Thailand’s ‘Hunger Games’ Crisis Is About The Economy

Young Thai’s taking to the streets have every reason to wonder what these last 14 years were all about.

In 2006, a previous group of men with guns commandeered Southeast Asia’s second-biggest economy. That power grab was, ostensibly, about restoring order so that more competent managers could raise living standards for tens of millions of Thais. That’s typically how coup leaders justify their actions: we can end the political dysfunction to get big things done.

Not so much. After Prime Minister Thaksin Shinawatra was shown the door, Bangkok saw a revolving door of leaders—eight, to be exact—come and go. That was until 2014, when the latest group of generals marched into power. Yet all these military men-turned-politicians lost sight of a basic truism of leadership: it’s the economy, stupid.

The reference here dates back to the time of the parents of the Generation Zers holding the protest placards–the 1990s. It was in the early part of that decade when James Carville, advisor to then-U.S. President Bill Clinton, coined the “it’s the economy, stupid” phrase that countless governments adopted soon after. Then came the late 1990s, when Thailand was ground zero for the Asian financial crisis.

The shadow from that 1997-1998 period still hangs over Thailand. It was amid the chaos and economic pain of that period that billionaire populist Thaksin staked an unlikely claim to folk-hero status and, in 2001, the premiership.

Thaksin’s five years in power echoed the Silvio Berlusconi saga in Italy. He weakened Thailand’s institutions, and pumped cash into poorer areas to buy support. The net result was increased inequality and an urban-rural divide that morphed into a powder keg of unrest.

When Thaksin was ousted in 2006, a succession of governments tended to the immediate needs of the moment. Mostly, that meant prioritizing faster economic growth over moves to increase competitiveness, innovation or productivity.

By 2014, a new group of military leaders, led by Army General Prayuth Chan-ocha, took power pledging to end the dysfunction—and the stupidity Carville railed against—to marshal Thailand onto a more prosperous trajectory. In 2019, Prayuth’s men even held elections to civilianize things.

Again, not so much. That plebiscite and new constitution did little more than legitimatize a status quo of prioritizing order and media controls over personal freedom. Things are heating up to the point where protesters are daring to criticize the monarchy. Strict lese-majeste laws can get you 15 years in jail.

Things have gotten so surreal, meantime, that the government is barring the three-finger salute from “The Hunger Games” and policing selfies shared on social media. This is where Thailand finds itself as its economy slips into recession.

All of which means things in the “Land of Smiles” may very well get worse before they calm down. In the April-June period, the economy contracted 12.2{066dbc63777e5ed549f406789d72fdeebd77a32711d57f7b38ff2b35c4ba2a42} from a year earlier, the worst in 22 years.

Covid-19 gets the immediate blame. Together, exports and tourist arrivals drive 70{066dbc63777e5ed549f406789d72fdeebd77a32711d57f7b38ff2b35c4ba2a42} of gross domestic product. Both engines are sputtering amid a pandemic showing signs of a second wave globally. But the real malfunction is 14-plus years of governments failing to get under the economy’s hood.

Bangkok has seen countless stimulus packages, countless changes in financial strategy and countless central bank policy shifts. It’s seen far too little action to catalyze a startup boom, increase efficiency, modernize education, get the military out of the economy or diversify growth engines. Lots of grand schemes—including most recently “Thailand 4.0”—but uneven implementation.

None of the 10 governments that held power since 2001 has acted decisively to avoid the so-called “middle-income trap” whereby per capita income stalls below $10,000 (Thailand’s is around $7,800). Something else happened in the interim: China became Asia’s top power and a giant vacuum for manufacturing.

Thailand risks falling behind Southeast Asian neighbors working, generally-speaking, to raise economic games. In Indonesia, Malaysia, the Philippines and Vietnam officials are vying for the same multinational companies. This competition, of course, makes it harder for Thai leaders to maintain the economic gains since the 1990s, never mind raise wages significantly.

“It’s often said by those who know the country that this is true: the Thais have a smile for every occasion,” says analyst Vincent Tsui of Gavekal Research. “If so, then the smile on Thai faces today is a rictus of anger, pain and fear: political anger, economic pain and fear about the future.”

That’s hardly where Thailand wants to be as 2021 approaches. The generals in charge face a challenge they can’t resolve with force. And it would be foolish to think retooling a long-neglected Thai economy will get any easier in the year ahead.

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