THE QUIET REVOLUTION
Eric Ellis

12/08/1993

THAILAND is going through a political revolution. It's quieter, perhaps, than that of a Hungary, a Russia or a South Africa, but to Thais no less profound.
Eighteen months after Thai students were gunned down in Bangkok by another in the traditional cycle of military governments, Thailand has remarkably re-invented itself into a near model of a developing democracy, with just a breather in its economic dynamism.

Along the way, the five-party coalition led by soft-spoken cleanskin country lawyer Chuan Leekpai has managed to survive two no-confidence votes, replace a troublesome coalition party, and so far confound any amount of doomsayers predicting a collapse of his still fragile administration.
Indeed, such is the way average Thais have taken to a transparency of government unique in most memories that Deputy Prime Minister Mr Amnuay Viravan jokes that "Thais are getting tired of all the debating that is going on".

But there's no pleasing some people.

In a sentiment that hard-hit Australians might find difficult to comprehend, many Thais are complaining about the so-called "recession" that has slowed the economy down from a galloping 10-11 per cent growth from 1987-1992 to a still robust 7.5-8 per cent.

"You can't keep everybody happy. Some people still hanker for the easy money days of the 1980s," said Harvard-educated Mr Savuit Bhotivihok, senior Minister assisting the PM on investment and the economy.

"This slowdown may be no bad thing. We sometimes need to collect our thoughts."

Mr Olarn Chaipravat, president of the powerful Siam Commercial Bank, which has close links into government, forecasts that Thailand will sustain 7-8 per cent growth "for the foreseeable future".

The Finance Minister, Mr Tarrin Nimmanhaeminda, has forecast Thailand 1994 economic growth of "at least" 8 per cent.

In a recent interview, Mr Chuan said one of the biggest achievements of his administration so far had been a return of international confidence, which had taken a pounding at the all-too-frequent site of tanks on Bangkok's streets.

"Since this negative image has been reversed, we have been steadily building up economic strength and momentum," he said.

But like its neighbours in the Association of South-East Asian Nations, Thailand faces very real threats from cheaper and potentially greater emerging dragons like Vietnam and southern China.

Thailand's competitive edge as a vast source of cheap labour is being chipped away.

Fuelled by a labour shortage, the shop-floor wage in Greater Bangkok has doubled to $A10-12 a day, as much as three times higher than Vietnam and still double China.

The Japanese, Taiwanese and Hong Kong investment in light industry that has Thailand thinking of itself as Asia's newest industrialised economy is being lured elsewhere.

Foreigners are reacting with their cheque books.

While actual applications to invest have more than doubled in the past year, the capital value has declined suggesting the big players that Thailand needs to propel itself to industrialisation, are opting for cheaper locale.

A Western diplomat who tracks the economy said: "They got a real shock when they saw how much foreign investment has fallen in Malaysia, where the wages have just got too high for many."

Like other neighbours, Thailand is confronted by the next stage in its economic emergence, the challenge of charting a transformation from light industry such as textiles and component manufacture to high-technology.

Siam Commercial Bank's Mr Olarn said: "We can no longer afford to watch the world go by and rely on sheer luck as we did during the economic boom in 1987-91."

It may be that Thailand's biggest obstacle is its own history of bad government.

Foreign investors frequently complain of the lack of an adequately-educated workforce and of slipshod planning, both legacies of self-interested and corrupt administrations.

The Chuan Government has responded by investing heavily in education. The budget allocation to schooling has been increased by 15 per cent.

Students must stay longer at college, from six to nine years.

Bradley Babson, regional manager for the World Bank, said: "They are making attempts to clear bottlenecks but there is still much to be done."

Australia remains a Thai trading partner of middling importance. Thailand is Australia's 12th largest export market, a position which has improved from 20 in 1990.

In the 1992-93 year, Australia sold $A1.2 billion worth of goods, mostly gold, dairy products, wool and some crude petroleum.

That was 46 per cent higher than the previous year, enough to get Austrade officials in the Bangkok Embassy to talk hopefully of a breakthrough.

However, the figures were somewhat distorted by a 230 per cent increase in the export of Australia gold, some $A206 million and it is unlikely that such meteoric rises can be sustained.

In return, Australia bought $A756 million worth of Thai goods, mostly seafood products, plastics and textiles in a more modest 17 per cent increase on the previous year.

The corporate links go beyond trade.

Major Australian firms are represented in Bangkok - names like BHP, Transfield, Pacific Dunlop and three of the big banks (although Westpac is scaling down considerably, a curious move given Thailand's vigorous financial sector).

Qantas is the third largest carrier at Bangkok's Don Muang Airport, which is the largest overseas hub for the national airline.

The Australian Thai Chamber of Commerce has more than 200 members though chamber chairman and Qantas country chief Roger Lindeman said: "We can always do with some more."

As Thailand grows richer, there are signs it is expanding into mature markets itself by direct investment.

Big players in their own backyard of Indo-China, Thai firms are spreading their wings into Australia.

One of Thailand's biggest companies, Siam Cement, has established a trading company in Sydney while a Thai consortium is negotiating a stake in northern NSW coal mine.

Australia is also recognised as a burgeoning tourist market. The decline in the Australian dollar against the baht has made it the third most popular destination for travelling Thais.

Some 36,000 visited in 1992, 36 per cent higher than previous year and the first six months of this year has seen a 45 per cent increase on that.

Australian officials expect the numbers to be in the hundreds of thousands by the turn of the century.