Conclusion: Thailand at the Margins

The economic crisis and the rise of the Thai Rak Thai Party supplies a paradoxical dénouement to a half-century of rapid Thai economic growth and industrial transformation—as well as to a much longer period of internationalization and general social change. The paradox, however, is not an unsolvable riddle but rather the contradictory character of dependent capitalist development, which inevitably brings destruction along in the train of creation, predicating new possibilities of accumulation on processes of violent devaluation. The Thai political economy now experiences this volatility in virtually full force, having been ‘opened’ and integrated into the rhythms of global capital accumulation over the course of more than a century. The seeming stability and predictable growth of the years between 1950 and 1995 were facilitated tremendously by Thailand’s integral role in the Cold War system, which created various ‘conjunctural’ cushions against the underlying volatility (e.g. US aid, favoured trade status). With the end of the Cold War system, the Thai political economy is now being increasingly thrust into the less predictable world of global neo-liberalism and post-Fordism and is thus less cushioned against capitalism’s ‘gales of creative destruction’. To say this is not to say that growth and industrialization are now on hold. The crisis may well open new opportunities for accumulation and even resumption of rapid growth. But even successful capitalist growth has always done damage to a significant portion of the population—creating and perpetuating enormous socio-spatial disparities—and it will very likely continue to do so in the future. At the same time, the vagaries of the era of ‘globalization’ may make the growth dynamic much rockier than in the past. Boosters of East Asian ‘miracles’ should be reminded that other political economies—e.g. Mexico, Brazil, Argentina—have been regarded as ‘miracles’ in the past, and while these remain important industrial producers today, they would hardly be invoked as models for improvement of livelihoods and social welfare. A legitimate concern regarding many of the Asian NICs, including Thailand, may well be whether or not the international accumulation processes in which they are integrated will lead in the directions previously traversed by so many of the former ‘miracle’ economies of Latin America.

Uneven Economic Crisis, Industrial Restructuring, and the Politics of Development in a Post-Nationalist Era

Up until 1996, the interpretation of Thailand as something at least akin to an economic ‘miracle’ was hegemonic, and the analysis offered here has not so much attempted to challenge this interpretation on its own terms as to offer an alternative interpretation that recognizes why Thailand’s rapid industrialization process can be considered simultaneously a success in capitalist terms and a highly troubled process from other perspectives. The economic events that began in 1996, however, have considerably tarnished the mainstream image of Thailand as a ‘new little dragon’ and have called into question the notion that Thailand’s development has been an unquestionable capitalist success story. The framework I have presented for analysing Thailand’s uneven and contradictory success story can also be used to analyse the dynamics that are at work in the recent bout of economic bust, partial recovery, and post-crisis political manoeuvring. In this chapter, then, I round out the discussion of Thailand’s uneven industrial transformation and the role of the Thai state in this process by suggesting how the dialectically conceived internationalization processes discussed earlier might help to explain the nature of the contemporary economic crisis and the economic challenges that lie ahead. More specifically, I offer here an alternative to the dominant explanations of the Thai economic crisis, which have tended to focus narrowly either on corruption and lack of transparency in the functioning of Thai institutions (the dominant line of analysis emanating from the West and neo-liberals) or on international forces beyond the control of the Thai state, such as currency traders and IMF measures (a prominent line of analysis in much of Southeast Asia and among neo-Weberians). While these lines of analysis vary in where they place the blame for the Thai crisis, they share the view that the crisis is primarily financial and does not reflect deep, underlying structural problems in either the Thai pattern of industrial growth or the place of small industrial exporting countries in the global economy. The analysis I offer here differs from both types of views on a number of counts.

Internationalization of the State under US Hegemony and Japanese Quasi-Hegemony: Promoting Industrialization and Disciplining Labour, 1945–2000

The fashion in which the Thai peasantry was captured has heavily conditioned the development of the industrial labour process and labour markets. Thai workers did not simply appear at the factory gates when and where they were needed and in possession of the requisite skills. Rather, new streams of marginalized peasants began to join older streams of immigrant Sino-Thai workers as the capitalist transformation of agriculture proceeded, and the ways in which these new streams entered the industrial labour force depended in part upon the ways they were removed from agriculture. Beyond this, the state did not merely passively witness the absorption of former peasants into the industrial labour force but actively abetted the process through a variety of measures, ranging from state promotion of industrial development to investment in education and training of workers. The Thai state also actively shaped the labour market through its alternating suppression and promotion of trade unions, a matter addressed in this chapter. The state functions that are integral to the industrial transformation described here were carried out by internationalized segments of the Thai state, including one—the Department of Labour—that would typically be associated with national corporatism, thus illustrating the depth and complexity of the internationalization process. The internationalization of capital and the state around industrial manufacturing development has been more complicated than the internationalization of capital and state in the capture of the peasantry both because of this depth and complexity and because of the overlapping roles played by two hegemons. Whereas the capture of the peasantry was the product of collaboration between Thai and US elites, the disciplining of the industrial labour force involves more multifaceted collaboration among Thai, US, and Japanese elites—as well as transnational statist institutions. Furthermore, there has been some historical phasing of the relative influence of the two hegemons, with US influence declining after the mid-1970s and Japanese influence increasing. Finally, whereas the US intervention in Thailand aimed directly at transforming the structures of state power along with the economy, the Japanese state has been more inclined to make use of the existing state apparatus and to transform its functions, where necessary, through sheer economic power.

