BANGKOK – Thailand’s military junta led by Gen. Prayut Chan-o-cha will put itself to a democratic test in the country’s general election slated for March 24th, among the key issues are the government’s economic policies.
Although recent data should put the government in a strong position, many voters in rural areas feel left out of the country’s economic recovery. Among them are supporters of exiled former prime ministers Thakshin Shinawatra and his sister, Yingluck, whose populist policies put money in their pockets. These voters may hold the balance of power.
Thailand’s gross domestic product rose an inflation-adjusted 4.1% in 2018, its fastest growth in six years. Despite uncertainties such as the U.S.-China trade war, the economy is forecast to expand by around 4% again this year.
The Bank of Thailand’s monetary policy committee voted 4-2 on Feb. 6 to keep its policy rate unchanged, with two members favoring a quarter-point increase. The central bank raised the key rate in December for the first time in about seven years, but the early-February meeting indicated some confidence among policymakers that the Thai economy can withstand more rate rises.
Supporters of the junta highlight the economy’s solid performance to argue that its leaders should remain in power. Prime Minister Prayuth Chan-ocha has said the Thai economy is “steadily improving,” while Uttama Savanayana, leader of the pro-junta Palang Pracharat Party, has vowed to “put practical policies into practice.”
Foreign companies, which provide the investment indispensable to Thailand’s growth, support the military government’s economic policies, particularly infrastructure improvements. “I agree with the policy of accelerating the improvement of roads and ports,” said Stephen Ashworth, managing director of Hutchison Ports Thailand, adding that “infrastructure is necessary to maintain industrial competitiveness.”
Although a stronger economy will improve the junta’s electoral chances, rural areas are bubbling with discontent, whatever the numbers might say.
“The junta deserves praise for bringing political turmoil under control, but its economic policy is unacceptable,” said a vendor in the northern province of Lampang, complaining that his monthly income has plunged to around 4,000 baht ($130) from as much as 20,000 baht a decade ago. “I’m reconsidering whether I should vote for pro-junta forces simply because of peace,” he said.
Many in villages are unhappy because farmers, who make up about 40% of the population, have not benefited much from the economic rebound. Thailand’s agriculture sector contracted from 2014 to 2016, after the junta took power. Droughts and weak crop prices have added to the woes of Thai farmers, many of whom took on heavy debts during the recession.
Policies that lift incomes, such as the subsidies Yingluck Shinawatra’s government paid to rice farmers, are more popular with rural voters than preaching the virtues of fiscal discipline. The former ruling Pheu Thai Party, founded by Yingluck’s elder brother, former Prime Minister Thaksin Shinawatra, has denounced the junta’s economic policies as a failure.
The incomes of salaried workers have also stagnated under the junta, a poor contrast to the nearly 10% annual wage growth under the previous civilian government. A research institute affiliated with Siam Commercial Bank said: “Moves to curb pay increases have spread in the corporate sector, following the previous government’s steep hike of the minimum wage.”
Pro-junta groups have proposed new policies in hopes of wooing farmers and low-income voters from the Thaksin camp. The PPP is pledging to build new infrastructure to eliminate the economic gap between urban and rural areas, and to construct 1 million houses for low-income families. The Democrat Party has called for establishing a minimum annual income of 120,000 baht for factory workers and others.
Longer-term economic challenges include the aging population, which is graying faster than elsewhere in Southeast Asia, and making Thailand’s industries more high tech. Voters will soon have their chance to weigh in on who is best qualified to steer the country’s economy.
By Marimi Kishimoto, Masayuki Yuda
Nikkei Asian Review