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Thai history repeats itself


IN the late 19th century, old Siam under King Chulalongkorn confronted a threat from European imperialism. The King had to find a way to guard independence, while resisting European ambitions for political and commercial gains.

As Anand Panyarachun, a former premier, wrote (Time magazine, Aug 23-30, 1999): ''To confront the colonial powers openly would have courted disaster; to shut off his kingdom from the outside world and

oppose foreign concepts and thinking would also have led to catastrophe.''

What was the choice of King Rama V then? ''King Chulalongkorn decided on a third option, constructive engagement with the colonial powers. He did this by opening up the country to the West through skilful diplomacy, yielding concessions without giving up sovereignty. The King was also buying time to consolidate his power through a modernisation drive.'' Under the King's leadership, Siam was ushered into the 20th century as a gentler and kinder nation.

King Chulalongkorn could not have imagined that a century later history would repeat itself -- the same pattern but with different details. Thailand is now facing the same dilemma that old Siam confronted in the 19th century. This time the threat comes in the form of globalisation, brought about by the revolution in information technology and the force of liberalisation.

Capital flows created by globalisation have benefitted and wreaked havoc upon Thailand. New IT products, developed elsewhere, are transforming the way business is conducted. Technological change has come so fast that Thailand is finding it difficult to catch up. Trade liberalisation under the World Trade Organisation is posing an ncertain future for Thailand.

Still reeling from the pain of the economic crisis, modern Thailand is not in the best position to confront the dilemma of having to deal with globalisation. The crisis has forced it, under the tutelage of the International Monetary Fund, to undertake radical structural reforms. It is unthinkable for the country to shut its door to globalisation. But if Thailand is not careful, it will be economically colonised, completely dependent on external factors for survival.

One by one the Thai banks are falling into the hands of foreign banks. The retail sector is filled with foreign giants, driving the local retailers out of the scene. Ownership of auto companies has already been turned over to foreigners. Liberalisation of the IT sector by 2006 under the umbrella of the WTO will also make way for the big foreign players.

How will Thailand cope with this dilemma? It seems that the present Thai leadership has not yet done any serious thinking about it. Globalisation is an issue. Its challenge comes with capital flows, IT and the revolution of financial services. In all of these areas, Thais have very little knowledge. In a way, the IT that comes through the Internet and other modes of communication looks like a two-headed monster, at once friendly and predatory.

Practical as Thais are, it is very likely, however, that we'll be following King Chulalongkorn's advice by taking the third option of constructive engagement. Thailand will have to continue to open up its economy through liberalisation and structural adjustments, giving up the sectors in which it is not competitive and building up the sectors in which it has strength.

Thailand cannot afford to commit the past mistake of trying to excel in every business sector. It is good enough to engage in a small number of sectors, say tourism, agribusiness or other services, and do it well. Incomes created from these competitive sectors will be used to purchase goods or services that Thailand cannot produce. This is the way to go to guard Thailand's independence in the 21st century.




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