- Posted January 10, 2014 by
A Thai Temptation to Self Destruct
Matters of state in Thailand appear to be coming to a head. The Yingluck Shinawatra government is pushing ahead with an election it expects to win on Feb. 2. The anti-democrats who command a surprisingly large, if minority, share of the population (and a good share of the wealth) appear determined to thwart the vote. An election commission decides one way (for a vote) while parts of the judiciary and bureaucracy strike a blow at Yingluck’s party. Financial markets (as reflected in currency and stock values) plummet but the wave of protest demonstrations goes on. Again for the coming week, the call is sounded: Shut down Bangkok!
Now that serious injuries are being reported on the streets once more–even if not where the tourists normally go–the critical travel industry must quietly wish for an imposed peace lest the winter peak season be wrecked. If not actual danger, at least the prospect of another airport occupation is dreaded. (Singapore Airlines is cancelling flights and advisories to travelers have been issued by 45 governments.) Speculation of an army coup, for which there’s ample precedent, rises. Perhaps the generals are waiting for a signal from an ailing king. Or perhaps they will respond to a violent spasm that one specialist on the region thinks is now inevitable.
Even in an era in which many democracies are closely divided ideologically or culturally, it is head-shaking that ASEAN‘s hub economy indeed, a crossroads for so much that goes on in Asia is a nation that may prove unable to govern itself through normal means. So deep are its animosities that many Thais have lost perspective on what made theirs a modern and reasonably middle-class society. This is a country yes, a kingdom with its own major corporations (16 on the Forbes Global 2000 list) and even larger ones from abroad heavily invested within its borders. Can these entities stay clear of a popular penchant for self-destruction? Who will keep away in the future?
If this spectacle plays out in a vacuum, maybe Thailand will soon shake it off as it has so many other disasters. But there is an uneasiness in much of the Asian region, which is coming off the high of years of boom in China and hot inflows of capital from the West and Japan. The Wall Street Journal this week chronicled (beyond its online paywall) an “accelerating selloff in emerging nations.” The WSJ’s graph of outflows from relevant stock and bond markets included other troubled players (e.g. Brazil and Turkey) that make the picture look decidedly worse than the measure here (from Lipper) of asset flows to Asia ex-Japan
A forbes.com contributor, Jesse Colombo, has drawn considerable notice for his arguments that nearly all of Southeast Asia is a financial bubble ready to burst and indeed the Thai indicators have been coming in since about the time he focused there. But Mirae Asset Management, the Korean house recently praised in Forbes magazine, is taking a mixed view of ASEAN markets–sensing political uncertainty but still seeing a demographic advantage. So the region overall may not be vulnerable to chaos contagion, but neither is any economy in it likely to have its boat refloated by a favorable tide rising much higher.
The point being: Thailand has had a decent general economy doing well enough for Yingluck to spend gobs on her rural and still-often-poor constituency and in the process of fighting over the spoils risks throwing itself into a dangerous context. The coming days may be about more than just who will be prime minister.
Source: by Tim Ferguson, Forbes Asia Pacific