- The Washington Times - Monday, March 22, 2010

ANALYSIS/OPINION:

The last time I saw my old friend, she had finally given up on her magazine dedicated to what we used to call “upcountry” householders. She lamented the passing of “paradise,” a Thailand she and I had known in the late 1940s when I was a young reporter for a local Bangkok English-language newspaper. “Rice in the paddy and shrimp in the klong (canal),” as the old saying put it, and all was right with the world.

“Modernity” with all its problems had come to the devoutly Buddhist land, preindustrial but with abundant resources. Rites of passage once required young men to spend months in the wat (temple) with their begging bowls. Every morning, my friend along with most other housewives — seeking to “make merit” toward a future existence through charity — were at their doorsteps dishing out rice and Thai curries to them.

But now the klongs in sea-level Bangkok are filled — originally by a corrupt French contractor — which produces continual flooding. The stench of diesel replaces cardamom drifting from night markets with the worlds most exotic menu. One might have eaten in Yaowarat, sarcastically called “Chinatown.” For since the advent of cheap ocean passage after the opening of the Suez Canal in the mid-19th century, Bangkok was a Sino-Thai city, flooded with South Chinese immigrants.

Modernization, of course, had its benefits. Health standards improved. The arid northeast no longer survived by sending migrants to the capital. In recent years, investors saw Thailand as Southeast Asias auto manufacturing center, not just the world’s top rice exporter. Thai-processed delicacies were snapped up by housewives worldwide. And Thailand became a destination for sophisticated European tourists, replacing the ‘60s backpackers who came just for pot and sex.

But all this is threatened by a social breakdown. Several decades in the making, it reached a crescendo in 2006 with the fall of Prime Minister Thaksin Shinawatra. Ironically, the billionaire politician was brought down by his neighbors, the Singaporeans. Singaporean “Mentor Minister” Lee Kuan Yew — who styles himself as leader of a squeaky-clean regime — does not follow the adage admonishing Caesars wife to be above suspicion. For it was his daughter-in-laws Singaporean sovereign fund, Temasek, that blew up Mr. Thaksin.

Temasek, moving away from funding of Singapores manufacturing base — eroded in no small part by China — has gone farther afield. In Bangkok, Madam Ho Ching, the wife of Singaporean Prime Minister Lee Hsien Loong, who is Lee Kuan Yew’s son, negotiated an under-the-table $2-billion-plus deal for Mr. Thaksins telecommunications empire.When Mr. Thaksin and his family escaped paying any taxes on the deal, it was too much for Bangkoks Sino-Thai professional elite, fed up with unlimited corruption. They supported a military takeover. When Mr. Thaksin won another election, he was ousted again.

But Mr. Thaksin had long since won over the rural population through a populist program that included medical services. Gone is the old division of labor — Bangkok Sino-Thai families dominating the bureaucracy but rural ethnic Thai rising through the military. (Mr. Thaksin, unlike yesteryears Sino-Thai, makes no bones about his Chinese origins, even going on a traditional kowtow to South China to his grandfathers grave.)

Out of office but not out of money — even though a court recently seized $1.5 billion, about half his formal Thai holdings — Mr. Thaksin has been encouraging his supporters from exile. Clashes between his Red Shirts followers and their Yellow Shirts opponents — far too reminiscent of Germany on the eve of Hitlers takeover — threaten law and order. The beloved but aging King Bhumibol Adulyadej is increasingly powerless to play his traditional referee role.

During the Vietnam War, a prominent Thai general told me his country could successfully continue to assimilate Chinese immigrants if the U.S. assured regional security. But now, not only is there a threat in the south where Muslim Malay ethnics link with internationalist jihadists, but Chinese no longer arrive only by sea and air. More and more, the Chinese export juggernaut is plowing into Thailands markets — with trade growing 20 percent annually. The old political isolation along the northern border with southern China is disappearing as Beijing pushes communications and development south along the Mekong River.

Destructive violence — billions of dollars in tourist revenue already have been lost since 38 countries issued travel warnings — could spell disaster.

The Thais have a cautionary tale in neighboring Myanmar. There military thugs for decades have squandered human and material resources. Myanmar’s repressive regime is Beijings ally to which it supplies weapons and a market for oil. And Washington is no longer Southeast Asias big brother. An Obama administration preoccupied with domestic troubles and two wars seeks only accommodation with Myanmar, as it has with other old antagonists.

Thailand, like so much of the rest of the world, is now adrift in a welter of conflicting domestic and world currents. Long gone are the days of the national leitmotif “mai pen rai” — “Never mind, it is not important.”

International Business Editor Sol Sanders, veteran foreign correspondent and analyst, writes weekly on the convergence of international politics and business-economics.

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