Chris says it all

Substitute "PAD" for "Republican" and "UDAD" for "Democrat" and Chris Rock gives the perfect analysis of the current mess in Thailand.....

A few thoughts and questions

Photo from nationmultimedia.com

It's hard for me to comment on the ongoing crises as so many other bloggers do it much more promptly, often I would be simply recycling their own links and comments. That's why I tend to stick to longer, more thoughtful blogs where I can at least add my own considered opinions into the matter.

It seems to be a generally accepted fact in Thailand - even more so than elsewhere - that politics is played out behind the scenes, while the general public just get to see small parts of the script. Whilst there seems to be a large debate concerning excessive police force and the possibility of grenades being used, I see this as - in one sense at least - specious.

Don't get me wrong, I abhor violence and violent people. Yet the fact is this - the protesters knew what was coming. They had been warned and they responded by surrounding themselves with arms and security guards. Regardless of whether the PAD are right or wrong, the fact is they knew that their ideology and demands meant they had to challenge the police and receive a police response. Still, the guy who drove that car at the policemen should be locked up.

A more intriguing question for me lies in the thoughts and actions of General Chamlong. Nobody can doubt he knew he would be arrested but what were the circumstances? Were the police tipped off (if so, by which side?) or did they follow him? Did Chamlong strike a compromise? Did he even want talks with his long term acquaintance Chavilit to be successful? Did he want the PAD response to be violent? Did he expect so much bloodshed?

Thai politics is always a complex, tortuous affair, but it seems to be particularly exacerbated by intrigue right now. Yet throughout the twists and turns, I struggle to disagree with the person who observed that it boils down to a struggle between just two people. Yet even if we can accept such a simplification, my mind echoes with an even greater thought: what are their children thinking?

Reforming Thailand's Politics: an evening at the FCCT

The FCCT event was entitled "Reforming Thailand's Politics".

Before the night started, I overheard a discussion involving a colleague of Jonathon Head and discussing the recent charges against him. As it was personal, I will not discuss the conversation but it made me feel very sad for a number of reasons.


The night started with JH introducing the speakers:

- Kasit Piromya, former Ambassador to Washington and Tokyo, and now a supporter of the People's Alliance for Democracy. Also a Democrat shadow cabinet minister.

- Korn Chatikavanij, Deputy Leader of the Democrat Party

- Chris Baker, author and lecturer on Thai politics


JH invited each speaker to discuss their views on the PAD and the proposals for new Thai politics.

(My usual disclaimer and a note: I am not a journalist, I can't do freehand. For the sake of clarity I have paraphrased and edited out less interesting parts of the discussions. Also note that tonight's forum was particularly unfocused and verbose at times from both the speaker's and the questioner's sides. If speakers seem to jump from topic to topic and be a little disjointed, it's not just my editing to blame, that's how it happened)


Kasit: "I'm impressed that so many Americans are here supporting democracy. After all, their own government can design a totally fake war and keep it going while their economy collapses as their regulators look the other way." (Murmurs from the audience).

"We would like to see a Thai model based on the Finnish model of politics or even the Chinese or South Korean models. The Democrats are the closest we have in Thailand."

"New politics is coming to Thailand and everyone should be represented, including hill tribes, disabled people, poor people and others."

"Some of our ideas for new politics include the concept that anyone can take a complaint to court without having to go through police or other civil servants. There should be complete press freedom in a similar style to the German model, however the monarchy is above politics and should never be discussed negatively."

[How can he advocate both 'total' press freedom and having a monarchy above politics?]

"Police chiefs should be regionally elected and under the jurisdiction of a local governor.The Ministry of Interior would be downsized. De-centralisation would be made more powerful under new politics."

"All parties and their candidates must sign a code of conduct agreement. They must promise their candidates try to control local mafia bosses and serve the people. Any breech of the COC would result in automatic disqualification for the candidate without the need to wait for a court decision."



