By Khine Thant
Rice farmers in northern Thailand. Thailand’s military government has embarked on new economic policies as frustration with a slowing economy has increased among farmers in the northern part of the country. Source: Wikimedia user Takeaway, used under a creative commons license.
Thailand’s military government said in September that it will embark on a new set of economic policies as frustrations with a slowing economy among farmers in Thailand’s northeast have grown since the military coup in May 2014. These policies largely resemble populist measures associated with former prime minister Thaksin Shinawatra, who was ousted in a 2006 coup. While the military government announced these measures primarily to appease struggling Thai farmers, many of whom have been loyal supporters of Thaksin and his sister Yingluck Shinawatra (who was deposed as prime minister last year), it also sought to bolster its own domestic legitimacy, as Thailand continues to slide toward a more repressive political climate and military rule appears to be dragging on longer than previously expected.
Under former prime minister Yingluck, rice farmers in the northeastern region benefited from a multi-billion-dollar rice subsidy scheme, which bought farmers’ rice at twice the market price. The rice subsidy scheme, which was at the heart of Thaksin’s and Yingluck’s economic policy, was extremely popular with the majority of Thailand’s rural electorate. Since the military took over and abruptly ended these subsidies, farmers have faced mounting household debt, which was made worse by plummeting commodity prices worldwide.
Current prime minister Prayuth Chan-o-cha, who was army chief prior to the coup, once condemned the rice policy as being a vehicle for populism, corruption, and abuse of power by elected officials. Yet his government has since drifted from its previous stance and pursued similar policies.
Prayuth even appointed Somkid Jatusripitak, a former member of Thaksin’s cabinet and one of the architects of Thaksin’s populist policies, or “Thaksinomics,” deputy prime minister in a cabinet reshuffle in August with a mandate for reviving a deteriorating economy. Somkid has since announced an economic stimulus package with a wide array of programs, including cash injection into rural areas, low-interest loans for individuals and small and medium-sized enterprises, tax breaks on investments and for new home owners. Somkid said the government will spend more than $3.8 billion in the first phase of the economic stimulus package from September to December 2015.
The first phase is particularly targeted at rural areas, long a stronghold of the Shinawatras. Somkid said he plans to revive the Village Fund Program, which has roots in Thaksin’s policies, to inject cash directly into the rural economy. In addition, the government will issue more than $1.7 billion of loans to low income earners, with interest waived for two years. Prayuth’s economic package fundamentally resembles Thaksin’s and Yingluck’s populist platform. However, to differentiate its approach from Thaksin’s brand of populism — which was known as “Prachaniyom,” or “popular with people” — the military government has branded its economic package as “Pracha Rat,” or a strategy focusing on a “people’s state.”
Prayuth seems to be garnering some support from within the Red Shirt camp for these measures. When Prayuth and Somkid visited northeastern Ubon Ratchathani Province in November, Red Shirt leader Jamroonsak Jantaramai expressed his support for Prayuth’s policies and called on other Red Shirt leaders to meet the government half way. In contrast, Prayuth’s first trip as prime minister to nearby Khon Kaen Province last November was greeted with protests against the coup and the military’s detention of hundreds of politicians, academics, and activists who were sympathetic to the Yingluck government.
But will these policies work, will they address the deep-rooted political fractures in Thailand, and will they help curtail the Shinawatra support base in the northeast?
Thaksin has not publicly spoken out against the military government or openly mobilized the Red Shirts since the May 2014 coup. The last time he made a public statement was on December 1, urging his supporters to “be patient” and wait until the next elections. But his public statements are not always indicative of his political intent or actions; Thaksin last month posted a picture of himself wearing a red shirt with smaller yellow details—yellow being the color of the monarchy in Thailand — reportedly to “show moral support for those who love democracy and seek justice.” It remains to be seen whether the military’s populist agenda will be enough to appease the Red Shirt base should Thaksin choose to play a more forceful political role in the coming months.
The direction in which Thailand is headed has become increasingly unclear. The military initially promised to hold elections in late 2015, but later chose to delay them until at least mid-2017, while a military-appointed reform council in September voted down a draft constitution that was a prerequisite for holding elections and forming a new government. If the constitution currently being drafted — which is expected to be released in early 2016 — is rejected again, the military will likely use that as an excuse to hold on to power longer.
While the military’s pursuit of populist economic policies may be effective in the short term, they might not be sufficient to sway the public from other problems facing Thailand, such as a struggling economy, the junta’s heavy-handed approach toward its critics, and growing allegations of corruption and mismanagement by military officials.
Ms. Khine Thant is a researcher with the Chair for Southeast Asia Studies at CSIS.
