THAILAND


Thailand Turns Banana Republic

Project Syndicate  |  Dec 1, 2008

By Sin-ming Shaw


BANGKOK – “Thailand’s future is up for grabs,” proclaimed the eminent Thai scholar Thitinan Pongsudhirak just before the country’s Constitutional Court ruled, in effect, that the ruling People Power Party (PPP) and its two smaller coalition partners are “illegal,” and hence must disband due to “election frauds” committed by party executives a year ago. Party leaders, including Prime Minister Somchai Wongsawat, are barred from politics for five years.

With that one stroke, Thailand’s popularly elected government fell. Parliament must now reconstitute itself without the three parties loyal to Somchai.

In Thailand’s current crisis, history is repeating itself, for the PPP under Somchai was the same Thai Rak Thai (Thais Love Thais) Party formed by the ousted Prime Minister Thaksin Shinawatra, a figure much-hated by the country’s Bangkok-based elite. The PPP was created because TRT had been outlawed at the time of Thaksin’s removal.

What is perverse about this is that every recent poll in Thailand shows that Thaksin remains wildly popular with the vast majority of Thais, most of whom live outside Bangkok. So, despite the ousting of two Thaksin proxies in a row by the court and the elite, Thais are likely to return yet another Thaksin loyalist if they are allowed to vote in an unrigged election.

The current crisis has been brewing for some time, but the breaking point came when anti-government protestors occupied Bangkok’s main airport. The protestors march under the banner of the “People’s Alliance for Democracy,” but the truth is that they have resorted to undemocratic means to topple a democratically elected government.

This parade of toppled and ousted governments has led Pavin Chchavalpongpun, another eminent Thai scholar, to call his country a “failed state.” That description may not yet be true, but the shadow of state failure is certainly growing.

Thaksin’s unforgivable sin was his violation of Thailand’s unwritten rules about how the country’s ruling elites are to behave. The key rule here is that the winner in any power play must not shut out his opponents. In a land of “smiles” and plenty, the winner must not take all.

But Thaksin, a self-made billionaire, allowed his greed and huge electoral successes to get the better of him. After his two landslide victories, he thought he could have it all. The traditional Bangkok elites had always thought of him as an uncouth upstart. Once in power, he essentially shut them out of the “grabbing” game, preserving it for himself and his cronies.

Thaksin’s supposedly legal “tax planning,” which allowed him to pay zero capital gains tax on the billion dollar sale of his flagship telecom company, Shin Corporation, in 2006, offended the rising urban professional classes.

But Thaksin had by then won over Thailand’s rural population through popular policies including handouts. Some of these projects were the proverbial bridges to nowhere. But others did meet real rural needs: cutting medical costs, providing subsidized agricultural loans, and maintaining price supports. Thaksin’s rural base rewarded him by returning him to power, ignoring his personal corruption.

Thaksin’s detractors call his rural strategy (which his proxy successors have followed) cynical vote buying. But Thaksin’s rural base wonders why the anti-Thaksin groups and his predecessors in power never tried to do much for them. Such vote buying to win hearts and minds is, after all, a fair game for any party to indulge in.

The going “wage” for the “Rent-A-Crowds” at the heart of the crisis was 300 Baht a day per person, plus food, transportation, and a clean yellow T-shirt – yellow being the Royal color. These protests have run, on and off, for nearly 200 days, with crowd sizes ranging from a few hundred to tens of thousands. It is widely known that the anti-Thaksin business elites provided the money to keep people in the street.

Thailand’s universally loved and respected King has not taken a public stand on the occupation of the airports nor on any other recent public demonstrations. Some analysts say anti-government leaders have hijacked the Royal Color to pretend that they have his support.

Nevertheless it is widely believed that Thaksin committed “lèse majesté” by attempting to undermine the moral authority of the crown, a cornerstone of the kingdom, perhaps replacing it with a republic that he would control. Lèse majesté is a grave crime in Thailand.

It is true that Thailand’s queen herself recently presided over the funeral of a protestor killed in a clash with the police. From that point on, policing of the protests became utterly passive. The queen is rumored to have said she would pay the medical expenses of any injured demonstrators.