Korn Chatikavanij: "The Democrats have come under pressure especially here [at the FCCT] for allegedly not being vocally opposed to the coup. Some people have suggested that the PAD are undemocratic purely because they took Government House. I think this view is narrow minded."

"I believe there is a consensus that change is needed in Thai politics.. The PAD's 70/30 proposals [that politicians should be 70% selected by an official body and 30% elected by popular vote] seemed unpopular, now they have a 50/50 proposal, I wouldn't necessarily oppose this."

"My party want both the lower and upper houses to be one hundred percent elected. I personally oppose this. If both houses are fully elected, you will get the same type of people in both houses. Often they will be related, literally. I would like the upper house to be scrapped. I understand there is debate on this in the UK, and nobody accuses them of being undemocratic."

[I think he's referring to a debate on upper house reform in the UK, I'm not aware of any debate for upper house abolishment, which would be a terrible idea].

"Compromises on the electoral system can happen and don't have to be undemocratic, it could help democracy by pushing a free press, etc."



Chris Baker: "Kasit makes 'new Politics' seem so exciting,but I want to know: how do we establish the legitimacy of all this? Moves such as scrapping the MOI are big moves, how do we give authority to such a move?"

"The other speakers talk of a consensus, we all know there are very few consensuses in Thailand right now. The opposition against 'one man one vote' (OMOV) is nothing new, it is an old idea. We should also be careful when discussing 'middle class' , it is hard to define 'middle class' in Thailand.

"These days, people are more politically educated thanks to moves by the Chuan government and TV. "

[I disagree with him there]

"Some people either don't understand or fear the growth of a mass electorate. Vote buying does not explain why people get elected. People do consider the candidate. Buying politicians is a far bigger problem than buying votes, and Thaksin massively increased the budget for buying politicians."

"A genuine crises is coming. In the past we had The Democrats as a reasonably liberal party on one side, on the other side we had the old 'godfather' parties. There was a real difference in ideology. Then came Thaksin with a philosophy of 'me as leader and no need for human rights , democracy or opposition' etc. This idea did have some appeal. The Democrats' response to this new philosophy is to support a group that - however much they talk of democracy - really boil down to hitting people with golf clubs. I think that is sad."


Kasit responds: "As a democrat, I feel the change in political culture is a moral response to Thaksin and his methods. I have been talking to many people about this. I note 60 - 70% of PAD activists are women. This could be because they have a more moral grounding against behaviour such as that of Chalerm Yobramrung and Samak's verbal abuses. This is about morality."


JH - Korn, why can't Democrats get more votes in the north east?

Korn - "I could talk about that all day. Northerners are less politically active and money politics is more prevalent there, and we have less money than the PPP. However I agree with Chris, money is the price you pay to play the game but it doesn't decide if you win or lose. In some areas Puea Pandin outspend PPP by three to one and still lose. "

"Our predicament is this: do we leave the system as it is and hope that it will improve and evolve as many people believe [including me] or do we reform it? I'm a pragmatist, I support the later idea but I don't support removing anyone's vote." (Whoever said you did, Korn?)




Floor opens for questions.

Question 1 - (Pravit, The Nation):

Why did the PAD make the 70/30 proposal? Second question - could Kasit be accused of being a Democrat proxy or nominee for the PAD?

Kasit: 70/30 idea was floated simply to get a reaction and spark debate. I've always been open about my dual roles. I never mention The Democrats when I'm with PAD.

I used to be Thaksin's ambassador in Tokyo. During that time many Japanese companies complained to me about corruption at Suvarnabhumi Airport. I sent many letters to Thaksin but they were all ignored.

That's why I fell out of friendship with him and joined the PAD.


Question two - Chris Baker, do you think The Democrats have not been firm enough about their democratic values during the political upheaval?

Chris - I agree, I don't like people suggesting the Chinese government has a 'democratic model'.

