For a long time, many commentators in Thailand argued that the massive inequalities in our society did not matter. That has changed. Our fierce political conflict has done that. In fact, income inequality _ the gap between rich and poor _ has improved slightly over the last decade, but it has improved very slowly and is significantly worse here than in neighbouring countries.
Why is disparity worse here, and why is it so persistent? The answer lies in our politics.
Despite economic growth, massive social changes and political innovations like parliament and decentralisation, real power still lies in the hands of small groups of people who run things in the dim background. It's a kind of oligarchy (rule by the few) or at least an oligarchic tendency in our institutions.
But it's not a static oligarchy. Rather it's very dynamic and flexible, constantly changing to co-opt new sources of influence. Consider the story over the past century. First there were the traditional nobles. Then came the modern bureaucrats, the military high command, the technocrats, the provincial businessmen in politics, and recently the judiciary. Each time, the oligarchic system survives by its ability to incorporate new sources of influence by networking, co-option, and sharing of benefits.
Research done recently by our team throws light on three examples of how this process works.
The first concerns the energy sector. In the crisis of 1997, the banks and conglomerates that used to dominate the national economy were knocked sideways. In the aftermath, two massive semi-public, semi-private combines have become two of the biggest players in the economy. The Petroleum Authority of Thailand is owned 51% by the Finance Ministry, and the Electricity Generating Authority is owned 100%. So they are state enterprises. But each of them has spawned numerous subsidiary companies which enjoy the best of both worlds _ public and private.
As state enterprises, they have the Finance Ministry as loan guarantor, the Attorney-General as their representative in the Administrative Court, and the Council of State as their legal adviser. As private companies, they enjoy investment incentives and exemptions from rules and regulations on salaries and profits in state enterprises.
A board member, for example, can expect to take home 1-3 million baht a year.
This half-half existence gives them unfair advantages over any rivals. Many of their board members are high-ranking officials, serving or retired. Moreover, if you scan the lists of board members in these various companies, many names recur. And the same names turn up on bodies involved in decision-making and governance in the finance, energy, transport and communications, natural resources and environment ministries. Conflict of interest is inevitable.
Two years ago, civil society groups tried to halt industrial expansion around Map Ta Phut where pollution has long been a serious health threat. At first it seemed that this challenge might be a landmark in the balance of power between corporations and communities. But in the end, matters were "arranged" and nothing much changed. This is the oligarchic tendency at work and it comes at the expense of social well-being.
The second research study concerns local politics. Decentralisation has transferred significant sums of money from the central ministries to local government bodies. Following this trail, there has been a trend of MPs transforming themselves into heads of local government bodies. And around them have appeared new and very powerful networks.
The former MP still has his network of canvassers, local godfathers and construction contractors that helped him win the local election and then benefit from the distribution of contracts and other largesse.
He (and sometimes she) also builds close relationships with local government officials who are willing to participate in an exchange of favours. On top, he finds relatives or close friends to stand for election to parliament and the senate. The result is a network that stretches from Bangkok down to the locality, with influence in national politics, provincial officialdom and local government. This pattern is emerging in province after province.
The third piece of research is about quasi-academic alumni networking.
Many decades ago, the army began offering courses to officials, businessmen, and others to increase understanding of the military's role, and to build networks of contacts. Recently, many institutions have copied this model. They include the stock exchange, Chamber of Commerce, judiciary and parliament.
The pattern of all of them is much the same. They have an institute that offers part-time courses lasting up to a year. Besides the classroom work _ which is not so onerous, and not the real point _ these institutes orchestrate many bonding activities such as dinners, karaoke sessions, golf outings and overseas study trips.
Most importantly, they have an alumni club that maintains the bonds and builds links across classes of different years. They seed the classes by inviting prominent figures from different areas of influence _ permanent secretaries, generals, judges and executives of top companies. Other people then press to get accepted into the class to build contacts in this celestial arena.
The class lists show that many people have attended classes in several of these institutes. According to the model established by the military's model version of this scheme, alumni are bound to help one another.
Our oligarchy is sustained by these creative forms of innovation in business, politics and education. The disparities in our society are diminishing very slowly, and in part that is due to the entrenched oligarchic tendency and its extraordinary flexibility in the face of change.
It is very difficult, for example, to think of a progressive property tax or capital gains tax being adopted because of the strong resistance from the groups at the apex of the political structure.
In other countries, oligarchic political structures have been eroded by the process of democratisation, decentralisation and the works of social movements, including trade unions, environmental movements and protest groups. But we seem to have a long way to go.
Pasuk Phongpaichit is emeritus professor at the Faculty of Economics, Chulalongkorn University.