The anti-Thaksin factions have failed to produce a knockout in any recent general election. Street protests to paralyze the government remain their sole weapon. But until and unless the anti-Thaksin civilian elite can convince the rest of the country that they are serious about winning the hearts and minds of the poor, Thailand will remain on a knife edge between banana republic and failed state.

Sin-ming Shaw is a former visiting fellow at Oxford University.
Copyright: Project Syndicate, 2008.
BANGKOK – “Thailand’s future is up for grabs,” proclaimed the eminent Thai scholar Thitinan Pongsudhirak just before the country’s Constitutional Court ruled, in effect, that the ruling People Power Party (PPP) and its two smaller coalition partners are “illegal,” and hence must disband due to “election frauds” committed by party executives a year ago. Party leaders, including Prime Minister Somchai Wongsawat, are barred from politics for five years.

With that one stroke, Thailand’s popularly elected government fell. Parliament must now reconstitute itself without the three parties loyal to Somchai.

In Thailand’s current crisis, history is repeating itself, for the PPP under Somchai was the same Thai Rak Thai (Thais Love Thais) Party formed by the ousted Prime Minister Thaksin Shinawatra, a figure much-hated by the country’s Bangkok-based elite. The PPP was created because TRT had been outlawed at the time of Thaksin’s removal.

What is perverse about this is that every recent poll in Thailand shows that Thaksin remains wildly popular with the vast majority of Thais, most of whom live outside Bangkok. So, despite the ousting of two Thaksin proxies in a row by the court and the elite, Thais are likely to return yet another Thaksin loyalist if they are allowed to vote in an unrigged election.

The current crisis has been brewing for some time, but the breaking point came when anti-government protestors occupied Bangkok’s main airport. The protestors march under the banner of the “People’s Alliance for Democracy,” but the truth is that they have resorted to undemocratic means to topple a democratically elected government.

This parade of toppled and ousted governments has led Pavin Chchavalpongpun, another eminent Thai scholar, to call his country a “failed state.” That description may not yet be true, but the shadow of state failure is certainly growing.

Thaksin’s unforgivable sin was his violation of Thailand’s unwritten rules about how the country’s ruling elites are to behave. The key rule here is that the winner in any power play must not shut out his opponents. In a land of “smiles” and plenty, the winner must not take all.

But Thaksin, a self-made billionaire, allowed his greed and huge electoral successes to get the better of him. After his two landslide victories, he thought he could have it all. The traditional Bangkok elites had always thought of him as an uncouth upstart. Once in power, he essentially shut them out of the “grabbing” game, preserving it for himself and his cronies.

Thaksin’s supposedly legal “tax planning,” which allowed him to pay zero capital gains tax on the billion dollar sale of his flagship telecom company, Shin Corporation, in 2006, offended the rising urban professional classes.

But Thaksin had by then won over Thailand’s rural population through popular policies including handouts. Some of these projects were the proverbial bridges to nowhere. But others did meet real rural needs: cutting medical costs, providing subsidized agricultural loans, and maintaining price supports. Thaksin’s rural base rewarded him by returning him to power, ignoring his personal corruption.

Thaksin’s detractors call his rural strategy (which his proxy successors have followed) cynical vote buying. But Thaksin’s rural base wonders why the anti-Thaksin groups and his predecessors in power never tried to do much for them. Such vote buying to win hearts and minds is, after all, a fair game for any party to indulge in.

The going “wage” for the “Rent-A-Crowds” at the heart of the crisis was 300 Baht a day per person, plus food, transportation, and a clean yellow T-shirt – yellow being the Royal color. These protests have run, on and off, for nearly 200 days, with crowd sizes ranging from a few hundred to tens of thousands. It is widely known that the anti-Thaksin business elites provided the money to keep people in the street.

Thailand’s universally loved and respected King has not taken a public stand on the occupation of the airports nor on any other recent public demonstrations. Some analysts say anti-government leaders have hijacked the Royal Color to pretend that they have his support.

Nevertheless it is widely believed that Thaksin committed “lèse majesté” by attempting to undermine the moral authority of the crown, a cornerstone of the kingdom, perhaps replacing it with a republic that he would control. Lèse majesté is a grave crime in Thailand.

It is true that Thailand’s queen herself recently presided over the funeral of a protestor killed in a clash with the police. From that point on, policing of the protests became utterly passive. The queen is rumored to have said she would pay the medical expenses of any injured demonstrators.

