economics

May 31, 2010

Why Thailand is boiling

Filed under: Uncategorized — ktetaichinh @ 6:12 pm
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Thailand’s king, Bhumibol Adulyadej, has a personal net worth estimated at $35 billion, making him the world’s wealthiest monarch, well ahead of No. 2, the oil-rich Sultan of Brunei, with just $20 billion.

The average annual income of Thailand’s 67 million people is about $8,000, or 95th among the world’s 194 countries. Not especially bad. Not particularly good. Just right for making the tens of millions nearest the bottom bitterly aware that they hold the short end of the stick in the burgeoning Land of Smiles. This yawning economic crevasse between the constitutional ruler and the vast majority of his subjects dramatizes the core issue at the heart of the bloody uprising that shook the streets of Bangkok last week, forcing the country toward the brink of chaos and uncertainty.

The divide

Not that many Thais complain about Bhumibol’s vast fortune. They do not. Most praise his years of hard work, personal interest and generous contributions to development, particularly in the poor and populous northeastern part of the country. Of course, under Thailand’s harsh lèse-majesté laws, criticizing any member of the royal family is punishable by up to 15 years’ imprisonment.

With the 82-year-old Bhumnibol sick and failing and his son, Crown Prince Vajiralongkorn, loathed for a range of excesses, millions of Thais fear being cast adrift. The only alternative, they reason, is to remake Thailand from the peculiar admixture it is today into a full-fledged democracy. That prospect, in turns, frightens numerous others.
Economic fissures have been broadening gradually since the days of the Vietnam War, when the U.S. pumped billions into making Thailand a base for bombing missions and a springboard for anti-communist “hearts and minds” campaigning. The king, bolstered by Washington, worked assiduously and, for the most part, effectively to hold Thais together. Bhumibol evolved into the nation’s father.

In the aftermath of the Vietnam War, Thailand prospered. But the rural masses did not keep pace. Bangkok boomed into a rough-hewn center of stunning high-rise towers, its streets choked with Mercedes Benzes and BMWs. In the countryside, motorcycles and pickups became more commonplace, but the daily lives of peasant farmers differed little from what they had been for centuries.
http://www.usatoday.com/news/opinion/forum/2010-05-27-column27_ST2_N.htm
http://www.prospectmagazine.co.uk/2010/05/democracy-in-danger/
Democracy in danger
The late political scientist Samuel Huntington was one of many academics to link class and democracy. He argued that economic growth in developing countries expands the middle class, which, as it becomes wealthier and more educated, demands social, political and economic rights, largely to protect its gains. Meanwhile, as that middle class grows, regimes become more dependent on its entrepreneurs to power economic growth and authoritarian leaders are forced to listen to their demands. Such influence opens up the political system, with political and property rights following.

For decades, history seemed to uphold this theory, beginning with southern Europe after the second world war and extending to east Asia in the early 1990s. Nations developed their economies, middle classes blossomed, and educated urban people began to demand their rights. After 1990, the number of democracies rocketed: eastern and central Europe, much of Africa, and most nations in east Asia became democratic. By 2005, for the first time, more than half the world’s population was living in a democracy. Sometimes this had happened because the middle class took to the streets to topple the autocrats, as in Thailand’s “Black May” 1992 demonstrations against the military government. In other cases, as in Taiwan and Chile, economic growth and middle-class pressure led to incremental political change and, finally, after the passing of a long-time dictator, democracy.

So far, so good. The same seemed to be true in the Philippines, where a liberal constitution was passed following the 1986 revolution. “You had a lot of hope that [dictator Ferdinand] Marcos was gone and it’d be a different country,” Philippine human rights activist Harry Roque told me. “It was the high point.” Then, as with any revolution, reality set in.

The Thai example
Such violence is increasingly common in a country once regarded as one of the most stable nations in southeast Asia. The present difficulties began in 2006, when another wave of street protests swept Bangkok, this time led by lawyers, doctors and small-business people. These rallies of thousands of middle-class urbanites demanded the removal of the then prime minister, Thaksin Shinawatra—a charismatic populist backed by the rural poor. After months of rallies, some of which openly agitated for a coup to “save” Thailand’s democracy, the movement got its wish. In September 2006, the armed forces took over the government.

