In Thailand, No Shortage of Support for Reform

BANGKOK —  Thailand’s political protests have been marked by vague demands for government reform. Economists also say the country’s future growth depends on passing significant political and institutional reforms, but neither the ruling party, nor the opposition are likely to implement them.

Thailand has enjoyed a remarkable economic rise in recent decades largely from free-trade policies and foreign investment that used the country’s cheap labor to build products for export.

In 1988, more than 40 percent of the population lived below the national poverty line. By 2010, that had fallen to less than 8 percent.

This growth led to dramatic political changes in rural Thailand, as wealthier voters deepened their engagement in the country’s political process. The ruling Pheu Thai party has leveraged the trend for a string of victories at the polls. Their opponents, the Democrats, backed by voters in Bangkok and southern Thailand, continue to lose ground.

"In the north and North East and other parts of the country general elections and democratization brings more tax money to their locality - so they want to continue with the one-man, one-vote system," said Pasuk Pongpaichit, an economist at Chulalongkorn University and co-author of a new Asia Foundation report on Thailand’s economy.

"Whereas these people [in Bangkok] are saying that 'we don't want a government that comes from a one-man, one-vote [system] - we want an alternative which would allow us to have bigger representation - and this is part of the big problem," she added.

The rural-urban split is frequently used to explain Thailand’s political divisions. But economists say there is also an income disparity that persists despite the country’s impressive economic growth.

"The underlying problem is that we are a highly unequal society and the people on the top have been so used to being able to reap all kinds of benefits from the government expenditure and policies," the economist said. "So that created a reaction when democracy started to work. This paper is only an attempt to address how economic inequality leads to other kinds of inequality and which could affect economic growth adversely, particularly on the quality of education and on the issue of wages."


Thailand’s ruling party has been heavily criticized for a rice pledging scheme that guarantees high prices to farmers, costing the government billions of dollars. But most government funds are still spent in the capital.

The World Bank estimates that in 2012, Bangkok accounted for 26 percent of Thailand’s gross domestic product, but it received more than 70 percent of government spending.

The Asia Foundation's chief economist, Veronique Salze-Lozac'h, says decentralizing power and spending funds more wisely on core needs like education will require political reforms.

"The economic reforms that need to be taken up are pretty well known," she noted. "But it's not happening mainly because of some political blockages. It's really how to integrate different actors of the economy in the decision-making process."

Since Thailand’s recent protests erupted, a wide range of groups, including the prime minister, have proposed reform measures. Some proposals, such as greater government transparency and a crackdown on vote buying, appear to have broad public support.

But economist Adam Burke says deeper structural reforms, such as decentralizing power and giving more independence to local governments, face resistance in both the ruling party and their opponents, which continue to be controlled by small groups of wealthy backers.

He says the influence of these groups is felt in the current protests gripping Bangkok.

"It's awfully polarized into these two patronage groups with very, very narrow elites in charge on both sides," Burke said. "And while at the moment no side is interested and has inclinations towards being violent, that can shift fast and things could get very nasty, very rapidly."

No matter how Thailand’s current political impasse gets resolved, economists say reforming the power structure of Thailand’s political parties will be key to building a wealthier and more inclusive society.