The anti-Thaksin factions have failed to produce a knockout in any recent general election. Street protests to paralyze the government remain their sole weapon. But until and unless the anti-Thaksin civilian elite can convince the rest of the country that they are serious about winning the hearts and minds of the poor, Thailand will remain on a knife edge between banana republic and failed state.

Sin-ming Shaw is a former visiting fellow at Oxford University.
Copyright: Project Syndicate, 2008.
www.project-syndicate.org



Thaksin can help reawaken the Thai tiger

South China Morning Post  |  Mar 8, 2008

By Sin-ming Shaw


Former Thai prime minister Thaksin Shinawatra was gracious when he ended his exile in Hong Kong: "Thank you, Hong Kong, for having me here," he said. "Hong Kong is a place where I would always like to come."

If Thaksin is sincere, he could serve Thailand by bringing back a few of his host city's more admirable virtues. Two stand out: a largely uncorrupt, efficient, transparent and accountable government; and an open and competitive economy.

Hong Kong is, of course, by no means perfect: mainland China's politics and habits are slowly infecting the city. Nevertheless, Transparency International, the world's premier corruption rating agency, ranked it the 14th cleanest society last year.

From 2001, when Thaksin first became prime minister, to 2007 under military rule, Thailand's corruption ranking plunged from an already low 61 to 84, which puts it in the same league as Gabon and Swaziland, two countries notorious for violent and corrupt leaders who routinely trample on their citizens' rights. Thailand's public sector is historically plagued by frequent military coups, managed with rare exception by incompetent generals and civilians who rule with condescension towards the people who pay them to serve. Public accountability, government transparency and official integrity remain largely slogans.

Thailand was once touted as a future "Asian tiger". None of the four "tiger" economies - Singapore, Hong Kong, Taiwan and South Korea - were as blessed with natural resources and fertile soil. And, unlike Thailand, all of them had suffered from war or internal strife. Yet, there is a vast gap in economic performance between them and Thailand in the past 50 years.

The cause is obvious: the inferior quality of governance in Thailand. While a relatively small business, military and political elite misgoverned Thailand, others in Asia, with more selfless and competent public servants, succeeded in finding their competitive niche in the modern world. Much of Asia, including China, focused on meeting the challenge of globalisation, whereas Thailand's elite has protected the country's economy to serve its parochial interests.

Thus, in the Heritage Foundation's annual rankings of countries by how free and competitive their economies are, Thailand routinely comes up short. Last year, it ranked 54th, compared to first and second place for Hong Kong and Singapore, respectively. China was at the bottom of the rankings 30 years ago but, at its present rate, it will soon overtake Thailand. In several key sectors, such as financial services and retail, it is already more open than Thailand.

Likewise, China has identified three universities as candidates to join the world's top 10 in the near future. Without quality education, there can be no quality workforce, without which no country can hope to compete. China is injecting public capital, while its wealthy graduates pour in private money in the style of American alumni donors.

By contrast, Thailand's government and local elite seem content for it to remain a provincial country shielded from global competition in science and technology. Foreign employers are appalled by the quality of Thailand's education system, whose graduates have little foreign language proficiency and possess scant analytical skills.

Competition is not a zero-sum game. The successes of Hong Kong, Singapore and mainland China should serve as a powerful reminder that Thailand has great potential.

As one of the nation's rare politicians who understands economics, and how to put the government to good public use, Thaksin is in a unique position to serve Thailand well. As a "non-politician", he can tell many of his business and political friends to chart a new course for Thailand, to help it become a "near tiger". Or he can let history judge him even more harshly.

Sin-ming Shaw is a former visiting

scholar in history at Princeton, Columbia, Harvard, and Oxford universities. Copyright: Project Syndicate