These crises have their roots in the uncertainties of globalisation. Buffeted by the 1997 Asian financial crisis, Thailand’s national mood shifted sharply from the reformist early 1990s. Middle-class Thais began to focus on making and saving money rather than political change. The same was true in the Philippines, where years of political instability, highlighted by endless infighting, saw many Filipinos tune out of politics. In Russia, years of post-cold war economic instability under Boris Yeltsin soured attitudes to political change. When Yeltsin exited the political scene, many Russians hoped they could just ignore politics altogether. “Their main interest now seems to be to consolidate their material wealth and social status,” said Dmitri Trenin, a Russian political expert at the Carnegie Endowment for International Peace in Moscow.
The first explanation is that first-generation democratic leaders have too often turned into elected autocrats. They come to see democracy as a process in which electoral victory provides a mandate to obliterate their opposition—which in turn fuels middle-class rage, then frustration. Perhaps most famously, Vladimir Putin, riding on high approval ratings while Russian president in the early 2000s, stripped regional governors of influence, eviscerated the national parliament and began to neuter influential media. Although his successor Dmitri Medvedev has given speeches calling for greater freedom, most Russian political analysts believe his commitment to democracy is no more sincere than Putin’s. Worse, Medvedev oversaw a constitutional change that would allow Putin, now prime minister, to reclaim the presidency in 2012.

Venezuela’s Hugo Chávez appears to be deploying similar tactics, using his power to entrench his allies and undermine checks on his presidency—for instance, by revoking the licence of the nation’s most vocal private television network and those of dozens of radio stations. Last December, he jailed a judge after she issued a ruling that displeased him. He gutted his once effective national oil company, filling it with loyalists, while criminalising critics who offer “false” information that harms “the interests of the state.”

In Thailand, former Prime Minister Thaksin’s “war on drugs” may have been a cover to remove opposition: thousands of people, ranging from political opponents to actual drug dealers, were killed. He also used lawsuits and threats to intimidate opposition lawmakers and silence the press. Similarly, in Nicaragua, for instance, where since returning to office in 2007, a revived Daniel Ortega has used questionable laws to block the opposition.
Weak institutions
It would have been possible to deal with these elected autocrats had it not been for a second problem: weak democratic institutions. In Russia nearly every opposition group eventually succumbed to Putin. In autumn 2008, the Union of Right Forces, the last truly independent Russian political party, merged with other pro-Kremlin groups. The few remaining opponents, like chess champion-turned politician Garry Kasparov, command little popular support. In Cambodia—a nation marked by its inability to build durable institutions to underpin its fragile democracy—Prime Minister Hun Sen unleashed a campaign of intimidation, including the murder of political opponents. Such weak democracies also spawn a less violent but just as damaging problem: corruption. During an era of authoritarian rule, corruption is usually predictable: the regime siphons off a proportion of money, but the problem is quite contained. Yet young democracies often see old channels of corruption vanish only to be replaced by a more complex system in which many different actors—local political bosses, bureaucrats—have their hands out. Such graft quickly discredits democracy in the eyes of once-hopeful citizens.

Vested interests
The global financial crisis has led many in developing nations to wonder whether capitalism has failed, and how much of that failure should be laid at the feet of democracy. But a more pressing anti-democratic force arises in the middle classes’ realisation that they have much to lose from real enfranchisement. In Bolivia, middle-class demonstrators launched an anti-government campaign in 2008 against President Evo Morales, a populist former union leader. They came mainly from the country’s wealthier eastern half, where business leaders worried about Morales’s plans to nationalise mineral and oil wealth, push out foreign companies and raise business taxes to boost welfare. The protesters soon caused more chaos than Morales had, especially when, in August 2008, they shut down major roads and attacked police.

This is part of a further pattern where, once they have turned against elected leaders, angry middle-class protesters use undemocratic means to topple presidents, and in turn to build a more elitist form of democracy in which they would hold most of the power. This has certainly been true in Thailand, while in the Philippines, Manila’s urban elites seem almost addicted to demonstrations. In 2001, they poured into the streets to topple Joseph Estrada, a former actor who rose to power on his macho appeal with the underclass (before allegedly using his office to rake in vast sums of money from illegal gambling). The protesters later gathered again in an unsuccessful attempt to oust Gloria Macapagal-Arroyo, accused of subverting democracy and tolerating massive graft.

The dramatic 2009 coup in Honduras saw a similar story. There, President Manuel Zelaya pushed to change the constitution to give himself longer in office, and appeared to be rigging a referendum. He also enacted populist economic policies, including a hike in the minimum wage, which angered many business owners. As the day of the referendum drew near, Zelaya’s middle-class opponents and their allies in the Honduran congress began to protest. In June 2009 the military stepped in, forcing Zelaya into exile. In the subsequent election the conservative National party, backed by the middle class, won the vote.

