Rescuing Thailand: look inward or outward?
September 15, 2000
Last week Kosit Panpiemras,
the executive chairman of Bangkok Bank, identified the dilemma facing Thailand:
we step back and adopt a more inward-looking mode
to prepare ourselves for the worst, or should we continue to embrace the free-wheeling capitalism which comes with globalisation?
"We have to
accept the reality that we are a poor and developing country,"
"This is the first
important point upon which we need to reckon.
second reality is that we have completely lost our ability to become a leader of
is no problem with his first observation.
is still a poor country with about 30 to 40 million of
its 65 million
population working in the agricultural sector.
output accounts for only 14 per cent of
total gross domestic product.
implies that the majority of the Thai people are having a tough time maintaining
a decent standard of living.
second observation is more controversial. He did not
make clear the degree to which Thailand should withdraw itself from the
globalisation process, manifested in the new standards, rules, regulations and
technologies of the more advanced countries.
emphasised, however, that if we did not protect ourselves well enough but
continued to join global capitalism in its pure form, we would get hurt again.
this inward looking mode of thinking has been gaining ground against the
fearsome forces of globalisation.
year after the financial crisis in 1997, Virabongsa
Ramangkura, the polemical macroeconomist, repeatedly called for the top
policymakers to turn their backs on global rules and regulations and to do
things the "Thai way"
get Thailand out of its financial mess.
has suggested that the authorities relax banking standards:
in the capital adequacy ratio and in income recognition in the case of missed
would like to see the capital adequacy ratio brought down from 8.5 per cent to 4 per cent and the banks' income recognition be extended
from three months to 12 months in
case of its borrowers' missed repayments.
he also urged the banking authorities to pursue a weak baht policy to boost
forget the foreigners and focus on looking at ourselves,"
"How are we going to
survive in the future? How can we help out the banks or the corporations? It's
no use pursuing international standards when it is impossible for Thai banks or
companies to do so.
economy won't recover fully in eight to 10 years during
this down cycle.
question is how we are going to live through it."
a group of academics and activists, led by Dr Seksan Prasertkul, also called for
the political parties to spell out clearly in their economic platforms whether
they would like to lead the country down the road of the "Washington
this group, it is an either/or decision, a leap of faith of the country into a course
of its own or of other people's designs.
The Washington Consensus was crafted by
US policymakers who are urging countries around the world to join globalisation,
to use the dollar in their international reserves, to embrace unfettered free
trade and the free flow of capital.
Bangkok Consensus banks on "a sufficient
restoration of the political, economic and social rights of working Thais, and a
focus on community and rural development.
would refrain from using exports or the financial sector to forge Thailand's
Prasarn Trairatvorakul, the secretary-general of
the Securities and Exchange Commission, has not featured prominently in this
debate over the nation's direction, but he cautions that any move toward the
extremes is undesirable for Thailand.
"We know that
globalisation can be very brutal, but it can be very beneficial,"
"We have to try to strike a
the same time, we cannot close down our country to the outside world.
we fully open up our country, they'll come in and take it all.
we resist opening up our country, we'll be going nowhere.
is a difficult and very complicated question."
Sila-orn, the chairman of the Stock Exchange of Thailand,
blames the present mess in Thailand on a lack of will to cope with change.
would like to see the Thai people stand up to face the challenges that come with
inward looking mode will only leave Thailand behind in the catch-up game for a
higher standard of living.
"For how many years have we
been paddling in the pond, which is leading us nowhere?"
"We have to improve
ourselves and embrace change, otherwise we'll miss the bus."
Minister Tarrin Nimmanahaeminda has been acutely criticised as a child of the
it is true that he has been working very hard to put Thailand back on the
structural reforms under his guidance over the past three years are aimed at
laying down the groundwork for Thailand to become a stronger nation, with
internationally accepted rules and regulations and standards.
"I am doing
everything to restore confidence in this country,"
"Without confidence, we
cannot recover fully from the economic crisis.
you don't like it this way, just tell me another way."
By Thanong Khanthong