Asia Times: Pitfalls of prosperity



	February 19, 1999	atimes.com

Asian Crisis

Pitfalls of prosperity
By Boonthan Sakanond

BANGKOK - Throughout the early 1990s, Thai policy makers were convinced Thailand was on the verge of joining Taiwan, South Korea and Singapore as a newly industrialized country.

But with the economic and social crises besetting the country not showing any significant signs of abating, policy activist and sociologist Walden Bello warns, Thailand may fast be heading back into the ranks of the Third World.

In a new book ''A Siamese Tragedy: Development and Disintegration in Modern Thailand'', Bello bats for a radical shift in Thai development policy to make it more people- and community-oriented, reduce deep-rooted income inequalities and tread a path somewhere between the state and market economies.

While such a change in direction is unlikely to come from government, the sociologist predicts an outbreak of grassroots movements aimed at forcing the country's elites to put the people's interests before their own or face ouster.

A long-time critic of the East Asian model of development, Bello is best known for his classic 1991 book titled ''Dragons in Distress'', which argued that the ''tiger'' economies of South Korea, Taiwan and Singapore had achieved impressive growth rates only on the back of systematic exploitation of labour, the environment and the agricultural sector.

Further, despite their flashy image as manufacturing centers of cars and electronic goods, these countries, he argued, had little investment in developing human and technological resources - a factor affecting their future growth.

Bello has also been a prominent opponent of World Bank and International Monetary Fund policies in the region which he says have been ideologically inspired by the ''dubious'' U.S. agenda of ''rolling back the state's role in developing economies'' and prying open their markets to U.S. capital.

''A Siamese Tragedy'', authored by Bello along with researchers Shea Cunningham and Li Kheng Poh, also dwells on what they call a misguided development path for agriculture adopted by Thai policymakers.

This, the book claims, impoverished the agricultural sector to pay for industrial development, enriched the elite at the expense of workers and ordinary citizens and finally failed to develop skilled human resources.

The first phase of development of the modern Thai economy, according to the book, was of a strip-mine type which emphasised the export of natural resources like wood to raise revenue necessary to finance industrial growth.

This began in the late fifties when under World Bank guidance the military-led government of Sarit Thanarat replaced strong government control with private sector initiative as the guiding force in the economy.

The second phase, occurring in the mid-80s, was that of export- oriented industrialization, which created an international image of Thailand as the next tiger economy in the region. With growth rates averaging 8 percent annually the country indeed was a ''gold rush'' economy and the darling of foreign investors.

Bello says these high growth rates, while enriching political and business elites, were deeply detrimental to Thailand's long-term interests. The most obvious damage, of course, was on the environmental front due to lax implementation of controls in a bid to appease foreign investors.

The eighties and early nineties were also a time of frenzied construction. The automobile boom and overconsumption of consumer goods in urban Bangkok led to a poisoning of the city's air and water systems.

In the countryside, village folk bore the brunt of a mega-dam building spree by state-run electricity generation agencies catering to the growing energy needs of the newly rich urbanites.

Over the years, Bangkok-based elites through their tax and industrial policies, Bello says, have also been guilty of deliberately neglecting and indeed impoverishing Thailand's agricultural sector to pay for urban growth and maintain political stability by keeping food prices low.

Every time farmers have sought to organize themselves to demand land- reform or better farm prices, or to assert their democratic rights, they have been brutally crushed by various military juntas under the pretext of suppressing ''communist insurgency''.

The marginalization of this sector is clearly shown by the fact that while agriculture's contribution to GDP fell from 26.9 per cent in 1975 to 10.4 percent in 1995, it still absorbed over 64 percent of the country's work force in the mid-nineties. A poorer countryside also meant the creation of a vast reservoir of cheap labor that could be tapped by the industrial sector.

But labor in the country's burgeoning industries did not fare better than farmers when it came to incomes or quality of life.

One of the biggest disservices done by the Thai elite to the long- term interests of the Thai people, Bello says, was the failure to improve skills and develop technological capabilities of the country's human resources.

Despite the presence of a large number of foreign car and electronics companies in Thailand, Bello argues that there has been very little transfer of technology and the country has become a ''technological dependency'' of Japanese firms.

Thailand also has one of the lowest levels of investment in public and private research and development activities, another reason why it has not been able to develop skilled manpower in any important industrial sector.

Although Bello does touch upon the subject several times in his book, what is missing is a deeper analysis of the political and cultural context in which all these economic policies were being carried out.

While Thailand is a relatively more developed democracy than many of its neighbors or other nations in Southeast Asia, it is still an extremely elite-oriented, authoritarian society, especially in its cultural and political spheres.

Repeated suppression of democratic movements over the decades has produced a culture of impunity among the elites, who consider themelves above all laws.

Bello places a lot of faith in the ability of Thailand's vigorous grassroots NGO movements to challenge these elites and pursue their dream of a community-based, ecologically sustainable and equitable society.

(Inter Press Service)