Outside the Central department store in Ubon Ratchathani, a black Mercedes-Benz S-Class with yellow Lao licence plates drove from the car park. It was a Wednesday, but at weekends, a security guard told me, some 20% of the vehicles parked here are from Laos, many of which are European cars travelling to the northeastern province through Pakse or Mukdahan.
traditional work: while the Northeast has an image of peasant farmers, now 80% of the region’s economy comes from nonfarming sources. photo: sawed kruwongpaiboon
It is the third up-market department store the Central Group has opened during the past year in Isan, and boasts an even more elegant design and a bigger scale than the Udon Thani and Khon Kaen branches.
Across the road, housing estates and condominiums developed by big-name firms such as CP Land and Land & Houses have mushroomed to replace local provincial investment. Some 200-300 taxis roam the province’s streets, which is home to one of the largest state universities in the region.
Across the northeast, there is a boom going on, with Board of Investment-approved projects pumping tens of billions of baht into the economy each year. Isan is no longer a poor, dry desert, lacking resources, and the BoI last year approved 150 projects in 20 provinces, reaching a record high investment value of 78.94 billion baht.
Meanwhile, families are getting richer.
AN EMERGING MIDDLE CLASS
KEEN TO HAVE HIS SAY: Red shirt supporter Shavaritth Unyotha, pictured voting in the voided Feb 2 election, is among the region’s emerging middle class.
Som, not her real name, is a 14-year-old who lives in a small village 50km outside Muang Ubon Ratchathani. She is always changing her phone — she used to own a Galaxy Tab, but now has an i-mobile which she constantly uses to take selfies and post pictures on Facebook. She wears braces on her teeth and is now demanding to be allowed to hit the nightclubs, where ID cards are not always checked.
Som and her family are a stark contrast to the Isan stereotype of unsophisticated rural people. Som’s mother, Ying, owns 40 rai of land for rice farming, of which 20 are leased out to her brother. Although most of her income comes from rice, Ying also owns a small shop in Muang Samsip district.
Som wants to go to school in Bangkok, but Ying and her British husband Mat, not their real names, have already made it clear that this will not happen, since Bangkokians continue to look down on rural people. “Stop calling people here ‘Lao’ and f**king buffalo. They are not stupid, and not bought for a bowl of rice,” said Mat, Som’s stepfather.
With a population of 23.1 million, Isan — comprised of 20 provinces — is the most populous region in Thailand. According to the National Statistical Office, out of the 12.8 million people employed in the region last year, 54.1% were in the agricultural sector.
It is also the poorest region, with Bank of Thailand statistics indicating an average income per person of 67,888 baht per year. Khon Kaen has the region's highest income per person at 106,587 baht, while Nong Bua Lampu has the country’s lowest, at 41,480 baht per person per year.
But Isan is no longer a peasant society in the traditional sense. Income from the non-farming sector comprises up to 80% of the gross regional product of 1.28 trillion baht.
Less than 20km away from Central Ubon Ratchathani, Pichai (not his real name), a 48-year-old farmer, is replanting rice that failed to grow from the previous crop.
Last year, he sold 4.8 tonnes of hom mali rice for 21 baht per kilogramme from his 12-rai paddy, which he shares with three relatives.
Out of the 200 households in Pichai’s village in Ban Don Chi, fewer than 15% pledge their rice. Since they own only five or six rai of land, all of them also have non-farming sources of income. Most of the farmers were not affected by the previous government’s rice-pledging scheme, which has been widely criticised for corruption and hefty losses under the Pheu Thai administration. The break-even point, said Pichai, was 14-15 baht per kilogramme.
“Only those who have invested a lot and own a lot of land go out and protest,” said Pichai, also a researcher at the Ubon Ratchathani Rice Research Centre.
Over the past 20-30 years, the changing economic landscape has given rise to an emerging middle class in Isan. This has become the largest support base of Thaksin Shinawatra’s political parties — the latest in the form of Pheu Thai — which have won every national election since 2001.
These economic and political factors led the red shirts to realise they have political rights and can have power over their destiny, said Apichat Satitniramai, an associate professor at Thammasat University’s economics faculty.
In his 2013 research paper “Re-examining the Political Landscape of Thailand”, Mr Apichat and a team of senior professors from Thammasat and Chulalongkorn universities identified red-shirt supporters as those in the lower middle class with a monthly income of 5,000-10,000 baht. This group constituted about 40% of Thai households in 2009, representing the highest group of eligible voters.
“Politics are a luxury good, and the poor struggle to make ends meet. But when people are better off than before, they have time to read a newspaper, listen to the radio and watch television,” Mr Apichat said.
Charles Keyes is an anthropologist who has studied rural northeastern Thailand for more than half a century. He used the term “cosmopolitan villagers” in his newly published book Finding Their Voice: Northeastern Villagers and the Thai State to describe late 20th century rural northeasterners who “have an understanding of their place in a much larger world”, due to their exposure outside the region.
“The cosmopolitan nature of rural northeasterners is not understood or, if it is understood, not appreciated by those in Bangkok who still assume that ‘rural’ people have (or should have) the same characteristics of subsistence-based agriculture,” wrote Mr Keyes, who is a professor emeritus of anthropology and international studies at the University of Washington.
