Thailand’s political catch-2023

Author: Editorial Board, ANU

When we think of countries that risk ‘growing old before they grow rich’, we usually think of China. But an equally stark illustration of the challenges facing a country with developed-world demographics and a middle-income economy is Thailand.

Thailand is facing a rapidly ageing demographic profile, with none of the fiscal ammunition that Northeast Asian economies like Japan, Taiwan and South Korea can draw on to support a growing aged population.

There are serious questions about whether Thailand can make up for its looming workforce challenges through productivity improvements, with the education system in dire need of reform and major industries dominated by politically-connected oligopolists. The overarching challenges of the economy look uncannily Northeast Asian: ‘Middle- and working-class households, stressed by growing debt, inflation and mediocre employment prospects, are hardly eager to have more children … Southeast Asia’s second largest and once dynamic economy is struggling under the weight of an ageing population, a deteriorating education system and low yield rice farming’, as Richard Yarrow says in this week’s lead article.

Thailand looks like a test case of whether or how a middle-income country with dysfunctional and only partially democratic politics can evade the political barriers to the structural reforms needed to lift it to advanced economy status. Above all, it ‘needs reliable, honest governance committed to tackling the country’s worsening structural problems’, writes Yarrow.

The shortcomings of Thailand’s politics hardly need introduction. The political outlook in advance of general elections due in May 2023 suggests that the political stability needed to undergird any serious effort at structural economic reform will remain elusive.

The latest episode in the Thai political saga came in September, when Prime Minister Prayut Chan-o-cha was reinstalled after a short suspension while the Constitutional Court decided whether he had exceeded an eight-year term limit. Prayut said the clock should have started after he was appointed prime minister after elections in 2019; opposition forces argued unsuccessfully that his tenure should have been counted from the time he seized power from former prime minister Yingluck Shinawatra in a coup in 2014.

Prayut faces a narrow path to being reappointed with any democratic credibility after the 2023 polls. Surveys suggest that parties associated with former prime minister Thaksin Shinawatra are likely to end up with the biggest haul of seats even when taking into account an electoral system designed to disadvantage them.

The anti-Thaksin incumbents will once again face the challenge of engineering a post-election political landscape to their advantage, in defiance of the desires of the electorate. This could entail strategically disqualifying candidates and parties ahead of the polls, throwing results out after the fact on technicalities, or getting a new military-backed prime minister installed by the entirely-appointed Senate in the event of a convincing opposition win in the lower house.

As the 2023 elections loom, Thailand finds itself in an all too familiar predicament. Any military-backed party that exploits the advantages built into the post-coup 2017 constitution will lack legitimacy. It will be constantly distracted by an endless and futile effort to push back on organised dissent to its rule. Meanwhile, any legitimately-elected (that is, probably Thaksin-aligned) government will constantly live with the cloud of a potential military coup hanging over it.

Thailand’s best shot at post-election stability would be an unlikely deal for power sharing between the military, the monarchy, and the Thaksin camp, even if only as part of a self-interested move to sideline the more radical reformist movement embodied in the Move Forward Party, the successor to the banned Future Forward party. In a less polarised polity such a deal might be possible, but for now it can only exist in the realm of speculation.

That’s a shame for Thailand, because fixing Thailand’s accumulating socioeconomic challenges and rebuilding trust between government and society will require a government that has enough of a popular mandate to give technocrats room to work on reform to the educational and social security challenges, and bring more competition to key industries now dominated by domestic oligopolists.

It is to such a government’s advantage that some of the political and political economy barriers that have held up structural reforms elsewhere in Southeast Asia don’t loom as large in Thailand. Crony capitalism may be going strong in Thailand, but it is not intertwined with a fraught ethnic politics as is the case in Malaysia, whose affirmative action system for Malays weighs on the economy’s potential.

Thailand is also lucky not to have a state-owned-enterprise sector as large, debt-laden, and politically sacrosanct as that in Indonesia, where state firms are major players in industries that would be better left as arenas for competition between private players.

Those are long-term challenges. Thailand’s tragedy is that the country’s long-term prospects are held hostage by the political dysfunctions created by its conservative establishment’s refusal to give real democracy a chance.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University

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