The great divide
To be sure, the middle classes have not all turned against democracy. In Iran, urbanites have led the protests against Mahmoud Ahmadinejad’s increasingly dictatorial regime. In Burma, a country suffering some of the worst human rights abuses in the world under the ruling junta, middle-class students have continued to push for democracy. Nonetheless, a distinct pattern of disillusionment also holds true in older, more consolidated democracies—India and Chile, for instance—where the middle class has become cynical about politics. Here democracy has sunk deep enough roots that are nearly impossible to cut out. But such disillusionment is often reflected in low voter turnout—in Chile voting is mandatory, but in the December 2009 presidential election, millions of people did not even register to vote despite possible fines. In Ukraine, the middle class has grown disillusioned with corruption and the failings of its politicians.

Once the middle class turns there are few options. Strongmen like Chile’s Augusto Pinochet could, in the past, credibly claim to swap democracy for economic growth. But such a bargain rarely works these days. The military can still seize power, but it normally proves incapable of governing. In the past, the generals could appoint a few capable technocrats. But today most developing economies are linked to global markets, requiring more advanced management to retain the confidence of foreign investors. Such a pattern has been seen in Thailand and in countries such as Fiji, where the military took power in a coup in 2006, only to see the economy slide into decline and the country thrown into social unrest.

A return to “soft authoritarianism”—a prime minister chosen by the elites, for instance—is also problematic. Citizens with a taste for democracy are much less likely to accept oligarchic rule—and the poor increasingly form noisy protest groups to combat the middle-class demonstrators. Such protests can lead to a permanent divide: once the middle class and the poor worked together to fight for democracy, but a democratic unravelling often pits the two against each other.

These newly anti-democratic tendencies do not only threaten political reform worldwide. They also confound democracy promotion groups in the west. Many such groups now doubt whether building a middle class actually encourages the global spread of freedom. “You have all these Thai liberals who would condemn human rights abuses in a place like Burma, but then they support the [2006] coup,” says one US-based human rights activist. “How can they do both?”

If the west wants to reverse the recent slide, it needs a new strategy. For one, it must stop its tacit support for coups, which only deepen social divides and create precedents for toppling elected governments. Washington does seem to be getting this message. During the 2002 coup in Venezuela the White House tacitly condoned the putsch; after the 2009 coup in Honduras, President Obama spoke out strongly against the military takeover. Though the US in effect condoned the 2006 coup in Thailand, this time, senior American officials have been careful to meet not only with Bangkok’s elite but also with the red-shirted protesters, while the Obama administration has quietly told the Thai government that it does not support another military intervention.

Pro-democracy groups, both inside and outside developing nations, must also abandon the assumption that simply building a middle class will guarantee democratisation. Instead, they should focus on building the kind of middle class that is comfortable with a poorer class that also has political power.

And leaders elected largely by the poor will have to recognise that they must uphold the rule of law, or risk alienating the middle class and the elites who normally control business, the military and other critical segments of society. In some countries, this process has already begun. In Brazil, Luiz Inácio Lula da Silva was elected in 2002 partly because of his popularity among the poor. But he quickly modified his leftist, populist views to win over his country’s middle class and succeeded in both growing the economy and instituting successful anti-poverty programmes.

The west’s definition of democratisation must also move beyond simply the holding of regular, free elections to include rights and liberal institutions. Paul Collier notes in his 2009 book Wars, Guns, and Votes, that this “elections equal democracy” thinking in the poorest nations in Africa can spark horrific ethnic conflict, since elections, without any other institutions of democracy, become simply another arena for tribal conflict. The same problem is clearly evident beyond Africa, where newly elected autocrats feel free to trample on minority rights after winning a poll.

Instead, developing nations could consider proportional representation, which can protect minority rights and encourage coalitions that bring together the poor and middle classes. Aid donors should invest in promoting constitutionalism—the development of institutions that create and solidify the rule of law—while also promoting and monitoring elections. Foreign countries could also promote constitutionalism by funding training for the legal profession, and by using aid money not only to educate officials and politicians but to fund civil society activists, and others who might be involved in drawing up more progressive constitutions or, later, in upholding constitutional values.

If established democracies and developing nations don’t make these new investments in the middle class, the result will not be pretty. Thailand now faces a permanent divide between the middle class and elites on one side, and the poor on the other. When the country holds elections again in the autumn, a pro-poor party is likely to win, since the poor comprise the majority of he population. Yet the middle class and elites are unlikely to simply cede power, and could launch a new wave of violence that might lead to another coup. “The country is just paralysed by fear,” one senior Thai official told me, shaking his head. “Any option now is bad.” Unfortunately, from Cambodia to Venezuela, many developing nations are in a similar bind.

Map: elected leaders who turn into autocrats
kurlantzick-link
Click here to see the map full-size

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