Korn responds: We will not back away from OMOV. The reason why so many Democrat supporters also support the PAD is due to frustration. they have tried to stick with Democrats and get reform but they cannot. So they take to the streets to make their point more directly. We ourselves are still here, supporting democracy.


Question three - What are your thoughts on north eastern politics, especially in relation to Udon [Thani]?

Kasit - The incident [of fighting between pro government and pro PAD factions] at Udon was not from real Udon people. The [pro government] people came from Bangkok and were trained near a military base. They were paid.


Question four - I was shocked to see Chamlong suggest disenfranchising seventy percent of the people that he fought so hard to protect in 1992. I want to suggest a more powerful senate with regional representatives that can control the government's budget.


Korn - But how can you complain about disenfranchisement and then support a more powerful unelected upper house?


JH - What about a more powerful elected senate?

Korn - We are discussing this. We also like the idea of an EU style regional assembly.


Question five - Chris, do you see the military as the ruling force in Thai politics for the foreseeable future? Do you believe Anupong [ the general who says there will be no coup]?

Chris - You can never rule out another coup, but right now the army are at a low point due to their poor government. They have low political capital right now so there should be no more coups at least for now.

JH- Kasit, do you support the PAD's call for more military involvement in politics?

Kasit - The military believe themselves to be guardians of democracy and Thai values. We can't reconcile that with true democracy, though.


Question six - [introduces herself as a "trained lawyer". Why is it that whenever someone introduces themselves as a 'trained lawyer' or something similar, my BS detector starts going off?]

I can't accept the criticism of the US made earlier, the PAD have timed major events to coincide with SET crashes. Why are they working outside the system?

Kasit - We don't have the sophistication to work in tune with the SET, only Sonthi worries about the SET.

follow up - Concerning your idea every complaint can go to court, how do you legitimise this? Wouldn't the court get clogged up?

Kasit - It's just an idea at this stage. People feel helpless because true complaints are purposely blocked by bureaucracy. People feel angry and hurt.


Question seven: (Andrew Burke) You have discussed making politicians up from professional associations, etc. how would you choose them?

Kasit - We are undecided. It could depend on how much tax they pay, for example. (gasps from the audience)

follow up - So you are saying the richer people get to choose more politicians?

Kasit - It's just an idea, we need to do more research

follow up - But you have so many ideas, don't you need to explain some of them?

Kasit - In time we will, now they are just proposals.


Question eight - (Mirakim, North Korean reporter for South Korea.)

[She starts with a strange set of comments including the statement: "There are only three countries in the world without a constitution - UK, Israel and New Zealand" which is totally wrong]

Can we get Thaksin back to court in Thailand?

Kasit - The government are scared to do so, Somchai is his brother in law. To extradite, we need to send an official letter to the UK. This letter has not been sent.



There are further questions but I'm tired out. The night was interesting, if uninspiring. All parties seemed slightly unfocused. Kasit had some nice ideas but no substance behind them, Chris took a role as "critique" of the other two so couldn't offer a lot things we hadn't heard before, but I was particularly unimpressed with Korn. Not only did he have little to offer but his duplicity was remarkable. Throughout the night he displayed clear support for the PAD and their proposals, but also tried to walk the Democrat's official line without ever being honest about where he stood.

Students being students

Part of student life is finding an identity for yourself and giving yourself a reason to exist. For some (like me) that can mean attaching yourself to a certain type of music culture. For others it can mean finding a cause to support, often a perceived moral cause so you can imagine you have some high ground. This is a natural stage that we all go through and in any country, student politics can be a powerful and important movement.

That said, the latest student protests in Thailand have a farcical ring to them.

A look at the photos on the home page of The Nation tells the story. In the last week we've seen student group after student group melodramatically protesting the state of emergency, comments by the education minister and now a wave of protests calling for Samak to resign. This bandwagon has been jumped on now only because the international media are watching and Samak is under pressure. The students have decided they want some attention now, but when the PAD protests first began, the student response was minimal. The student shootings were tragic, but the wave had begun just before this happened.

