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When Thaksin Shinawatra was swept to power a year ago, most analysts were stumped at explaining the reasons behind Thailand's biggest ever electoral victory. The ruling Democrats, a middle-ground party which had pointed the Thai economy in a positive direction (though not as fast as many who didn't realise what a mess the economy was in to start with wished for), and made massive strides in reform and respect for the new democratic constitution, were decimated in all their marginal seats, left only with a few "safe" seats in their Southern Thailand stronghold. On the other hand a man who was under strong suspicion for corruption, a senior minister in the previous administration that oversaw Thailand's economic demise, and whose party was only a few months old, stood atop the victory podium. Almost every Thai we talked to, from CEO's to flower sellers and tuk tuk drivers hailed the victory. The Rat however, was unsurprised. In my column announcing the Thaksin victory entitled, Nothing succeeds like Success, I recounted an experience of my early days working in Thailand. Apart from an electoral history characterised by Thais seemingly getting bored with one government, good or bad, and like butterflies flitting from one flower to the other, I saw another more deep seated cultural artifact at work... When the Rat first worked in Thailand, the copper on point duty on the route to work used to approach close by my motorbike taxi and touch my arm as we rode past. The first time it was disconcerting, making me think what possibly I could have done wrong, fingering the 500 Baht note ready to discourage any argument over perceived wrong-doings.In the more than 12 months since, I see no reason to change that analysis. The same culture was at work at election time, except this time Thaksin was the rubbed, and the Thai people the "ruberrers". Let me be clear, Thaksin's reign so far has included several accomplishments. The most obvious is Thaksin's application of good business principles to public service. His "One Product, One Tambon" policy for example applied sound principles of empowerment, and de-centralized decision making. His policy of encouraging Thai companies to use Thai agencies rather the multinational agencies when outsourcing should have gone a long way to reducing Thai genuflection to foreigners, and the investment in local training and development. The ideas were good, yet the translation from private enterprise where you pay people to do what you want, to the public sector, where you are a servant to the people who voted you in, has been less successful. Additionally, while some Thais are already showing impatience with the slowness of recovery, a presently resurgent stock market and economic indices suggesting a turn around congruent with other Asian nations, suggests considerable progress on the economic front is being made. On the other hand, Thaksin's reign has also been characterised by scant regard for the new constitution and their mechanisms. Thaksin has attacked the mechanisms of the new reform-based constitution at every opportunity. Some are still not convinced (including the Thai-language papers) that Thaksin's slender victory in his corruption trial was not won by the ol' time-honoured "baht and favours under the table" strategy. In fact most pro-Thaksin commentaries during this time focused on the "Regardless of guilt, if Thaksin gets convicted it will be a disaster for Thailand, because there is no-one who can take his place" spin. While in other places in the world this argument would bemuse, in Thailand, where the common assumption is that to be powerful you have be corrupt, it did make sense. Thaksin has also shown a Chinese emperor-like predilection for attacking the character and expertise of those who dare question his policies, rather than argue them out rationally. NGO and academic commentators have borne the brunt of this. Thaksin likes to remind the electorate of his career from poor copper to corporate magnate. Courtesy of The Nation columnist Chang Noi, we are reminded of Thaksin's pitch to the poor of Thailand in his election posters. "...I was a village kid. I started my schooling in a village school. I became a coffee dealer, helped my Dad on his farm, delivered newspapers, got into mining then computers. I once had a company with seven employees. Now it's over 60,000 (with) a turnover of billions of baht. I put a satellite up in the sky. I invested overseas. I almost went bankrupt 3 times, but now have more wealth and property than I could ever have imagined..."That spin to the poor of the Thai provinces says a lot about Thaksin popularism, as Thaksin is indeed a master communicator - much of the rise of his corporate empire Shin Corp has been due to an embracing of advertising and market research principles applied by Shin Corp's advertising and marketing agencies. His agencies were also put to work on his election campaign. But despite Thaksin's plea that he can do for Thailand what he did for himself, the evidence is scant. Thaksin is indeed