Billionairism and the middle class beast

3 September 2001

The prime minister insists his government is not "populist". Chang Noi agrees. The original populists were American parties committed to agrarian reform and uplift. The word was later applied to Latin American dictators who appealed to the urban poor. Both usages imply a party whose sole or main focus is the poor.

The Thaksin government is much more complex. At heart, it is "billionairist". It is a collection of big businesses which survived the crisis, and which realise they need government help to manage globalisation. Most are in the service sector which has the best prospects for growth in the medium-term. Many are in telecommunications and media. These industries deliver high profits (and hence survived the crisis better than most) because they are cartelised by government regulations. Business and government are inseparable. Already this government has crunched a project designed to undermine the overpricing of mobile phone services. It is quietly cancelling the compensation demanded from telecom companies who will not have to share revenues with government after 2006. According to one estimate, this little gift is worth about 100 billion baht. Media liberalisation is stalled.

The critical year is 2006, when Thailand has to liberalise telecommunications and other service industries under commitments to the WTO. The billionairist objective is to remain in power to manage that process. Immediately Thaksin escaped the constitutional court, he began to talk about securing a second term. Previous governments have struggled to complete one. The billionarists need the second term because of 2006.

This is not new. Big business has clung closely to government for fifty years. The innovation of Thai Rak Thai lies elsewhere—in the realisation that billionairism needs a bigger political base in this democratic age. The party created a policy programme by asking little people what they wanted, rather than deciding what was good for them. It has implemented new policies at a speed which was supposedly impossible. The prime minister communicates to people with an openness and casual intimacy which makes his predecessors seem like bureaucrats carved from teak. For the medium term, the party has an economic strategy—workable or not—which attacks the structure of poverty and inequality.

It is a daring strategy. In sum it says: let me and my friends use state power to make lots of money, in return for which we will do our best to help you. It amounts to taxing the middle class (income tax payers, mobile phone users, time deposit holders) in order to give to the rich on the one hand and the poor on the other.

For the moment, the strategy is working. No government has ever been so popular. It may go on working for some time. But there are two sources of potential trouble.

The first are the local bosses. For fifteen years they have had good access to the cabinet. They secured a better and better slice of the government revenue inflated by the economic boom. They devoted themselves to putting Thailand under concrete or asphalt. Suddenly, things have changed. The budget has shrunk. Their political access has deteriorated. Their leaders (Snoh, Banharn, etc) are still present at court, but not as powerful as before. Thaksin will come under great pressure to approve projects (industrial forests, dams, power plants) of dubious benefit. These approvals will be justified on grounds of "development" and pump-priming. But they will sacrifice the support of the moral leaders of society who know these projects are dubious and damaging.

The second source of trouble is the urban middle class. Politically this is a strange beast. For most of the time, it does nothing but eat and sleep. But every now and then, it becomes aroused and throws its weight around. The political turning points of the past decade (1992, 1995, 1997) all had a similar pattern. Activists took to the streets. The press created a crescendo of criticism. Urban middle class sympathies shifted. The government buckled. The word krasae (trend, wave) was adapted to describe this special political pattern.

Controlling the media is an attempt to manage krasae. But it does not address the root causes which stir the middle class beast to action. The basis is simply economic. When times are bad, the urban middle class gets itchy. In 1991-2, Suchinda was acceptable until the economic indicators began to slide. In 1996-7, Chavalit was tolerable until the baht shrivelled. Thaksin is raising expectations that things will get better very soon, and it will be very difficult for him to deliver. Already there are signs of minor itchiness, such as the outcry over the sheer savagery of an extra 2 baht on the expressway fee.

The economy may be the real cause, but when the middle class beast complains, it is about public dishonesty. This is rather subtle. Most of the time, the urban middle class accepts that most politicians are, well, politicians. But when the itchiness starts, something suddenly becomes intolerable. In 1992, Suchinda "went back on his word" that he would never make himself premier. In 1995, Chuan would not accept responsibility for the land scandal. In 1996, Banharn seemed to have plagiarised his MA thesis. In 1997, Chavalit would not come clean over the constitution or the economy.

When the beast lurches into action this time, things will not be the same as in the 1990s crises. The new constitution gives the premier more power to resist. More importantly, Thaksin has changed the economics of money politics. Nobody can match his power to log-roll a coalition and finance an election. Most important of all, no other party has an idea which matches Thai political realities as well as the billionairist strategy. Before long, the local bosses and the middle class beast will stir up the dust. But will it matter?