What's more, inviting school children up on stage to tell Samak to resign seems in bad taste.

Here's one more thought: if you were a person of influence watching the events in Bangkok, what would you tell the people? If you supported democracy you could tell the PAD they were wrong and things should be resolved peacefully. If you were neutral, you could say the same thing. But what if you supported the PAD, but could not be seen to be condoning their actions? I guess you'd have to stay quiet.

Vindication of the stripes

I don't get a huge amount of interview requests - which is hardly surprising since I'm not a journalist or a celebrity - but the occasional offer does come up. This weekend though, I got two requests on the same day, which is a first. One was for an Australian radio station (via an old colleague) and the other was for a very well known international TV station.

To make the coincidences even more pleasant, both requests dropped in on the day that my 2007 prognostications of the fortunes of Mr Thaksin and Manchester City were more or less vindicated. When Thaksin first bought out MCFC, my article was plugged on the front page of 'The Nation'. Amongst the rebuttals came a bash from Matt Crook - probably the most popular blogger in Thailand at the time - who said it "makes perfect sense" for Thaksin to buy City. It didn't. It was a purely political move, and the decision to sell now is not related to the assets freeze - that happened before the purchase - but is in fact a face-saving gesture to avoid failing the "fit and proper person" test required by the FA for all majority shareholders.

Thaksin was never keen or knowledgeable about football. He once said he wanted the City fans "to treat me as one of them". Well Mr Thaksin, you failed that test, too. Fans never walk out on their club.

Back to Bangkok and the ongoing mess. I said recently that the scene was "eerily reminiscent of May 1992". Bangkok Pundit responded - I'm not sure if it was to me or someone else - by pointing out the lack of fatalities in the ongoing protests. In fact, when I said the new events were "reminiscent", I meant more in atmosphere than in violence. But of course, today saw the first fatality. I hope it is the last, but I fear not.

The last days of the PAD?

I guess most people have been in a situation where they hear an old friend or colleague has done something terrible/crazy/surprising and asked themselves "What was he thinking?".

I've never met Chamlong, but my wife has. Yet the same "What is he thinking?" moment has been bugging me this week following the actions of Chamlong and the PAD.

In his book "Chamlong Sriamuang and the New Thai Politics" Duncan McCargo argues that a study Chamlong's biography exposes a man who may have high ethical standards, but performs most of his political manoeuvres strictly in self interest.

I can't find any other reason for the fascist actions of the PAD this week. Storming a TV station and taking hostages and invading government house.

I've always argued that Chamlong's anti-corruption ethic makes his own self interests unimportant, he was good for Thai politics. But the actions of the PAD this week are based around a simple logic - if you don't like the democratically elected government, use force and intimidation to make them either resign or spark a coup. That is the undoubted thought process involved.

In the last few hours the courts have issued arrest warrants for he PAD leaders. Sonthi is considered the overall leader, he will need all his cash and business contacts just to avoid the death penalty. But Sonthi and the other leaders do not share the respect and (in some circles) public admiration Chamlong has.

Sriamuang has recently inferred that at his age, he doesn't have to worry about what happens to him. As I type this, the PAD leaders sit in the rain outside government house, daring the police to wade through the crowds and arrest them. It's a scene eerily reminiscent of 1992, but the crucial difference is that last time around, the majority of right thinking people supported Chamlong, this time around, they don't. What is he thinking?

It's all a big joke!

According to The Nation (I will post a link when I can get one) Kwanchai Praiphana, leader of the anti- PAD protesters in Udon Thani, admits:

"I do offer 10,000 bhat to anyone who punched Chidchob and I said if it was Chamlong's blood, I would pay 20,000 bhat. But it was a joke, I didn't mean it to be taken seriously"

Perhaps K.Praiphana should choose his jokes more carefully. After all, he is leading a band of working class people to whom 20,000 bhat is a lot of money and I'm not sure the "joke" defence would stand up in court, though I do recall one TRT MP stating his offer of 2 million bhat to a Democrat MP to step down from local elections was "a joke" also.

