Troubles in Thailand: A Worsening Economy and the Health of a God-King
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Vicky Ge Huang
The merry destination for both wealthy holidaymakers and budget-minded backpackers, Thailand has long been one of the most popular travel destinations in the world. Despite a decade of civil unrest and political shifts in the country, the tourism industry, which accounts for almost one fifth of the economy, has shaped Thailand as an economic force to be reckoned with in Southeast Asia.
In the commercial districts of the capital, Bangkok, skyscrapers and shopping malls continue to shoot up even as protests and demonstrations take place alongside the construction. All this has been part of a supposed economic miracle nicknamed “Teflon Thailand,” which is used to describe an economy that seems impervious to the effects of its political violence and instability.
The miracle appears to be wearing off, though, as the military junta, which staged a coup d’état in May last year to overthrow the government led by Thailand’s first female prime minister, Yingluck Shinawatra, stepped into its second year in power.
An economic slowdown has started to sweep over Thailand at an especially vulnerable and uncertain time for the country. Consumer prices and domestic consumption fell sharply in the past year while household debt spiked. The leader of the military junta, Gen. Prayuth Chan-ocha, displeased by the widespread criticism over his economic policies, has summoned academics, journalists and scholars for so-called “attitude adjustments,” during which they are detained without charge and interrogated about their supposed crimes. The resulting atmosphere of pervasive fear and unpredictability has only been heightened by the failing health of the god-like King Bhumibol Adulyadej, who has not been seen in public since September.
“I think the junta knows this,” said Pongphisoot Busbarat, a lecturer on Southeast Asian politics at Columbia University School of International and Public Affairs in an e-mail inquiry. “Recently, an official from the Commerce Ministry also admitted the drastic decline in Thailand’s export, which is an important backbone of the Thai economy since the 1980s, This is, in fact, not a new problem but it is exacerbated due to the lack of confidence by many sectors including both domestic and foreign investors.”
Other experts say that the downturn is caused by structural factors that have not been addressed for years. Joshua Kurlantzick, a senior fellow for Southeast Asia at the Council on Foreign Relations said: “A weak education system, an inability to promote innovation, a declining infrastructure. Military rule has not helped, since the military has not really developed an effective strategy for these effective challenges. But the challenges existed before military rule,” Kurlantzick added, “and were ignored over about fifteen years of domestic political turmoil. However, military rule may also be scaring off tourism, which is important to the economy.”
The economic policies of the military are riddled with contradictions. For while the military junta seeks to erase all traces of formerly overthrown prime ministers, it adopted the same fiscal policies as those of Thaksin Shinawatra, who was the Prime Minister from 2001 to 2006 and the brother of the similarly ousted Yingluck Shinawatra.
By pumping money back into the rural areas where most of the Thai population resides in exchange for political support, Gen. Prayuth is resorting to what he once derided as Thaksinomics — a legacy of Shinawatra’s populist set of economic policies.
But this time, the economic struggles have proved hard to overcome. It does not help that China, which provides the largest number of tourists to Thailand, is experiencing a similar economic slowdown. As the value of the Thai baht keeps slipping, slowing imports and weak local demand pose double threats for the country’s economic stability.
The Thai economy worsens, but so too does the health of King Bhumibol Adulyadej whose 88th birthday was just celebrated by well-wishers, supporters and worshippers who had come to gather in front of Bangkok Hospital in early December. The king, who has always commanded deep respect and served as a stabilizing force during political upheavals, has practically lived in the hospital for the past few years, undergoing various surgeries and treatments for water on the brain, a blood infection and lung inflammation.
The inevitable monarchial transition, which means the enthronement of Crown Prince Vajiralongkorn, who is vastly less revered and respected, poses another cause of concern for the country’s precarious political and economic state. For many staunch supporters of the king, the monarchial transition could bring disorder and chaos to a society so defined by its love and reverence of the monarch.
“The public is clearly more worried and not confident that the country will remain stable when succession comes,” said Paul Handley, a freelance journalist who had worked as a foreign correspondent in Thailand and whose biography of King Bhumibol Adulyadej The King Never Smiles is still banned in the country. “In a word, military rule has increased and not decreased worries about political, social and economic stability when King Bhumibol dies. Meanwhile institutions of stability — a working parliament, an effective bureaucracy and a strong economy — have all weakened.”
