temporary. It should be seen in the context of long term economic improvement which can be expected to continue once the global crisis subsides. [End Page 334]

Accordingly, this chapter turns first to Thailand's current twin crises: the internal political crisis and the worldwide financial crisis. It then places these events in longer term perspective by reviewing Thailand's long term economic experience and in particular the impact of the last serious economic crisis to affect Thailand —the Asian financial crisis of 1997–99. To see what is likely to happen as a result of the present contraction it is helpful to look at what happened during previous economic downturns.

The Internal Political Crisis

Thailand's ongoing political conflict is about a challenge to the social dominance of the country's traditional elite —the educated Bangkok middle class, including the civil service, the military, and the aristocracy. The challenge arose from a group of political entrepreneurs who had successfully appealed to the massive rural electorate.

The most important of these political entrepreneurs was Thaksin Shinawatra, a clever business tycoon elected Prime Minister by large majorities in 2001 and again in 2005. Thaksin was elected by offering populist policies to the rural majority. But he was deposed by a military coup in September 2006, allegedly because of corruption and because his government was said (by the generals) to be disloyal to the monarchy. Thaksin denied any such disloyalty, but while he remained in exile after the coup, a court decision banned him from political activity in Thailand and disbanded his Thai Rak Thai political party for alleged electoral fraud. In addition, Thaksin was convicted in absentia for misusing his powers while Prime Minister in support of his wife's business interests.

In the subsequent elections of January 2008 the People's Power Party (PPP), a successor to Thaksin's banned Thai Rak Thai, won office with right-wing veteran politician Samak Sundaravej as its leader. Opponents of Thaksin and his allies were enraged. They now identified themselves by wearing yellow shirts, the royal colour, and ironically called themselves the People's Alliance for Democracy (PAD). They clashed openly and violently with Thaksin's supporters, now identified at their rallies by red shirts. In late 2008 the PAD's protests against the PPP government became increasingly strident, justified mainly by the claim that Samak and the PPP were mere proxies for the fugitive Thaksin.

While in office, Samak had continued to host a television cooking programme and received payment for doing so. In September, the full bench of the Constitutional Court ruled that it was unconstitutional for Samak to maintain his television career while Prime Minister, and disqualified him from office...


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pp. 334-354
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