Countdown to a redux?

Nationmultimedia.com has a live update on PAD movements as the group prepare to move towards government house. Key unions have joined the protest and various photos depict lines of riot police making final preparations.

Tensions are high, and amidst all of this Chavalit Yongchaiyudh has helpfully suggested that Samak could resign to ease the situation or a coup could achieve the same.

Of course, in either of these situations we would then need someone to step in and aid “national reconciliation”. Perhaps someone with both military and political experience. Perhaps Mr. Chavalit has someone in mind?

This could get nasty

The PAD announce a plan to "take" government house.

Samak responds by calling an urgent meeting and confirming the PAD will be blocked by police. Chamlong responds by saying the PAD will simply return.

I'm a fan of Chamlong (I was neutral on Sonthi before, but I will never forget him printing the address of Choksak on his web site) and I abhor Samak, but this is plan wrong.

How can a self proclaimed democratic group "take" government house? For what? What democratic mandate do they have? The belief that they are right? That's called dictatorship.

Keep watching.

Score one for the PAD

Source: gettyimages.com

Samak's comment that he would "disperse protesters with force ('if you want to try to resist, go ahead')" was a botch. Chamlong and co know well that the PM is famed for his temper and ill chosen words.

Chamlong responded to the threat by instructing PAD protesters (did I mention they are back on the streets?) to take cameras with them to the protest to capture any use of force for the world to see.

CNN reported it, and the PAD scored some propaganda points.

Samak left it to the equally charming Natthawut Saikua to spin it as "a tactical move, not a real threat"

What is Chamlong thinking?

This was a piece I wrote a while back and I never got around to posting it. As Pundit has pointed out some highly critical articles on the PAD lately, I thought this article was worth throwing into the mix:



I've long singled out Chamlong Srimuang as one of my favoured Thai politicians. Chamlong has a history of taking unusual and often brave stances on issues when his peers have simply chosen to jump ship and/or switch sides. For example, he was a key leader in the protests of 1992 against the military dictatorship of Gen Suchinda, even going as far as a public hunger strike. Chamlong of course, received a reprimand from His Majesty The King for his outspokenness against Suchinda and his power ploys.

Srimuang has a military background but unlike most veterans he has chosen to remain aloof from most military politics and instead focus on his religious group, the Santi Asoke affiliated "Dharma army". The group - labelled as 'strange' or even 'cult like' by some - are representative of Srimuang's values, including his celibacy and his vegetarian diet. In my opinion, Chamlong's religious stance is not cause for concern but, conversely, is actually what makes him better than most other politicos. It enables him to take a tougher stance on corruption and cronyism.

But I must confess, I'm getting concerned. When Chamlong first entered the anti-Thaksin group known as the PAD, (People's Alliance for Democracy) it was an excellent move. At that time the leader Sonthi Lithimongkul had provided funding and important contacts to facilitate the group's activism but supporters were only too aware of some of Sonthi's shortcomings, such as the fact that a far from squeaky clean businessman was protesting against another businessman's dodgy deals.

Cynics had suggested that Sonthi's ego would not allow another leader to share power or media time and that this would limit PAD clout. All that changed when Srimuang stepped forward to become joint leader and announced ( in reference to his former partnership with Thaksin) "Thaksin was my mistake". A politician admitting his mistake? Another reason why this man is different.

But my doubts surfaced after the 2006 coup, when Chamlong accepted a position on the Constitution Drafting Committee for the junta. At the time it seemed that perhaps Chamlong and PAD leaders were looking to protect the interests of Bangkokians in the new constitution, but when PAD personnel including Chamlong slowly lost their voice over time, it did not bode well.

And now things are looking even bleaker. The PAD have announced their plans for possible protests at the return of Thaksin Shiniwatra to Thailand this week, and, sitting at the front row of a PAD press conference was none other than the general himself.