Thaksin and the Lessons of Hong Kong

Project Syndicate  |  Mar 1, 2008

By Sin-ming Shaw


HONG KONG – Former Thai Prime Minister Thaksin Shinawatra was gracious when he ended his exile in Hong Kong: “Thank you, Hong Kong, for having me here, so warmly. Hong Kong is a destination where I would always like to come.”
If Thaksin is sincere, he could serve Thailand by bringing back a few of his host city’s more admirable virtues. Two stand out: a largely uncorrupt, efficient, transparent, and accountable government, and an open and competitive economy.
Hong Kong is, of course, by no means perfect: Mainland China’s politics and habits are slowly infecting the island. Nevertheless, Transparency International, the world’s premier corruption rating agency, ranked Hong Kong as the 14th cleanest society in 2007.
From 2001 when Thaksin first became prime minister, to 2007 under military rule, Thailand’s corruption ranking plunged from an already low 61 to 84, which puts the country in the same league as Gabon and Swaziland, two countries notorious for violent and corrupt leaders who routinely trample on their citizens’ rights.
Thailand’s public sector is historically plagued by frequent military coups, managed with rare exception by incompetent generals and civilians who rule with condescension towards the people who pay them to serve. Public accountability, government transparency, and official integrity remain largely slogans.
Thailand was once touted as a future “Asian Tiger.” None of the four “tiger” economies – Singapore, Hong Kong, Taiwan, and South Korea – were as blessed with natural resources and fertile soil. And, unlike Thailand, all of them had suffered from war or internal strife. Yet, even the most cursory analysis reveals the vast gap in economic performance between them and Thailand in the past 50 years.
The cause is obvious: the inferior quality of governance in Thailand. While a relatively small business, military, and political elite misgoverned Thailand – often cynically, and sometimes incompetently – others in Asia, with more selfless and competent public servants, succeeded in finding their competitive niche in the modern world. Much of Asia, including China, focused on meeting the challenge of globalization, whereas Thailand’s elite has protected the country’s economy to serve its parochial interests.
Thus, in the Heritage Foundation’s annual rankings of countries by how free and competitive their economies are, Thailand routinely comes up short. In 2007, Thailand was ranked 54th, compared to first and second place for Hong Kong and Singapore, respectively. Taiwan was ranked 25th and Korea 41st.
Korea’s relatively low ranking reflects the inclusion of North Korea. Yet several South Korean companies, such as Samsung and Hyundai, have become global household names competing successfully against far more established brands, such as Sony and Honda.
Indeed, South Korea has shown how a poor country without natural resources can become a world-class economy. China was at the bottom of the rankings 30 years ago, but at its present rate it will soon overtake Thailand. In several key sectors such as financial services and retail, China is already more open than Thailand. The quality of China’s roads and telecommunication puts to shame Thailand’s uneven, badly maintained streets and its slow and expensive Internet service.
Likewise, China has identified three of its universities as candidates to join the world’s top 10 in the near future. Without quality education, there cannot be a quality work force, and without that, no country can hope to compete in a world where the march of globalization cannot be stopped. To that end, the government is injecting public capital, while wealthy graduates are pouring in private money in the style of American alumni donors.
By contrast, Thailand’s government and local elite seem content to remain a provincial country shielded from global competition in science and technology. Foreign employers are appalled by the poor quality of Thailand’s education system, whose graduates have little foreign language proficiency and possess scant analytical skills.
Competition is not a zero-sum game. The successes of Hong Kong, Singapore, China, and South Korea should serve as a powerful reminder that Thailand has great potential, if only its elites would stop behaving like spoiled children playing a game at which only they are allowed to win.
Thaksin has unique qualifications to serve Thailand well. He is one of the country’s rare politicians who understands economics, and how to put the government to good public use.
In his new life as a “non-politician,” Thaksin can tell many of his business and political friends to chart a new course for Thailand, one that would help the country become a near “tiger.” Or he can let history judge him even more harshly. The choice is his.
Sin-ming Shaw is a former visiting scholar in history at Princeton, Columbia, Harvard, and Oxford Universities.
Copyright: Project Syndicate, 2008.




Left still holds the key to France's future

South China Morning Post  |  May 8, 2002

By Sin-ming Shaw


Byline: Newly elected President Jacques Chirac needs the support of both sides in next month's parliamentary elections to push through economic reforms, writes Sin-ming Shaw

FRENCH PRESIDENT Jacques Chirac, who gained over 80 per cent of the vote in Sunday's election, did not win because of his policies. He won because the people did not want his far-right opponent, Jean-Marie Le Pen, to win.

The vote of 82 per cent for Mr Chirac and 18 per cent for Mr Le Pen was in line with expectations.

A crucial battle will be fought in next month's elections to select legislators to the National Assembly. If supporters of the left - the Socialists, various environmentalist parties and other fringe groups - vote along traditional lines, Mr Chirac will not get his parliamentary majority. He may be forced to again select a prime minister from the opponent's camp to forge a political marriage known in France as "cohabitation".

