I would like to make a confession. I committed a sin for half a year from about December 2013. I am about to commit another sin, that is to be involved in politics, so I need to make a confession.
What was my original sin? I wanted to see a coup d'etat. I wanted to see the military take over.
To me, thinking like that was a sin.
According to my professional upbringing, I was raised with the ideal of democracy. Fifty-one years ago, I learned the politics of democracy at Chulalongkorn University's Faculty of Political Science. Then in Australia, I learned the English history of the Tudors, the Stuarts, Oliver Cromwell and the fight between parliament and the palace.
In the US, at JHU, I learned about the American War of Independence of 1776. The Boston Tea Party and the idea of no taxation without representation, no legislation without representation.
I should also mention the French Revolution from 1789, swaying back and forth from absolute monarchy to representative government. The ideas of liberty, equality, fraternity.
Why did I have that sinful thought of wanting the the military to take over the country? Because political conflicts were growing out of control, with sporadic violence and casualties.
The economy was getting more and more disrupted and it was getting serious. And democratic solutions by means of a general election were fading away.
Then we had the coup on May 22. In retrospect, that sinful thought occurred to me many times before. There are reasons for this, both political and economical.
When it comes to politics, Thailand has not achieved a stable political system since the move to a constitutional monarchy in 1932. We were given the ideology of democracy at that time. We were led to believe in the principle of representative government. As mentioned before: No legislation without representation; no taxation without representation. Such are the ideals of democracy.
Since then we have been alternating between bureaucratism, militarism, democracy and capitalism, populism democracy, or the combination of all. At times in the past we had a coup to affect the changes. We have had two forces at work, market forces and social forces. The market forces were driving for growth, while the social forces were for equity. We thought democracy should be the solution. But there are differences of opinions, in terms of priority.
Some want democracy with accountability. Others give higher priority to democracy with opportunities, to share in power and resources. We have tried to develop a system that would deliver both. Apparently we have failed. And it just happened that when the military intervened we could see changes that were good for the economy.
We achieved industrialisation in the 1980s under governments with military involvement, following the coup of 1977. We began the process of globalisation from 1991, after the coup of that year. The longest time that fully elected governments lasted was from 1993 to 2006. The political design was to have elected governments with functioning governance. But that was not achieved.
There was a coup in 2006. And after that, representative governments from 2008 to 2013, again the military took over the country on May 22 this year, at the same time trying to implement major reforms.
So it seems we have lived with the burden of ideology (of democracy) without the luxury of choices.
Such an unstable political system has affected the long-term investment plan for the country, hitting sustainable growth. Over the past 15 years, GDP growth rates have fluctuated from about 2% to 7%, most years averaging below 5%. What we achieved was the only way the economy could function. From 1960, we adopted a market economic system. We continued to open the economy, and to integrate with other economies, particularly neighbouring Asian countries and the Oceania.
Our foreign trade volume of goods and services now stands at about 1.4 times GDP, or about $560 billion (18 trillion baht). Foreign investment including FDI & PFI are substantial.
And tourist arrivals now number about 27 million. Because of political conflicts, growth this year is expected to be about 1.5–2%, due to negative growth during the first half of the year.
Prospects for the future look better now.
With the political conflicts being managed by strong persuasion (and seduction), and the promise of reform on most areas as demanded by all parties, we can expect first more efficient decision-making, particularly concerning investment.
The military-supported government, which will be in office by September, is expected to follow the same market economic system, open to foreign participation and competition in trade and investment.
We can hope the government will begin the process of transforming the economy towards more value–added economic activities, and more integration with neighbouring economies, particularly the Greater Mekong Sub-Region (GMS), Asean and East Asia.
This direction is necessary because of the shortage of labour and energy resources.
The transformation can be achieved by investment in a new learning and production paradigm relying more on digital technology, and new generation infrastructure that would provide connectivity with the neighbouring countries, and reinforcing domestic connectivity.
Such infrastructure would allow many major cities around the country to grow, and become a new growth engine of the economy.
For digital technology, major reform and reorganisation is needed. Another area with priority for reform is the labour market, particularly migrant workers.
Supply and demand for migrant workers creates a big market, and also opportunity for exploitation.
We need a system which minimises exploitation, and satisfies the security concerns of the military.
Finally, the country cannot achieve sustainable growth without fiscal sustainability. Major tax reform is on the agenda, together with the reform of state enterprises particularly the ones which make a loss.
Thailand, like any other developing country, needs more sustainable growth so the people can live a better life.
Ideally, this should be achieved under the system of representative government.
What is more important is a system of good governance. Unless we operate with good governance, we will continue to encounter political and economic instability. I do not want to commit another sinful thought in the near future.
Narongchai Akrasanee, PhD, is former minister of commerce, senator, and financial adviser to the National Council for Peace and Order. The speech entitled 'The Macroeconomic Impact of Thailand's Military Intervention' was given at an ISIS Public Forum on July 23.