Introduction. The Problematic: Territorial State, International Capital, and Uneven Industrial Development in Thailand

Thailand presents a vexingly ‘hybrid’ image of both success and failure. A lay reader of journalistic and academic literature on Thai development could readily be excused for concurring with the opinion of renowned Thai scholar David Wilson, who long ago insisted ‘What damn good is this country—you can’t compare it to anything!’ (Anderson 1978: 193). Indeed, so contradictory are the varying images of the country and the events taking place within it that it often seems Thailand can’t even be compared to itself. This sense of identity crisis has only been heightened by the economic crisis that began in 1996. What had been one of Asia’s miracle economies led the region into bust, leaving many analysts gasping for air. Thus, as the twenty-first century begins, and we look back on the events of the past century, there is a sense of urgency and contentiousness surrounding a very basic question that one might have already expected to be answered: what exactly is this multifaceted and volatile phenomenon called ‘development’ in Thailand, and why does it generate such diverse evaluations? To be sure, some of the contention is due to non-negotiable differences in political perspectives. Yet even granting this, there seems to be less agreement about how to assess development in Thailand than development in many other places. For example, few South Korea scholars, of whatever persuasion, disagree that the country exhibited remarkable and sustained economic growth in recent decades, that this has at least laid the foundations for significant improvements in overall standards of living for most of the population, or that in spite of the crisis the Korean political economy still has substantial potential for further development. Nor, for that matter, do many people disagree that the development process in South Korea was driven forward by an authoritarian state and that issues such as social justice and environmental sustainability must still be addressed. In contrast, interpreters of Thailand’s development experience seem to disagree about such fundamental issues as the importance of state involvement in the process, the degree of well-being which it has bequeathed to the general population, and the future prospects of development.

Internationalization of the State under Japanese Quasi-Hegemony: Marginalizing Northern Workers, 1980–2000

The internationalization of the Thai economy and the Thai state analysed in the last two chapters was—like all processes of internationalization—highly uneven. The modern Thai state was formed historically through collaboration between the Siamese monarchy, based in Bangkok, and British colonial officials, with Chinese merchants playing an important subsidiary role (Suehiro 1989; Chaiyan 1994; Thongchai 1994). By the early twentieth century, internationalization of capital and the state under this triple alliance had already led to the emergence of the Bangkok-centred political economy and strongly centralized state that has characterized Thailand throughout the past one hundred years (Dixon and Parnwell 1991). Thus, by the time rapid agrarian and industrial transformation began to take hold in the post-World War II period, it did so against a backdrop of already substantial Bangkok primacy and political dominance. The patterns of internationalization that have developed in the post-World War II period have largely strengthened this primacy and political dominance. Bangkok was the centre of the new triple alliance based on collaboration between military capitalists, Chinese merchants, and the US Cold War state (Suehiro 1989). As Cold War counter-insurgency and development projects proceeded, significant numbers of displaced peasants left agrarian society to seek urban-industrial employment and, as the overwhelmingly dominant centre of industry, Bangkok received a disproportionate share of the rural-tourban migration stream, with secondary cities remaining small and economically underdeveloped (Tables 4.1 and 4.2; London 1980; 1985). Consequently, the transformation of urban-industrial labour and the labour relations system described in Chapter 3 took place fundamentally in and around Bangkok, which remained the core area of manufacturing growth. For most of the post-World War II period up to 1985, the BMR’s industrial development was centred on low-wage, low value-added products such as textiles, garments, and low end electronics components, and though there were a number of very large firms in these lines, most manufacturers remained very small in scale, this being the case even among investment-constrained exporting firms. Small size was even more the norm with firms in upcountry regions, where manufacturing development was largely very rudimentary and generally centred in industries such as textiles, garments, and food processing (Table 4.3; Department of Labour 1985–6).

