The so-called “super deal” in August that resulted in the return of Thaksin Shinawatra and the formation of the Pheu Thai Party-led coalition government under Srettha Thavisin evidently has its limitations. It appears to be rejected by sections of the conservative old guard who still wants to resort to extra-parliamentary ways and means to undermine Thailand’s delicate parliamentary democracy. Reminiscent of past protests against Mr Thaksin’s brand of populism, a new round of extra-parliamentary political movement has begun in earnest with the petition launched by 99 prominent economists, including former central bank governors, against the Srettha government’s 10,000-baht digital wallet policy.
To be sure, the Pheu Thai party’s latest populist drive is controversial and problematic. The policy is to hand out 10,000-baht digital money totally some 560 billion baht to Thais who are 16 years and older to be spent within 4 kilometer radius of where they are domiciled according to their national ID cards.
The aim is to promote domestic consumption with multiplier effects, thereby stimulating demand and boosting economic growth. The problem is that the planned multipliers are doubtful owing to a range of limiting factors, from high household debts to the increasingly monopolistic retail industries that stand to benefit from grassroots expenditures.
Many consumers may find ways to pay down the interest and/or principal of what they owe rather than spending away the 10,000 digitalised baht. Big conglomerates, instead of micro and small to medium businesses, are poised to reap the lion’s share of consumer spending. The knock-on effects the government hopes to achieve are thus likely to be constrained.
In their petition, the 99 economists have called out the flawed logic of this profligate populist ploy to please people and win votes at the expense of fiscal discipline. They have argued that the policy will not work and instead will further jack up public debt towards 70% of GDP, having already breached the traditional psychological 60% threshold which has earned international plaudits for Thai fiscal management in the past.
But the premise of these economists is misguided and questionable. When the preceding governments under Gen Prayut Chan-o-cha let loose fiscal purse strings to the tune of more than 300 billion baht in deficit spending annually over the past nine years (five under military rule and four after the 2019 election), some of these economists hardly raised an objection. It was under Gen Prayut’s helm that Thai public debt broke the 60% of GDP barrier. In addition to racking up debt one year after another, Gen Prayut’s governments also set record discretionary funding within annual budgets upwards to 600 billion baht in certain fiscal years, more than the Srettha government’s digital wallet spree. This discretionary part of the budget during the Prayut era is still not fully accounted for.
Unsurprisingly, a simple Google search would reveal that many of these 99 economists overlap with those who lined up behind the anti-Thaksin People’s Alliance for Democracy in 2005-06 and 2008 as well as the People’s Democratic Reform Committee in 2013-14. Each instance paved the way for a military coup or a judicial intervention to depose democratically elected governments. In the earlier period, the supposedly anti-corruption and anti-populism experts were against the 30-baht universal healthcare coverage, and later against the rice-pledging scheme. Whatever populist policies the Thaksin-aligned governments came up with, they would oppose on the grounds of fiscal profligacy and intoxication of the masses.
It is no coincidence that these economists limited their number to 99 – rather than, say, 110 – to make their statement. The hidden message is the association of the Ninth reign with virtuous rule whereby corruption and abuse by elected politicians need to be checked and countered by “good and capable” people who are not elected.
The hypocritical result is that discrediting and destabilising elected governments for abuse of power led to a similar outcome by appointed governments and leaders who also were hounded by graft and mismanagement allegations.
In other words, the unelected and appointed officials and rulers that came with military coups and judicial interventions were no less dirty fundamentally, with similar conflicts of interest and abuses of power. On top of it all, under Gen Prayut’s autocratic period, the Thai economy went nowhere while political polarisation persisted. The lack of economic opportunities and a democratic future is the reason younger Thais protested in 2020-21, only to be dispersed and persecuted by officialdom.
The extra-parliamentary movement to stymie and subvert democratically elected governments must stop. This is not to deny that Mr Thaksin and his associates had conflicts of interest and corruption. In fact, his corruption sentence of eight years has been royally pardoned and reduced to one year. While he was in power in 2001-2006, Mr Thaksin did have an autocratic streak despite winning massive election victories but his government also had ideas about how to promote growth and put Thailand on the map. In hindsight, Thailand’s peak as a regional geopolitical player with economic dynamism that attracted global attention took place around 2002-04. Since then, signs of political decay and economic stagnation have increased as traditional institutions are less respected and growth momentum has plateaued with downside risks.
Thai voters should have the final say on government performance. As Pheu Thai party campaigned on the 10,000 baht digital wallet policy, it should be given a chance to prove itself. The policy looks and appears flawed but it is a campaign promise. Had the opposition Move Forward party took office as the largest poll winner in May, its progressive policies of wage and salary increases, too, would be opposed by conservative types who keep yearning for the illusion of a “good” and “virtuous” morality-based political order.
It is time to protect and promote the fragile return to democratic rule based on the people’s mandate. In the latest national election, Pheu Thai came in second to Move Forward, but the power plays and political machinations have enabled it to form and run a government that includes pro-military parties in a kind of civil-military power-sharing deal. The Pheu Thai party-led government deserves a shot because the military-conservative alternative, as we have seen time and again, is worse in both denying democratic rights and running a subpar economy with unaccountable conflicts of interest and abuses of power.
Thitinan Pongsudhirak, PhD, is professor at Chulalongkorn University's Faculty of Political Science and a senior fellow at its Institute of Security and International Studies.