At the crossroads - Thailand after the elections

Posted in Asia | 14-Feb-05 | Author: Joerg Eschenfelder

Thaksin Shinawatra speaks to the press at his party's headquarters.

With Thailand’s general election on Feb 5 the election year in South-east Asia’s major countries is over. After Malaysia (March 2004), Indonesia (October 2004) and the Philippines it was now up to Thailand’s 44.8 million eligible voters out of 63.5 million predominantly Buddhist people. And they bestowed their Prime Minister (PM) Thaksin Shinawatra and his ruling „Thai Rak Thai“ party (Thais love Thais, TRT) a historic landslide victory. Thaksin is Thailand’s first democratically elected prime minister who could fulfil a four-year term and win a consecutive one. And he is the first PM who can lead a one-party-government.

The results

Some 33 million people, that are 76% of eligible voters, cast their ballots in a huge turnout. This was more than four years ago with 69.9%.

The TRT won 377 of the 500 seats in the House of Representatives, Thailand’s parliament. The TRT controls now three-quarter of the House and has 129 seats more than in 2001. The leading opposition Democrat Party lost the election, dropped from 130 seats (2001) to 95 and is below the important margin of 100. TRT’s coalition partner Chart Thai lost four seats and has now 26 seats. The newly formed Mahachon could win two seats. Due to the seating the government is now safe from no-confidence debates in the parliament and it can amend the country’s reformist 1997 constitution. Thaksin and his ruling party have now powers not seen since the days of military dictatorship.

TRT won nearly everywhere even in Bangkok, where it captured 32 of the city’s 37 seats. Sole exception was the Muslim -dominated South with the southernmost provinces, Yala, Narathiwat and Pattani. Here the TRT lost all its six seats. All of the 11 seats of Thailand’s South are now held by the Democrat Party (10; 5 in 2001) and Chart Thai (1).

The rise of Thaksin

The financial crisis of 1997 has changed the political landscape in Thailand. After years with an average annual growth of almost 9% in the 1980s and early 1990s the bubble burst and swept away most of the accumulated wealth. This was the time when Thaksin, a former police colonel and telecom tycoon, entered the political arena.

Thaksin is founder of the Shin Corporation, which is now worth more than $2.5 billion, with interests ranging from mobile phones to satellites and the internet. Shin also controls one of the six television stations. The others are state or military owned.

In 1998 Thaksin founded the TRT party, which has a very modern business-like structure. It has a lot of money and political decisions are based on surveys, polls and database analysis. Policies are designed to appeal to the majority of voters — mainly the rural voters.

So it was no wonder that Thaksin promised in his first election 2001 to help the ordinary people and defeated the PM Chuan Leekpai. In his first term he started a lot of populist policies which helped small businessmen and farmers. He postponed debts and allocated millions of dollars in credit for thousands of villages „Village Fund“ for a fresh start. The rural areas improved. The economy recovered and grew by around 6.5% the last two years, making Thailand Asia’s second-fastest growing economy after China. Benefiting from the robust global growth the factories have been running at 75% of capacity in recent months and the unemployment fell from 5.7% (2000) to 1.6% (2004). And in July 2003 Bangkok was able to pay back the $13 billion IMF-loans two years before due-date.

The key to Thaksin's success? He stuck to his agenda and together with his management-like leadership and a business-oriented Cabinet he got things done. The same approach which won him praise after the Dec 26 tsunami and the government’s relief effort: at home and abroad. His approval ratings have rarely dropped below 50% and are currently around 80%.

Thaksin has become a regional lieutenant of the US in the war on terrorism. In August 2003 Riduan Isamuddin, a.k.a. Hambali, the alleged operations chief of Jemaah Islamiah was captured. Thaksin also deployed 470 medical and engineering troops to the US-led reconstruction effort in Iraq leading to Thailand’s first foreign battlefield deaths since the Vietnam War.

The shady side

But there is also another side of Thaksin: a brusque attitude and intolerance of criticism and a hunger for power. He named for example his cousin as head of the armed forces and appointed his brother-in-law as deputy national police chief. He and his family control business holdings which account for around 9% of the market capitalisation of the Stock Exchange of Thailand. If the personal holdings of some of his Cabinet members were also taken into account, the figure goes up to 10% or more.

And there are more controversial policies especially if human rights are concerned. For example the crackdown in drugs. By year’s end more than 2,500 people were killed nationwide. The government accuses criminal gangs; human-rights groups say the deaths are extrajudicial killings. Or the government’s lagging reaction to the outbreak of the bird-flu in the beginning of 2004.

The biggest setback was the unrest in Thailand’s southernmost Muslim-dominated provinces. Thaksin was not able to bring the unrest under control despite sending thousands of troops in the region. The decades-old separatist struggle flared up again in 2004. More than 500 people have been killed since January 2004; around 80 died in October last year from suffocation while they were in military custody.

The coming agenda

Despite his landslide victory Thaksin faces a tough election period. He has to prove that there will be no „parliamentary dictatorship“, he has to keep the economy running, he has to balance between the United States and the regional power players including China and India and he has to solve the national question which he faces in South-Thailand.

It is expected that the economy policy will bring further privatisation — especially of the Electricity Generation Authority of Thailand (EGAT) — and a bill to designate and fast-track economic zones. There will likely be new programs to spend on new roads, subways, water reservoirs, health-care and education. Over the next decade this could — including a second airport for Bangkok — sum up to some $60 billion in spending. But critical will be if Thaksin can provide his voters with enough wealth to pay back their microcredit loans without lending new money.

The main task will be the unrest in the southernmost provinces. This is a question of national identity and needs a broader and smarter approach than just sending additional troops. After the election Thaksin stated that he would not change his policy. Nevertheless Thaksin said he intended to replace his security and defense ministers, without any explanation.


Thailand is on the verge. It can become a new democratic example how an Asian country is able to overcome poverty and religious rifts in the society and how it is able to achieve sustainable broad-based economic growth. On the other hand Thailand could easily fall back with new poverty, new problems, and become another parliamentarian dictatorship, which does not solve its problems, which creates new poverty, an authoritarian leadership and violent, destabilizing quarrels in the south.

Which way will Thailand go? It depends on PM Thaksin himself. The qualities which made him successful in his first four years in office are not necessarily the same qualities which he needs to be successful in his second term. He has always tried to extend his power but now he has to control himself. He is restless and impatient but now he has to take a calmer approach to the south. He put Thailand back on the economy growth path but now he has to make it sustainable.

Thailand is at the crossroads. The voters have decided who should lead them. They gave Thaksin the mandate and the power to solve the core issues. Now it is up to him which way Thailand will go.