A month after the coup, there are signs of drastic reform underway in Thailand.
General Prayuth Chan-ocha, head of the National Council for Peace and Order, has quickly torn a page from the populist textbook to appease the grassroots. He ordered long-overdue payments for farmers under the rice-pledging scheme, then began rearranging the social order by revamping the lottery, motorcycle taxis, airport cabs and minibus service. Cinema tickets for “The Legend of King Naresuan” have been distributed free to the general public. Red-shirt leaders continue to report to the military. Cronies of the previous regime have been removed from the boards of state enterprises. As the country returns to stability, the verdict is, “so far so good”.
Looking ahead, it’s still unclear how committed the military regime is to further reform. Here are some of my proposals for reform in accordance with the phor phiang (sufficiency) principle.
1. Thailand should strive to live within its means. A balanced budget is desirable.
2. In managing the economic system, domestic demand is the key to stability. We should produce largely for domestic consumption. Any surplus in production may go for exports. This will help build the national savings.
3. An export-oriented economy is doomed to fail, as evidenced by the Japanese model.
4. Income from exports is kept in US dollar or fiat money, which can become worthless via inflation or hyperinflation. Thus we should not try to overachieve in exports in return for paper money.
5. Businesses should not over-invest or over-leverage or over-expand their enterprises.
6. Our natural resources – oil and gas, for example – belong to all Thais. We should not sell off Thailand’s natural resources on the cheap via long-term concessions. Thais should exploit our own natural resources. If we have no technology or are not ready to do it, just put it on hold.
7. Economic activity must achieve a state of balance, not too much and not too little.
8. Money should not be held as the ultimate objective. Happiness and sufficiency in the society are more desirable.
9. Communities must be strengthened to sustain themselves and to increase their bargaining power. Local natural resources belong to them. If they own their own natural resources and manage them without exploitation from merchants, politicians or foreign investors, they will be much better off. Strong communities are fundamental to national security and stability.
10. A credit system that breeds inflation must be eradicated. The Bank of Thailand’s policy of money creation through constant supply growth should be reviewed. Inflation robs the wealth of the nation.
11. Foreign investment should not be the key driver of Thai growth. The more there is, the greater its demand on our land, water, electricity, infrastructures and other resources. At the end of the day, the costs of foreign direct investment outweigh the benefits.
12. Impose a certain degree of capital control to shield Thailand from the imminent global financial crisis. Both the World Bank and IMF have issued warnings about a crisis brewing in the global financial and real estate markets.
13. Thai land belongs to Thais. We should not sell it off to foreigners. Productive land is important for Thailand’s future security. Foreigners live in Thailand as guests, not as our masters.
14. Reform land rights and give the land back to the farmers. They are the backbone of Thailand.
15. Alternative energy sources are a solution to shortages.
16. Water projects should be of sufficient size and sophistication to support Thailand’s agriculture.
17. Agro-industry is preferable to heavy industries.
18. Reduce the financialisation of the Thai economy before it is too late.
Pope Francis gave an interesting analysis in a recent interview. He said the global economy cannot continue along its current path. Income disparity and a breakdown of social order are symptoms of economic failure, he added. There is a threat of regional wars. The superpowers are selling weapons and waging proxy wars to shore up the status quo. Globalisation is a failure; it brings neither sustainable wealth nor equality.
In which case, it would be prudent to follow the course dictated by the phor phiang principle, to prepare Thailand for the imminent global crisis. We have the opportunity to become the first country in the world to undertake the reform needed to cope with the coming shift in the global paradigm.