an entrepreneur. But the very term "entrepreneur" is poorly understood. Despite popular and academic definitions focusing on "risk taking", most successful entrepreneurs do exactly the opposite. The successful entrepreneur is one who has reduced risk to almost nothing. And that is exactly what Thaksin was able to achieve with Shin Corp. What the election poster didn't say of course that the rise of Shin Corp was based on building a monopoly, not competition. That while we must give Thaksin credit for hard work and recognising the market opportunity in telecommunications and especially mobile telephony, his success was based on getting to know the right people and working the system to monopolise and control a key industrial sector. That Thaksin is a brilliant businessman is beyond argument. That he can also run a country using the same methods - less so. That's not to say Thaksin isn't trying. The last 12 months has seen Thaksin trying to bustle in acts to control the media, and regulate what, along with Taiwan and the Philippines, is among the region's most free press. His admiration for south of the border compatriot Mahathir and how the latter has been able to maintain and dominate political power is well documented. Publicly Thaksin has stated that being a man of such financial wealth, he is therefore less likely to be bribed or "bought", and therefore he should be trusted. And there's the rub... For as any foreign visitor to Thailand could attest, tourist or business-person, respect is accorded to visible symbols of wealth. We remember well the comment of a Thai business-person who when asked how he assessed the substance of a foreign businessman stated - "...I look first at his shoes. Are they a brand name or not? Then I look at his watch. I feel far more confident of doing business with a man wearing a Rolex..." The tragedy of the first 12 months of the Thaksin administration is that Thailand's real weakest leak has not been addressed - indeed it is being patched up with the super-putty of face and fairy tale. Thaksin's victory was based on a appeal to the overriding Thai value of attaining wealth and influence. How it is achieved is secondary. For the poor Issan or Northern Thai farmer the story of Thaksin may not go beyond the pitch of the aforesaid election poster. A fairy tale delivered by the Brother Grimm. For beyond all of the spin delivered by Thaksin, the weakest link has been sentenced to purgatory. And this was well put by an old mate of the Rat over a dinner of Khao Pad Koong eaten from our favourite street food stall in downtown Soi 22 Sukhumvit. "...Nothing will change in Thailand until we reform our tax system..." Huh? Tax reform?! I don't recall Thaksin mentioning that much... Thailand, led by a multi-millionaire, continues boast extremes of income, comparable to the poorest of African states. In the same electorates in which Thaksin and Thai Rak Thai pitched their rags to riches spin, farmers who provide the food wealthy Thais consume each day struggle to survive - let alone ever own one of those hand-phones that Shin Corp sells. Hard work is rewarded by increasing debt as Shin Corp continues to thrive through their monopoly. While readers of the APMF are generally English speakers and senior management of wealthy companies and have little in common with the farmers of Issan, like my middle class Thai mate above, most are also acutely aware that income disparities of the extent evident in Thailand discourage rather than encourage real entrepreneurship and economic development. They encourage a hand-out culture. And Thaksin knew this when promising a hand out for every province on his election and 30 baht health care. It encourages institutionalised bribery and corruption in low to medium level public servants whose official salaries can never support their families. It encourages drug use from feelings of alienation and prostitution from desperation. It encourages a black economy which according to most estimates range from 40% to 60%. At worst and unchecked it is the stuff of coups and political instability. At present, most of Thaksin's achievements relate to keeping him in power and reducing the "checks and balances" power of constitutional agencies and the media - even to the extent reducing business competition ala Thaksin's own practices to acquire a monopoly in Shin Corp Until Thaksin addresses Thailand's key problem of income ineuqality through tax reform, other efforts will come to nought. Will Thaksin address the parlous state of education in Thailand which fails to empower many with the abilities of objective analysis and questioning, but rather an unquestioning obedience to those with power, leaving them prone to believing in fairy tales? And will Thaksin, whose legitimacy relies on simply being a rich man with a magic touch, throw this away to change the system which made him? Somehow I don't think so... Email the Chao Phraya River Rat
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© Asian Business Strategy & Street Intelligence Ezine 2001
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