By the 1980s, every Isan villager would spend several months to several years working away from home. But even as large numbers of them return to their villages as entrepreneurs like Ying, the stereotype of northeasterners as poor farmers is still being perpetuated through the media, with soap operas portraying them as awkward and clumsy.
Saowanee Alexander, a linguist at Ubon Ratchathani University, said phasa isan is being used less among teenagers as they feel embarrassed to speak the local dialect in the presence of outsiders.
"They are afraid that people will know they are from Isan and that they will be looked down upon," she said. "As a sociolinguist, I am not concerned that [phasa isan] will eventually disappear. But I would care if it disappears as a result of its speakers being marginalised."
THE MONEY MAGNET
In late 2012, a group of Chinese investors planned to set up a 2,000-rai "green industrial estate", but fell short of their goal as land prices skyrocketed. Land prices are now up to 10 million baht per rai on the outskirts of Khon Kaen, some 5-10km from Khon Kaen University.
More than half the BoI-supported projects in Isan are centred in Nakhon Ratchasima, the region's closest province to Bangkok and home of several industrial estates.
Setting up an industrial estate elsewhere in Isan would attract foreign investors, especially those from China, Japan and Taiwan, said Ratanawimon Naree Sukreekhat, the director of the BoI's Khon Kaen office.
Last year, the BoI approved 150 projects worth 78.94 billion baht in the Northeast. This compares to 144 projects in 2012, worth 49.91 billion baht. Services and utilities accounted for the biggest share in terms of investment value last year, with 42 projects worth 49.1 billion baht.
Werapong Siriwon, the director of the BoI's Nakhon Ratchasima office, said projects related to processed agriculture and alternative energy have the highest investment potential. Other high-potential industries include electronics and car parts, especially if the government improves logistics in the region, he said.
The ruling military council recently approved a 2.4-trillion-baht infrastructure development plan, with 11 double-track rail routes. Of those lines, construction is set to start this year and next on six routes totalling 887km. This includes an 185km section between Nakhon Ratchasima and Khon Kaen.
The National Council for Peace and Order has also approved the establishment of a special economic zone in the northeastern province of Mukdahan, one of five given the green light last month.
The zones are expected to help increase Thailand's border trade by at least 20% a year.
But investors have complained about a lack of labour, saying last year's nationwide increase in the minimum wage to 300 baht per day has not stimulated the region's workforce.
Minimum wages in Isan ranged from 226-255 baht in 2012 and 162-189 baht per day in 2011, according to Labour Ministry statistics. Despite the rise, Isan workers are still being lured elsewhere.
"Many northeasterners who have gone to work in the eastern seaboard have decided to stay there as living costs in Khon Kaen, the region's second-largest economy, are starting to climb," Ms Ratanawimon said.
Suthin Wianwiwat, a researcher at Khon Kaen University's E-Saan Centre for Business and Economic Research, said more than half of Isan business operators did not pay the minimum wage even after the increase, claiming they would have to lay off workers. Instead, they made an agreement with employees to pay wages of 250-270 baht while increasing other social benefits.
Because Isan has been portrayed as a poor, dry desert, it is often forgotten that the region has significant mineral reserves, and is a source of hydropower and gas.
In the days since the coup, Chinese oil and gas exploration teams have been sighted by many villagers and test drills are being prepared in Buri Ram.
Khon Kaen businessman Tom (not his real name) considers the war over energy reserves as a theme in this latest episode of what he calls a dictatorship.
"The fact that Isan could quickly become for Thailand what Scotland has become for the UK has — in spite of all the odds — remained a well-kept secret in Bangkok," Tom said.
"Bangkok's elite knows all too well that Isan's energy independence — or more so, Isan becoming the country's largest domestic supplier of energy — will even further encourage its people to demand a larger share of public spending as well as political power."
NOT A ONE-NIGHT STAND
The change in the economy during the past 20 years has caused the emerging lower middle class to become the most important political base, and political parties need to develop new public policies to garner votes from this group.
Moo, 45, from Ubon Ratchathani, said she likes the Pheu Thai Party because of its tangible policies that bear instant results.
On the other hand, the Democrat Party is slow in implementing policies that have little impact.
"Pheu Thai candidates actually talk to villagers and ask them what they want," she said. "It's a long-term interaction, not just something that goes on for one or two months."
Thailand's elections have been races between two major political parties — the Democrats and the various iterations of Thaksin's Pheu Thai — since the 1997 constitution came into effect.
To secure the votes of the emerging lower middle class, who represent 40% of households, the Democrats need to provide them with social security, said Thammasat University's Mr Apichat.
Since a large number of people in this group work in the informal sector, the lack of social security causes them to face uncertainty in their lives, he said.
One policy example would be to focus on the ageing population, who because of a low level of savings face the prospect of running out of money late in life.
"It would be tougher for the elderly to depend on their children for money because families are getting smaller," Mr Apichat said. "So the challenge for the Democrats is whether they could create new policies that are more sustainable than old-age pensions for people over 60 years of age."
But eventually, if the Democrats wish to win votes in the long term, they have no other option but to show the red shirts the party is committed to contesting elections, Mr Apichat said.
Political force: The Northeast has been a red shirt stronghold and the political parties of Thaksin Shinawatra have enjoyed support from the region. photo: Seksan Rojjanametakul