Why is this a bad thing? Simple, it's a tactical calamity. While there can be no doubt that the PPP have already raced to subvert justice and ensure a clean return for Thaksin - who will no doubt renege on his promise to interfere in politics - for the PAD to launch protests now would be suicide and simply play into the hands of their opponents. PPP members will play it up as "undemocratic" and "not helpful to reconciliation". Neutrals or undecideds will view it as trouble causing and, most importantly, the protests will attract far fewer activists than last time. When the PAD last hit the streets, many were indignated by the S[h]in Corp sale by Thaksin. This time the only interest is in seeing what happens after he returns. The PAD will receive far less funding, support and interest than last time and as such it will be seen as far less of a democratic movement and more like one of those infamous "invisible hands" we so often hear politicians talk about.

And this is where Chamlong becomes important. The general is held in high regard by many Bangkokians as integral and reasonably honest and open in his movements. For Chamlong to play along with what promises to be mutated and possibly self defeating protests by the PAD will lead many to question his motives. It will be suggested that he has lost his influence or integrity that won him popular support in the first place, and the PAD will go down with him.

It may be that justice will be subverted, it was grossly twisted for MP Pracha Prasopdee to threaten to "drive PAD members out of the country" in the knowledge that such a move would be unconstitutional, but the fact is that now is not the right time for the PAD to hit the streets again. I hope Chamlong realises this and finds another way to speak for PAD members.

The debate on Thaksin, income gaps and PAD motivation

One of the latest and more interesting debates on the Thailand blog scene has been concerning the reduction in income gaps during Thailand's Thaksin years and the possible resentment of this by the PAD and Bangkok's anti Thaksin middle class groups.

The latest bout of debate was sparked by myself on bangkokpundit's article titled "Thaksin in a nutshell". Blogger Jotman posted a comment suggesting:

Thailand had made great progress in reversing income inequality. That this is one legacy of the policies of deposed Thai Prime Minister Thaksin, there can be little doubt. I wonder whether the trend also might help to explain why certain segments of Thai society strongly supported the coup d'etat. I have long suspected this. Perhaps noticing that the poor were quickly "catching up," there was some level of resentment on the part of better educated, middle class Thais.

To which I somewhat hastily replied:

I think the idea that "income gaps" were closing is grade A BS. It's another fabrication by apologists for the crook. The average wage did not increase for the rural folk under Thaksin. They were given debt relief, discounts on consumer good and bribes to vote. They did not get an increase in their farming salary.

I think you will find most middle class Thais disliked Thaksin because:

a)He was corrupt

b)He was arrogant almost beyond sane levels.

c)He put his family friends and own business ahead anyone or anything else.

Now, unlike some other bloggers I know, Bangkokpundit is devilishly detailed and will not accept polemics or a wikipedia scan. He ran a blog "Thaksin and income equality" which appeared to show I was wrong. There is some evidence to suggest that the middle class and rural poor income gap did close during the regime of Thaksin , but it is tenuous and in no way points to PAD motivation for protests.

I suggest reading the blog here. Now let's look in this with some more scrutiny.

First, pundit gives us four pieces of evidence to suggest Isaan workers gained on Bangkokians under the Thaksin regime. (Actually he gives five charts but he does not analyse the final one).
The first two charts are based on the Gini coefficient system. Pundit has already offered a quick definition:

The Gini coefficient is a measure of inequality of income distribution or inequality of wealth distribution.


Gini coefficients in Latin America are based on income; those in Asia are mainly based on expenditure, because reliable income data are often not available

Keep an eye on that bold text. We will return to it.

The next piece of information was a chart showing poverty rates by region in Thailand, and the final chart was a World Bank report showing average income by region as a fraction of Bangkok income. I printed the chart and (without markers) I took a "best case scenario" of a seven percent gain by the north east on Bangkok.

