The military coup has at least one positive: it provides a narrow window of opportunity for Thailand to reform in preparation for the next global crisis.
Thailand is set to become only the second nation after China to undertake drastic reform at a time when most countries in the world remain in a complacent mode. Any country that is willing to take a step backwards to reform now, before the global storm hits, will also be among the first to get up on its feet afterwards and begin moving forward with more stability. Those that delay jumping on the reform bandwagon till they are engulfed by full-blown crisis will find that it is too late. When they fall, they will drown along with others amid a financially toxic global environment.
A stern warning of the next crisis came the other day from none other than the World Bank. It said that bad weather in the US, the crisis in Ukraine, rebalancing in China and the anticipated rise in interest rates would hit global growth this year. It urged countries towards needed reforms.
“We are not totally out of the woods yet,” said Kaushik Basu, the bank’s senior vice president and chief economist.
“A gradual tightening of fiscal policy and structural reforms is desirable to restore fiscal space depleted by the 2008 financial crisis. In brief, now is the time to prepare for the next crisis.”
For Thailand, as well as other countries, reform under normal democratic processes is impossible. In these conditions, elected politicians, bureaucrats, businessmen and investors tend treat problems with quick fixes. They are far more likely to protect the status quo than seek to reform the system for the long haul.
The Thai military regime’s first order of business is to put an end to the political crisis. Without the coup, the gruelling task of ending the colour-coded war could have been impossible due to the deep-seated polarisation. There was also the threat of an armed rebellion by the red shirts. A fledgling separatist movement had adopted the “Khon Kaen Model”, around which resistance was being organised against the centre of power in Bangkok.
Over the next three months, the military authorities will continue to uproot the crony politics of previous administrations, subdue political radicalism and separatism, and tackle corruption. Thereafter, we will get an appointed prime minister and Cabinet, along with a legislative body and a reform council.
On the economic front, the blueprint for reforms is still not clear. However, if Thailand can achieve real reform over the next 24 months or so, it will emerge as a stronger country, with surer social, political and economic stability.
Strangely enough, most Western countries do not approve the reform route Thailand is taking. They prefer to see a quick election, ignoring the fact that a vote would provide no solutions to the Thai crisis. It seems that the West would like Thailand to remain obedient to the global order. Perhaps a continuing domestic crisis would make Thailand more dependent on the existing order than ever.
But as the World Bank has warned, countries should be prepared to cope with a degree of global chaos. It is better to swallow the bitter medicine of reforms now rather than delay the cure until it is too late. Democratic “business as usual” would not produce the structural change necessary to our future health. Elected politicians are more interested in protecting their vested interests than delivering results for the benefits of the nation.
Despite the impression overseas that we have been derailed by the coup, Thailand is right on track with the reform agenda. Let’s wait and see what results it brings.