Business Associations And The New Political Economy Of Thailand

From Bureaucratic Polity To Liberal Corporatism

Anek Laothamatas

• Publisher: Taylor & Francis
• Year: 2019
• Print ISBN: 9780367016340
• eBook ISBN: 9780429722707
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Asian Politics
• Index: Politics & International Relations

This book provides detailed empirical data regarding chambers of commerce, their peak organizations, and trade associations of Thailand that has moved away from a pure form of bureaucratic polity to liberal corporatism.

1
Introduction

With careful diplomatic maneuvering, vigorous administrative and economic reform, and a certain degree of luck, Thailand remained independent throughout the era of Western colonialism. Thai modern political history began in 1932 when the ancient royal rule was toppled by a group of Western-educated, middle-ranking military and civil bureaucrats. While these officials staged a “revolution” which aimed to install a democratic constitutional monarchy,^a in reality the post-1932 regime succumbed rapidly to the rule of military governments or civilian governments which had to rely heavily on the approval of the armed forces. During the four decades that followed the revolution, most premiers and cabinet ministers were serving or retired bureaucratic leaders—civilian or military—rather than professional party politicians.

In fact the bureaucracy was so dominant in politics and policy-making that Fred Riggs^b identified the Thai political regime as a “bureaucratic polity.” Such a polity, Riggs argued, was neither a traditional nor a modern system. Unlike a traditional system, it developed a wide range of differentiated bureaucratic structures. Unlike a modern political system, it failed to create a nonbureaucratic mechanism to place accountability on the bureaucracy.¹ Neither a single official party along the lines of modern totalitarianism, nor competitive parties and interest groups along the lines of a modern polyarchy, arose to place effective control over the bureaucracy. Meanwhile, though Thailand has shared several features with authoritarian regimes commonly found in the Third World, not all kinds of modern authoritarianism are bureaucratic polities. There are several cases in which authoritarian regimes are led at the top by official mass-mobilizing parties or charismatic leaders, not a military-bureaucratic elite which has risen to power through successful coups or the support of the politicized army.

At the heart of the Thai bureaucratic polity was the weakness of extra- bureaucratic forces, be they governmental actors (such as the monarchy, the judiciary, and the legislature) or nongovernmental actors (such as social classes or groups). Of particular interest is the political passivity of the bourgeoisie or business class. If the society-centered model of Western industrialization and democratization may give any clue, one should expect that the business and middle classes would inevitably aspire to national leadership or at least try to force the government to become more responsible to their interests. This, however, was far from the case in the heyday of the bureaucratic polity. The explanation for the disjunction of wealth and power is to be found at least in part in the ethnic composition of the business community of Thailand.

Most of the local entrepreneurs in Thailand were ethnic Chinese. During the late 1940s and early 1950s, for example, ethnic Chinese accounted for 70 percent of “large” and “smaller” business owners or managers in Bangkok.² Their vulnerable foreign status aside, these businessmen came largely from a humble peasant background and had received little formal education. Worse yet, during the 1940s and 1950s they were confronted with nationalistic-minded governments. For all these reasons, ethnic Chinese businessmen chose to affect public policy in a covert and particularistic fashion, and their effect was felt chiefly in the implementation, rather than the formulation of government policies. To exert influence on government policy-making, businessmen typically gave bribes or nurtured “clientelistic” relationships with bureaucratic leaders by inviting these people to join their executive boards. As late as 1972 twelve of sixteen commercial banks in Thailand, for example, still had military or political leaders on their boards of directors.³

Contrary to the belief of several scholars and practitioners about the peculiarity of Thai politics, Riggs from the beginning held that bureaucratic polity was by no means unique to Thailand. Developing polities in general, he observed, were marked by “the lack of balance between political policy-making institutions and bureaucratic policy-implementing structures… and the weakness of their extra-bureaucratic political institutions in contrast with the burgeoning growth of their bureaucracies.”⁴

Riggs’ observation has been confirmed by the works of several other analysts. Writing a decade or so later, Karl Jackson and John Girling held that Indonesia could also be viewed as a bureaucratic polity.⁵ Though not using the term “bureaucratic polity,” Hamza Alavi, a prominent neo-Marxist author, asserted that unlike the historical Western bourgeois state, the post-colonial states of Pakistan and Bangladesh have been characterized by strong military-bureaucratic oligarchies which are relatively independent of the ruling classes—the international bourgeoisie, the local bourgeoisie and the landed class.⁶ Finally, Peter Evans, a leading scholar of the “dependency” approach, noted that during the mid-1970s Brazilian politics was in fact an affair limited to the bureaucracy. Even the dominant factions of the bourgeoisie in that country, according to Evans, “were not in a position to shape state policies systematically or control the actions of the central bureaucracy.”⁷

Certainly, the bureaucratic polity, according to all the above accounts, is not a phenomenon exclusive to Thailand. However, the country is a classic case par excellence. Whether electoral activities were allowed or not, the military-bureaucratic elite heavily dominated the Thai political scene. The best illustrations are that, of the 174 men who served in all cabinets of Premiers Praya Pahon and Plaek Phibunsongkram between 1933 and 1944, when electoral activities were allowed, only five were nonbureaucrats;⁸ of the 85 men serving as cabinet ministers under Sarit Thanarat and Thanom Kittikachorn between 1959 and 1973, when electoral activities were largely banned, only five had a business background.⁹ The political dominance of these bureaucrats was in part a result of the military coups which have taken place probably more frequently than in any other nation. Between 1932 and 1973 there were fourteen coup attempts; on the average, one coup was struck every three years.^c