So, it appears that on paper at least, there has indeed been some closure in the income gap, which is good news for anyone who believes in fairness. But we need to ask: just how accurate is this data and how much of this was the TRT government responsible for? And did the issue really cause resentment in Bangkok?

Actual salaries and their change

First, let's drop ratios and look at what this actually means in baht terms. Nearly every economical report from the TRT years tells us that a typical Thaksin voter in demographical terms (i.e. a rural Isaan worker) would have a monthly salary of four thousand baht.

Meanwhile, a typical PAD activist probably fits the description of my wife: a middle class office worker from Bangkok. The average salary for this demographical sector varies more by individual reports but thirteen thousand baht per month is a balanced figure.

So, if we use these two salary figures and trace the gap closure as given in the world bank report, the salary gain by Isaan farmers on Bangkokians is 910 baht.

Remember, this is a best case scenario. It also does not account for inflation. If we take the inflation rate of 3.5 % from the start to the finish of Thaksin's reign, that amount in real terms becomes even smaller.


Trends before and after Thaksin takes the helm

Now let us move on to some other data. Remember that many (not just Pundit, Jotman and Fonzi or the other Thaksin apologists in the blogosphere) have pointed to the reduction in numbers below the poverty line as a result of Thaksin's "war on poverty". Any reduction in poverty is great news, but it's worth noting that this has been a massive trend that was in place well before the reign of TRT. Let's take a look at this graph and commentary from a World Bank siteresources report.

Source: worldbank.org

Sorry the chart won't come out clearly but it the blue section represents Isaan and the years go from 1988 to 2002 in two years steps. So it tells us....

The poverty headcount fell from 48 percent in 1988 to 17 percent in 2002,
and in spite of population growth, the number of poor dropped from 9 million to 4 million people.

So it seems this was a trend well in force before the millennium. However there is another interesting factoid in this report. While the poverty count was dropping, productivity was also decreasing:

Economic growth, while decent by international standards, lacks behind Thailandu-s other regions. Since 1970, annual economic growth fell short by one percentage point compared to the national average, and the Northeastu-s contribution to Thailandu-s GDP fell from 16 percent to only 9 percent even though the population share remained constant at around one third.

The main factor behind lower economic growth is weak productivity gains. Much of the Northeastu-s human, physical and natural resources are absorbed in low-yielding activities. In 2004, the Northeast worker generated only one sixth of the value added of the average worker in Bangkok, Central, East and Vicinity, and just over two-thirds of the output of a worker in the North. And the gap to other regions is rising. Since 1990, labor productivity growth in the Northeast fell short by 0.4 percent compared to the North, by 0.5 compared to Thailand, and by a remarkable 7.7 percent compared to the East

As I have said before and will repeat later, I think the idea that Bangkokians staged anti-government protests out of resentment is audacious and insulting. However, let me return an equally ludicrous and based on circumstantial evidence idea: Bangkok and the middle classes took to the streets in protest because Isaan workers were seeing an increase in wages even when their productivity was dropping! Bangkokians felt this was unfair and wanted to see people rewarded for their work rate! How's that for an equally preposterous and silly theory?


Now it's time to examine another important topic and a concern that has weighed on me for this whole debate:



Validity of the data.

There are three concerns here. Firstly, how are the salaries being measured? Many farm workers don't have an official salary. They either get cash in hand or simply shelter and food. This report (the same as the one previously quoted) tells us:

Less than two fifths of Northeast workers earned a wage at the age of 35, and just over one fifth earned a monthly wage. This compares to two thirds and one half in Bangkok, respectively. These differences in wage employment rates link back to occupation and education, as wage employment is more common outside of agriculture and among skilled workers.

There are several ways to interpret these comments and they are not accompanied by graphical data. However, it raises a crucial question: how did Thailand or the World Bank collate this data? Is it taken from a census? If so, how did the census measure undeclared income? It seems very likely that a lot of salaries paid in Isaan are informal and undeclared (to a greater proportion than Bangkok).