State Power Beyond the ‘Territorial Trap’: The Internationalization of the State

The 1980s were marked by two seemingly antithetical tendencies in theorizing about states. On the one hand, a strong neo-liberal current connected with the rise of Thatcherism–Reaganism—which was deeply imbued with neo-classical economic assumptions—called into question the power or competence of states, suggesting that the states which governed best were those which governed least. Advocates of this position who attended to Third World development issues were particularly convinced that the rise of East Asian newly industrialized countries (NICs), such as South Korea and Taiwan, constituted evidence that states could best facilitate economic growth and development by maintaining open, export-oriented regimes in which markets were allowed to work unhindered (Balassa 1981; Little 1981; Bhagwati 1988). On the other hand, by the late 1980s, a school of neo-Weberian scholarship developed in direct response to this neo-liberal approach. Taking issue with the neo-liberals’ characterizations of East Asian economic growth, a series of these neo-Weberian scholars showed that state intervention in the economy was far more extensive than the neo-liberals had allowed, and that moreover such interventions seemed to have been successful in fomenting industrial transformation (Evans 1989; 1995; Amsden 1989; 1990; Wade 1990). The neo-Weberians raised telling arguments and evidence against the neo-liberal position, and it is perhaps a small but significant sign of their success that the World Bank grudgingly acknowledged not only the heavy presence of the state in East Asian industrialization but also some limited efficacy to that presence, especially in the financial sector (World Bank 1993; Amsden 1994; Wade 1996b). If this was a victory for the neo-Weberians, however, it may well prove pyrrhic now that the powerful East Asian growth dynamic has been slowed by forces that few states in the region appear willing or able to control. Indeed, and paradoxically perhaps, the more neoclassically inclined now seem to acknowledge the existence of ‘strong states’ in East Asia and use their existence not to explain economic success but rather to explain the economic crisis that spread through the region during 1997–8.

Internationalization of the State under US Hegemony: Building the Cold War Regime and Capturing Peasants, 1945–1975

A strong argument can be made that the Thai state has been highly internationalized for a very long time. This is in part a function of the breadth and depth of regional trade and migration networks in the pre-European colonial period, many of which integrally involved Thai dynasties (Reid 1988; 1993). David Wyatt argues that the Ayutthaya-based monarchies had a distinctly cosmopolitan flavour, incorporating substantial numbers of governmental representatives from a variety of Asian trading partners, and representation of foreign interests within the royal court continued into the Bangkok period as well (Wyatt 1984). Hans-Dieter Evers has gone so far as to declare the Bangkok-based Siamese dynasty founded in the late eighteenth century to be a fundamentally trade-based regime (Evers 1987). The importance of trade, in turn, strengthened the importance of foreign merchants and advisers within the royal court. The incursions of the British and other European powers into nineteenth-century Southeast Asia contributed to further internationalization of the Thai state, particularly after the signing of the Bowring Treaty in 1855. The reforms of the Thai state launched in this context led to not only a dramatic overhaul of the existing bureaucracy but to the employment of enormous numbers of European advisers. William Siffin, for example, notes that during Rama V’s reign (1868–1910) there were a total of 549 foreign officials who served in the Thai government, most of these serving after 1880. In 1909 alone, there were some 319 foreigners serving in the Thai government, including 6 general advisers, the general financial agent of the government, 21 legal advisers and assistants, 13 director-generals of departments or equivalent, 23 assistant director-generals, and 69 persons engaged in administrative work just below the level of the departmental management (Siffin 1966: 96–7). The role of these advisers in influencing Thai state policies and in representing the interests of metropolitan capital within Thailand has been extensively discussed elsewhere and need not be addressed here. Suffice it to say that their presence manifests the internationalization of capital, while their successful accommodation by Thai elites—who were able to collaborate with them in projects of mutual benefit—speaks to the ways in which the state became internationalized around shared transnational interests (Suehiro 1989; Chaiyan 1994; Thongchai 1994).

Interpreting Post-World War II Development in Thailand: More and Less than a National Phenomenon

The processes of internationalization and political economic transformation described in the previous chapters help explain the specific character of recent industrial development in Thailand. Capital accumulation in Thailand has been centred heavily on Bangkok and has favoured a stratum of ruling elites who are disproportionately represented in the capital. The Bangkok-centric political economy has been tightly linked—indeed, over a very long period of time—with broader regional and international processes of capital accumulation, and the Thai elites have been successful at using international connections to buttress their social positions and control. Bangkok elites, in particular, have been able to utilize international support to strengthen a project of Bangkok sub-imperialism, which has in turn brought various local elites from outside Bangkok into national and international coalitions. All of this has consequences for the results of economic growth and industrial transformation in Thailand. Until the economic meltdown that began in 1996, Thailand’s GDP growth record was one of the most impressive in the world since World War II, and the country was included by the World Bank among the ‘miracle’ economies of East Asia (World Bank 1993), while being lauded by others as ‘the Fifth Tiger’ (Muscat 1994) and as a new entrant into the ranks of the NICs (Jansen 1991). At the same time, Thailand has become one of the more inegalitarian countries in the world, in terms of income distribution (Medhi 1996; Voravidh 1996) and displays a dramatic spatial skew in the distribution of economic activities. There have also been numerous social and environmental problems connected with industrial development in Thailand, along with various political indignities to the general population (Bello, Cunningham, and Poh 1998)—problems that can be seen alternatively as ‘the strains of success’ (UNIDO 1992) or as symptoms of ‘maldevelopment’ (Suthy 1991). To some extent, each of these images of success and failure correspond to a definite reality of the complex development process, neither of which by itself adequately summarizes the totality. What I focus on in this chapter, however, is not the multifaceted complexity per se but rather the connections between what are regarded as the success and failure stories.