It must be quickly added, however, that the Thai bureaucratic polity was also founded on the distinctive political apathy of the populace. Historically there had been no foreign colonial rule in Thailand to provoke a nationalist movement, which in much of the Third World provided the ground for popular political participation after independence. Tellingly, the overthrow of the absolutist monarchy in Thailand, something comparable with the struggle for national independence in most of the developing world, was the work of but a handful of military-bureaucratic leaders. As late as the 1950s when much of the Third World was thrown into the fire of mass-based nationalist, socialist, or democratic movements, a Western journal had this to say about Thailand:

The contented Siamese, traditionally uninterested in politics and with an ingrained talent for obedience, have never shown the slightest desire for democracy—a phenomenon disconcerting to well-intentioned Western visitors. If they are now to enjoy the benefits of democracy, it is clear that these will have to be imposed from above.¹⁰

The Bureaucratic Polity Outgrown

Valuable as the bureaucratic polity model may have been for elucidating the political experience in the first four decades following the 1932 revolution, Thailand in the 1970s began to outgrow it. The dramatic economic development of the last three decades has spawned extra- bureaucratic forces that can no longer be denied. During the period of 1965–1980 Thailand enjoyed an average annual GDP growth of 7.2 percent.¹¹ Between 1965 and 1988 the Thai average GNP per capita grew 4 percent annually; of the 122 countries reported by the World Bank in 1990 only ten outranked Thailand in this respect.¹² Over the 1965–1988 period the share of agriculture in GDP declined from 32 percent to 17 percent, while that of manufacturing increased from 14 percent to 24 percent.¹³ Even more prominent was the increase in the share of manufacturing in total exports which jumped from 5.5 percent in 1970 to 30.1 percent in 1980.¹⁴

Presently Thailand is classified by the World Bank as a lower middle income country. With a population of 54.5 million, its GDP of US$ 57.9 billion in 1988 was the twelfth largest of the 96 low-income and middle- income countries of the world.¹⁵ In the whole of South and Southeast Asia only India (with a population of 815.6 million) and Indonesia (with a population of 174.8 million) had larger GDPs than Thailand.¹⁶ On a per capita basis, the Thai GNP in 1988 was US$ 1,000, which was higher than that of Nigeria, Egypt, and the Philippines, but lower than that of Peru and Turkey.¹⁷

While agriculture still employs close to 70 percent of the country’s work force, since fiscal year 1984–85 the share of manufacturing in the GDP has outstripped that of agriculture.¹⁸ On the whole the Thai economy is now relatively balanced in terms of sectoral distribution as illustrated by the fact that rice, textiles and tourism have been the three largest foreign exchange earners of the country in recent years.

Since the middle of the nineteenth century, under pressure from Western powers at the beginning, Thailand has followed a capitalist path to development. Recently, the country has had one of the lowest government expenditures as a proportion of GDP among the developing economies of the world. In 1988 the Thai central government expenditure was about 16.4 percent of GNP, which was smaller than that of Malaysia, Indonesia, and Brazil.¹⁹ Thailand’s public investment during the 1980–1988 period was about 33 percent of total investment, about half that of Turkey (68 percent), Egypt (65 percent) and Argentina (58 percent).²⁰

The predominance of the private sector in the Thai economy may be demonstrated also by the fact that in 1979 only nineteen of the 100 largest enterprises (in terms of assets) were government-owned, and these nineteen held only 36 percent of the total assets.²¹ In comparison, in the early 1980s as many as 47 of India’s top 100 enterprises (in terms of capital) were government-owned, and these organizations accounted for 76 percent of the total capital assets of the 100 largest enterprises.²²

Thailand since the 1960s has actively encouraged foreign private investment. During the 1977–1981 period foreigners undertook about 30 percent of the gross fixed capital formation of the country.²³ Among the top 100 enterprises in Thailand, 29 firms were owned by multinational or foreign corporations. Japanese and Americans have been the two most important foreign direct investors. During the 1960–1977 period, for example, they held about half of the total foreign investment in Thailand.²⁴

In this development milieu, some nonbureaucratic political forces have emerged. First were the college students. In 1973 they led a popular uprising that brought down a military regime which had been in power for sixteen years. This event was followed by years of political turmoil. The democratic regime which succeeded the deposed military regime was short-lived. Fearing the increased activism of left-leaning students, in 1976 the military seized power and ruthlessly suppressed the student movement. However, the repressive government that came into being as a result of the bloody coup could not return the country to authoritarianism for long. Within a year, amidst widespread resistance from the educated urbanites, it was deposed by yet another coup. The succeeding regimes thereafter recognized the need for power sharing with nonbureaucratic forces.

The most enduring post-1977 regime was that of Prime Minister Prem Tinsulanond, which lasted from 1980 to 1988. Prem’s regime may be regarded as a “semi-democracy.”²⁵ ...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Tables and Chart
• Note on Currency
• Preface
• Dedication
• 1 Introduction
• 2 The Rise of Organized Business
• 3 The Principal Associations
• 4 Associations and the JPPCCs
• 5 Associations as Interest Groups
• 6 The Economic Role of Associations
• 7 Liberal Corporatism: The Thai Model
• Epilogue
• List of Acronyms
• References
• Studies of the East Asian Institute
• About the Book and Author
• Index