Engine failure

Engine failure

Prime Minister Prayut Chan-o-cha and his regime have performed the predictable result of turning a so-so economy to muck. (Reuters photo)
Prime Minister Prayut Chan-o-cha and his regime have performed the predictable result of turning a so-so economy to muck. (Reuters photo)

The green shirts last week got what they came for back in May 2014. While happiness was returned to the National Council for Peace and Order, it became unclear how long it will last.

There are tough days ahead for Prime Minister Prayut Chan-o-cha and allies. His regime has performed the completely predictable military trick of turning a so-so economy into muck -- the downfall of the last military regime.

This has occurred at the exact time the military men were figuratively getting deeply into their champagne stocks to celebrate the biggest achievement of their lifetimes.

Industrial production is now at 0%. Exports for October dropped 4.2% year-on-year, and fell a little over 1% for the first 10 months of 2016 compared with last year.

The Bank of Thailand reported personal spending plunged like a rock following the death of King Bhumibol, down 5.5% for the month and now at the lowest level since the great flood five years ago.

There's not a happy figure in the data set. Consumer debt rose during the month from 3.78 trillion baht to 3.81 trillion. Consumer confidence fell again. Retail sales, up 4.3% in 2015, rose 3.2% this year. Even fuel prices went up. Industrial production dropped 0.6% when every "expert" predicted it would rise 0.75%.

The New York Times took 1,060 words under the headline, "How to save the Thai economy" to say: Devalue the baht and raise farm prices. Great. Remember the last time the government tried to control the currency exchange rate? In 1997? And caused the Asian recession?

The government and the new Ministry of Truth said for the third straight year that "next year" would see economic recovery.

On the other hand, the aerobics classes are going well.

The question is whether that's going to be enough to achieve the Master Plan, which is to turn the 18-month-old military coup into a military-led authoritarian government called "civilian" because of the plausible deniability offered via a sanctioning election.

It has been eight years since the semi-capable coup chief of 2006, Gen Sonthi Boonyaratglin, handed power to a civilian government just before people on the street could snatch it from him. When everyone starts feeling economic pain, even a heavy-handed military regime has to adjust or depart. And the central bank cracked the door to that possible scenario last week.

The Bank of Thailand showed proudly it retains independence and doesn't whistle happy songs on command. Its top expert said starkly that Gen Prayut's own policy broke the last economic engine that was still humming in the Thai economic boiler room: tourism.

Every day for two months, Thai and Chinese airlines and charter firms have cancelled 30 or more flights -- 18,000 tourists a day, a quarter of a million a month. Don Nakornthab, senior director of the Bank of Thailand's macroeconomic and monetary policy department, pinpointed the unique reason for this massive loss of tourists, income, jobs and taxes -- the prime minister's personal decision in August to attack firms running so-called "zero dollar" tours.

The "tourist engine" was the only part of the entire economy working well. Now, "It would seem like Thailand could lose one of its economic engines", according to Mr Don.

Literally within hours, the junta's own Gen Tanasak Patimapragorn and his National Tourism Policy Committee confessed that, well, yes, Thailand won't actually meet the tourism target this year after all. For example, 10 million Chinese were supposed to come, only 8.8 million will make it. Then, in a classic panic, authorities waived all visa fees for all nationalities for the next 90 days.

Last week Wikileaks released yet another secret cable from the US embassy to Washington on the Thai political situation. It noted that while the prime minister has said he will not run in the coming elections, his new constitution allows for an unelected leader. And "he is considered the best of the military men available".

The leaked US cable continues: "Overall, he does not appear to face any serious obstacles to staying in office as prime minister after the elections." High praise indeed from the "neutral" political officers of the US embassy -- in 1979, when the report was written about Kriangsak Chomanan. He lasted just nine months after the upbeat, diplomatic hagiography.

It has been a great week for Gen Prayut, no doubt, the achievement of a career. Still, past performance is no guarantee of future success, a rule many military leaders of the past, including Kriangsak, discovered the hard way.

Alan Dawson

Online Reporter / Sub-Editor

A Canadian by birth. Former Saigon's UPI bureau chief. Drafted into the American Armed Forces. He has survived eleven wars and innumerable coups. A walking encyclopedia of knowledge.

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