BARELY affected by the Atlantic financial crisis, ASEAN’s regional economies are vaulting ahead and presenting sexy business opportunities.
Though still plagued by corruption, Indonesia, the biggest economy in the Association for South-East Asian Nations, is politically stable, buoyant and knocking hopefully at the door of the BRIC club – Brazil, Russia, India, China – as an emergent global power.
Singapore, small, rich and the country most connected to Western markets, has rebounded strongly from a brief but violent recession. And the economy with the most promise, heavily populated Vietnam, has just had its pragmatic communist-led economic management endorsed by the International Monetary Fund and is aiming for robust gross domestic product growth of 8 per cent in the coming year.
But for all the neighbourhood’s prospects and rising consumer classes, there remains a ticking time bomb lurking at its heart: Thailand.
It is seemingly mired in a political crisis that deepens daily with the illness of its remote, all-powerful and much-revered King Bhumibol. At a frail 82, King Bhumibol remains shielded from his 67 million subjects, who are anxious about what will happen when he’s gone.
The last time Thailand was so riven by strife, the aftermath of a violent 1991 military coup, one of 15 on his royal watch, King Bhumibol ended the crisis by summoning the coup-maker and a pro-democracy leader to the palace. The military returned to the barracks and Thailand began 14 years of democracy, the longest stretch in its history, to build one of Asia’s most dynamic economies, where GDP per head is now measured at about $5000.
Thais yearn for a replay to short-circuit the present crisis, now escalating into its fourth year after the generals toppled the thrice-elected Thaksin Shinawatra, handing political and economic control back to the royalist establishment.
But Bangkok is beset by rumours of King Bhumibol’s health, and most of them aren’t hopeful.
The palace is said to be worried that were he to contrive to settle matters a la 1992, the shock of his denuded appearance would have the opposite effect, actualising fears and worsening deep-rooted and probably impenetrable divisions.
These regal mysteries pose inherent economic risk in a country where institutions are shaky and often corrupt, where Abhisit Vejjajiva’s unelected government is unsteady at best, and where the royalist establishment controls the economy.
Since the military-backed Abhisit took office 16 months ago, after luring a dubious faction to his camp to secure a slender parliamentary majority, he has done well to stabilise the economy. He has also sought to woo the rural poor, Thaksin’s franchise. And his government boasts one of the world’s more capable finance ministers, Korn Chatikavanij, JPMorgan’s former boss in Bangkok.
But as the persistent pro-Thaksin red-shirt rallies show, the country is divided as deeply as it ever was, with King Bhumibol in no medical state to play peacemaker-cum-powerbroker. His son and notional heir, Prince Vajiralongkorn, is also virtually absent and, in any event, lacks the reverence and moral authority of his father among Thais.
Indeed, many see him as having suspiciously close links to Thaksin, who is positioning himself as a rallying point for closet republicans who’d like nothing more than to topple the aristocracy.
Thailand’s neighbours find these intrigues alarming. The ASEAN economies are often gathered together by Western investors into a single basket. Turmoil in one too often means reluctance to invest in another. But as people like gormless Australian author Harry Nicolaides know too well, even seemingly harmless discussion of Thailand’s royal dilemma risks breaking the world’s severest code of lese majeste.
Even Thailand’s worried neighbours hesitate to become involved, despite the huge economic and investment risk if the succession goes badly at such a fractious time. The best they can do is shield the impact and silently hope that Thailand doesn’t implode under its own royal inertia.