There have been three cohabitation governments in this Fifth Republic created by General Charles de Gaulle in 1958. The first was in 1986-89, when Socialist president Francois Mitterrand had to choose Mr Chirac to be his prime minister. The second was in 1993-95, when Mitterrand chose Edouard Balladur, a right-wing rival to Mr Chirac. The third began in 1997 when Mr Chirac, elected president two years earlier, found himself with Socialist Lionel Jospin as his prime minister.

For many voters, the terms right-wing and left-wing have become meaningless. For clear manifestos, many have turned to extremists. On the right, there is Jean-Marie Le Pen. Save perhaps for the French Communist Party, there is no extreme left of significance in France. The communist candidate got less than 3.4 per cent of the presidential vote.

The right is said to represent the free market, low taxes and globalisation, while the left is said to be mainly comprised of "free lunchers", labour unions and sock-the-rich do-gooders.

In reality, such distinctions are not significant. France has been ruled by essentially the same kinds of people, irrespective of their political labels.

Most prime ministers, socialist or right-wing, were educated at the Ecole Nationale d'Administration (ENA), as were Mr Jospin and Mr Chirac. Nearly all the senior ministers in Mr Jospin's cabinet went there, or to another grande ecole. The new Prime Minister, Jean-Pierre Raffarin, went to the Ecole Superieure de Commerce de Paris, another grande ecole which is a notch below the ENA.

The principal difference between centre left and centre right is essentially more free lunches versus fewer ones.

The predominant thinking among the ruling elite is that problems can be solved by leaders with superior intellect and overwhelming logic, and who are properly trained, like themselves.

In France, these graduates of grande ecoles plan for the country. They decide how many doctors must be trained at universities, what textbooks children must study and how many should enter universities. Advancement of knowledge is mostly through examinations. Those who make it to the top are assured of their ability to know the right answers.

Pre-dating Hong Kong's Financial Secretary Antony Leung Kam-chung by a century, members of the French elite have never doubted their ability as "market enablers" who can give the market the right kick to send it higher. The end result is that France has the largest government share in gross domestic product of all major western economies and one of the least efficient economies. Worse, mixing political and economic powers, like in China, has been the path to corruption which has tainted both sides.

France's many problems are now structural. Too many interest groups: unions (even in universities), government bureaucracies (also unionised), the ruling elite themselves and the salaried workers - blue- and white-collar - have benefited from heavy-handed state policies. Only the outsiders - the new job seekers, immigrants and the entrepreneurial - know the French way is not necessarily the best way. But the obstacles to change are formidable.

Left-wing voters realise there is something wrong with the economic structure. But the generous redistribution policies in place are what they traditionally sought. Will they throw their weight behind Mr Chirac to allow the right to restructure France to become more competitive, even if that means dismantling many of their favourite programmes?

Or will they revert to form to select their own representatives and force another cohabitation government to stand up against moves to dismantle "free lunch" programmes?

If Mr Chirac were deprived of a majority, would he seek an alliance with the extreme right to avoid another cohabitation with the left?

In the best of worlds, supporters of the left will hold their nose, wear their gloves and vote to give Mr Chirac a parliamentary majority to enable him to push through reform measures to restructure the economy.

Such a hypothetical outcome makes a few heroic assumptions about French politics. Nothing so far has indicated that those on the left are ready to abandon their ideological bent. Nor is there evidence that the ruling elite truly believes the market is a better "enabler" than itself.

A still bigger assumption is that the unions and subsidised agricultural sector will abandon their familiar tactic of paralysing strikes and embrace market forces.

Next month's election will mark a critical moment for France: will it be business as usual, ensuring continued decline, or a new beginning to regain the glory that was France?

Sin-ming Shaw teaches at the American University of Paris smshaw@shaw.com.hk

In Sin-ming Shaw's article on the French presidential elections published on Saturday, it was stated that Jacques Chirac and Lionel Jospin were graduates of the Ecole Normale Superieur. They were actually educated at the Ecole Nationale d'Administration. The mistake was due to a sub-editing error.



The Cure For Asia

Newsweek  |  Sep 1, 1997

By Sin-ming Shaw





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