What regime needs to do to strengthen Thailand

What regime needs to do to strengthen Thailand

All leaders have at one time or another fantasised about being freed from the realities and constraints of day to day governing. Think of what could be achieved, they imagine, if we were immune to parliamentary meddling, could tune out the cacophony of special interest lobbying and could silence dissent with the stroke of a pen. Thus unshackled, leaders could focus on the technocratic art of governing: driving economic reform, strengthening critical institutions and tackling challenges made impossibly complex by tangled webs of competing interests. Rule by fiat holds the intriguing possibility of more efficient and effective governance.

Let's take a quick look back to what happened in Thailand 18 months ago.

Due to Thailand's chronic political instability and history of violent civil unrest, many Thais greeted the coup with resigned optimism. At a minimum, the coup offered a respite from political gridlock and a chance to address systemic issues of cronyism, corruption, and special interest subversion of official institutions. Those thinking more boldly were hopeful that a programme of aggressive economic and education reform could address lagging performance and position Thailand for healthy long-term growth. Even sceptical US officials quietly considered the silver lining in the coup, surmising that an autocratic government could decisively tackle human trafficking, reduce corruption and help strengthen intelligence and law enforcement cooperation.

The record of progress over the past 18 months on these and other issues has been decidedly mixed.

Desmond Walton: Hard work ahead

On the plus side, the Thai government has achieved its primary objective: restoring internal peace and stability while setting the stage for an orderly royal succession. It also deserves some credit for taking action against human trafficking networks and imposing accountability on complicit high-ranking officials. While more needs to be done, it is likely that Thailand will have demonstrated sufficient progress to be removed from the State Department's Tier III ranking next year.

The government has also achieved some foreign policy successes. Relations with neighbouring Cambodia, Laos and Myanmar are the best they have been in decades. Thailand is also adeptly managing relations with China and Japan to its benefit, in part by stoking competition for influence and much-needed infrastructure investments.

Even under autocratic conditions, progress on these and other issues requires the full attention and best efforts of senior officials. But the overarching emphasis on strengthening internal stability, largely through policies that curtail political activity and press freedom, has consumed valuable chunks of the government's limited bandwidth.

Until recently, economic efforts appeared fitful and aimless. The government acted to roll back populist policies that were fiscally unsustainable, only to later backtrack. Planning for massive infrastructure investments was halted, then approved, only to become bogged down again in an uncertain fiscal environment. The government spooked foreign investors early with talk of revised investment rules, quickly realised its mistake, and has since pulled out the stops to reassure investors.

Thailand's economic performance since the coup has been dismal. Certainly, the Thai economy, which is closely intertwined with China's, has suffered collateral damage in the wake of China's slower growth. But political uncertainty and the lack of a clear economic reform agenda have also contributed to Thailand's economic underperformance. Foreign direct investment is dropping and GDP growth forecast at 2.5% for 2015 is the slowest in Asean.

Leading the present economic team, Deputy Prime Minister Somkid Jatusripitak has been given sweeping authority with responsibility over economic matters. Notably, his portfolio includes foreign affairs, which reflects Prime Minister Prayut Chan-o-cha's understanding that economic and foreign policy must be synchronised in order to pull Thailand out of its current slump and avoid the long-term stagnation that would result if Thailand gets stuck in the middle income trap. Mr Somkid's plan revolves around the creation of special economic zones to take advantage of low-cost labour from neighbouring states and a programme of substantial incentives to encourage investment in high technology industries.

More needs to be done. Comprehensive education reform must be an integral component of the government's agenda. In fact, it should be the government's highest priority. There is no greater structural impediment to Thailand's future economic prosperity than an underperforming educational system that fails to produce the highly skilled workforce that Thailand requires to move up the value chain.

Thai leaders also need to develop and implement a strategic infrastructure blue print that leverages Thailand's greatest asset: its geographical location at the epicentre of Southeast Asian, East-West and North-South connectivity corridors. Finally, the government should decide about the Trans-Pacific Partnership membership in order to avoid a bleak future where Vietnam becomes the destination of choice for foreign investors in Southeast Asia.

If history and the Thai people are to judge Thailand's autocratic moment as a worthwhile tradeoff -- giving up some civil liberties and political rights in return for strengthened institutions and more robust future economic growth -- then the 18 months leading up to elections in 2017 need to be much more focused on substantive achievements. These are big challenges, but Thailand's current government is well-positioned to act decisively.


Retired US Army Col Desmond Walton was the US Embassy's defence attache and head of JUSMAG until June, 2015. He previously served as the director for Southeast Asia in the US National Security Council.

Desmond Walton

Former US National Security Council

Retired US Army Col Desmond Walton was the US Embassy's defence attache and head of JUSMAG until June, 2015. He previously served as the director for Southeast Asia in the US National Security Council.

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