Capitalism and Democracy Come to Thailand -- (Tom) Friedman
FOREIGN AFFAIRS / By THOMAS L. FRIEDMAN
The Reverse Domino -- March 19, 1999
BANGKOK, Thailand -- I last visited Thailand 15 months
ago as the country's economy was in a tailspin, on its way
into the history books as the first domino of the 1997-98
global economic
crisis. After revisiting Thailand for a couple of days, all I
can say is: What a difference a year makes!
Thailand is still not out of the woods financially, but the
situation has stabilized and the country is on a growth path
again. What is most striking, though, is the degree to which
Thai political reformers, who were hit hard by the economic
crisis, now view it as an enormously useful turning point for
their country.
There is a notion floating around out there that countries
such as Thailand, South Korea and Indonesia were all doing
just fine until the ugly, greedy forces of globalization
disrupted them. This is pure nonsense. They were all accidents
waiting to happen. Thais will freely tell you today that they
had a corrupt, crony-capitalist system with no transparency, a
plethora of insider dealings, a less than democratic regime
and a public often living beyond its means. And what the
global economic crisis did was expose the rot and force
changes onto Thailand -- democratizing changes -- that the
traditional elite families and power brokers were resisting.
"We do not see the I.M.F. as the enemy," explained Kavi
Chongkittavron, executive editor of The Nation newspaper. "We
see it as a baton forcing us to change our society in some
very radical ways, which never could have been done within the
traditional Thai framework, or at least could not have been
done quickly. If you look at the political changes over the
past 18 months, what has happened in Thailand is a miracle. In
the 1860's Thailand was forced open by the British, who wanted
to colonize us, and that external pressure was used to
modernize Thailand. Today the external forces of globalization
are being used to push democratization."
Since September 1997 Thailand has passed the most democratic
Constitution in the country's history -- including a freedom
of information act, which has set loose the press hounds on
every government department -- as well as 11 economic reform
bills, including last week's new laws for bankruptcy and
corporate restructuring. So many of the Asian Tigers never had
real bankruptcy laws because everyone was just growing. They
were like towns with only maternity wards and no funeral
homes. But corporate funeral homes are critical to clean up a
rotten economy, and now Thailand has them, as well as a whole
new set of laws banning insider dealings and vote-buying by
officials.
"The economic problem here was political in nature," said
Kavi, "and it could not be solved without changing these bad
politicians. Without this external pressure we could never
have broken the hold of 50 families over the Thai economy, we
could never have reformed the banking system so quickly. We
underestimated globalization, we thought we were at the top of
the world because we had escaped colonization. We had resisted
the British, so who needs to worry about globalization? We
were wrong, and now we are catching up."
The changes are messy and still accompanied by lots of
political wrangling, but in the end they are being "built on a
real political consensus," says a Thai investment banker,
Teera Phutrakul.
Still, elements of the traditional bureaucracy and powerful
families are fighting a rear-guard action that will gain
momentum if the economy does not start growing faster. Growth
in 1998 was negative 8 percent, but is expected to bounce back
to a positive 1 percent in 1999. There is relatively little
unemployment, because many people fell back on their villages
or family networks and are sharing jobs to get by. But there
has been a sharp drop in incomes.
If robust growth does emerge, though, the Thai example could
be hugely influential in Asia. It would declare that the
country that reformed its economic and political system the
furthest and deepest enjoys the most stable recovery and
attracts the most foreign investment.
You can bet the autocrats in China, Vietnam, Burma, Malaysia
and Indonesia will all be watching. "If we can succeed
economically, we can be like a reverse domino in the political
sphere," said Kavi. "The lesson will be that Thailand survived
the crisis the best because it adopted the best democratic
reforms. If that happens, and I am Burma, I would be worried.
If I am Malaysia, I would be worried. If I am Vietnam, I would
be worried. If I am China, I would be worried."
Copyright 1999 The New York Times Company |