If the data was not census data, was it collected by government figures or the BOT? If so can we put personal views aside and simply accept that a government that sold itself strongly on aiding the poor may have vested interests in use of wealth data collected from the area?

It seems possible that the data collated is taken purely from declared salaries. Declared salaries are likely to be higher than those undeclared and the proportion of undeclared salaries in Isaan is likely to be higher than Bangkok. Thus, we could be missing a substantial set of data in this equation.

And yet, we still have not touched on another crucial factor:




Household debt.

Household debts have been raising steadily in Thailand , however the jump from 2002 (Thaksin's first full year) at 84,603 baht to 130,881 baht in 2003 was well above a yearly average. (Pasuk and Baker 2004, The Nation 2004).

Such figures could be cause for alarm. Yunyong Thaicharoen, Kiatipong Ariyapruchya, Thitima Chucherd produced an excellent paper called ."Rising Thai Household Debt: Assessing Risks and Policy Implications" which , initially, puts our mind at rest. Data from part three tells us that farm workers are the only group not to have seen an increase in household debt from 2002-2004.

But things get worse from there on in many respects. Further data confirms that north east residents have the highest percentage who feel their debts are a "heavy burden". Worse still, the agricultural group appear to be at highest risk:Source:bot.org (Authors named above)

OK So the charts don't appear to be happy about my cut and paste technique. But what this chart tells us is:

Two groups of households that perhaps are potentially more susceptible to over
optimism in income prospects is the farmer and labourer in the agricultural sector. A deeper look at the agricultural sector indicates a dissonance between cyclical trends and farmers' expectations. Over the past few years, farm income has risen markedly as a result of favourable price trends in major crops.[Did Thaksin have an effect on crop prices?] In 2002, farm income has grown considerably. Given recent favourable income growth and assurances from the government, these farmers may have increased their borrowing. The figure 4.15 on farm expectations reveals that a substantial portion of farmers in the rice, rubber, and sugarcane sectors expect prices to rise. These farmers may be particularly at risk of over-borrowing and debt stress if they have overly optimistic projections of their income path

Of course this risk cannot be directly attributed to Thaksin, but it would surely be fair to say that excess should not be encouraged in a group that are at risk. However, Pasuk Phongpaichit in her paper "Financing Thaksinomics" confirms that Thaksin diverted a huge amount of credit to the agricultural workers. In addition to agrarian debt moratoriums, we also have the Million Baht Village fund, low end consumers goods such as subsidised computers and the People's Bank loan scheme.

The most concerning statistic of all however is:
Quasi-Fiscal Activities 2002--3
(million baht)

Source: chula.ac.th (Dr Pasuk)

Looking at this quasi fiscal expenditure (i.e. money spent from state coffers ) we can see SME loans (for small businesses) People's Bank (credit for those in low income gaps) , Community enterprise loans and homes for the poor.

At this point, please recall the Gini coefficient for Asia is based on expenditure. Millions upon millions of baht was spent from state coffers in quasi-fiscal financing for expenditure in Isaan and other rural areas! What this means is that while expenditure by Isaan citizens may have increased , it did so due to huge state lending and quasi - fiscal financing. This increases the risk of financial shock on the borrowers in the event of interest rates being increased. And as noted by both Baker and the Thaicharoen, Ariyapruchya and Chucherd team, Thai interest rates are at their lowest for years and cannot be sustained at such a low level.


In conclusion
It appears that Thaksin Shiniwatra and TRT did indeed take steps to close the income gap between the rural poor of north east Thailand and the middle class wage earners primarily based in Bangkok. However, Thaksin was not a miracle worker and the actual tangible increase in wealth by the rural workers was less than one thousand baht in real terms and was depreciated by inflation.

Household debts in Isaan have increased in line with the rest of Thailand, however the burden appears to be greater for this group and their risk has been increased tremendously by lax spending with quasi fiscal funding by the previous government.

It is unlikely that Bangkok's middle classes took to the streets in protest at a decrease in salary gaps.