Chuan caught between a rock and a hard place

Perhaps out of respect for the poor, Prime Minister Chuan Leekpai deliberately avoided mention of Thailand's strategy for the "new economy" in his address to the Foreign Chambers of Commerce and Business Associations in Thailand on Wednesday.

He emphasised the need for Thailand to build up its competitiveness if it wants to lay down the foundations for future prosperity.

But in doing so, he could not afford to give the impression that the government would be promoting the establishment of a two-tiered economy. One is represented by the more modern and technologically-advanced manufacturing sector, and the other by the agricultural sector that employs more than half of the Thai people and uses primarily basic farming techniques with lower productivity.

This is a dilemma that Chuan and other Thai leaders have to deal with. For balancing the interest between rural folk, most of whom are still struggling with their daily life, and town folk is a politically noble task. The past decades of economic development have failed to bring the majority of Thais a higher living standard and better education and health care. Without social and economic equity, it will be impossible for democracy to flourish.

"We have therefore attached priority to the restructuring of our agricultural sector - this, to complement efforts already underway to restructure 13 of our key manufacturing industries," Chuan told the gathering of top-notch business leaders.

Ideologically, he made it clear Thailand would not make a policy U-turn from free market principles, which should also provide adequate consumer protection and prevent business or economic monopolies. These principles have been laid down more conspicuously since the Anand government.

Yet the new millennium also signals the move into top gear of the age of globalisation and the IT revolution, which are fast changing the face of this planet. Unfortunately, these forces come at a time when Thailand - its industrial and manufacturing sector in particular -- is still suffering from the economic crisis. Thailand is ranked 33rd among 47 countries in terms of competitiveness in a survey by the Swiss-based International Institute for Management Development.

So another equally difficult policy challenge for Chuan is to bring Thailand on board the globalisation trend. To do so, his government has committed itself to financial, legal and other structural reforms to rectify the flawed practices and structures of the past. This important task has won Chuan very few friends, creating instead a host of enemies. Chuan and his fellow Democrats are facing the growing prospect of a hostile electorate. The financial and business establishment also hates the Chuan government, for the reform measures have taken their toll on their vested interests.

Ironically, long-term foreign investors appreciate the reform efforts that the Chuan government has been doing for Thailand, which are good for business and the economy and will strengthen the foundation for long-term growth and stability. But a big thumbs-up from the foreign investors is the last thing Chuan would want. With nationalism popping up from time to time, Chuan and his finance man, Tarrin Nimmanahaeminda, have been viewed as politicians who favour foreigners at the expense of Thais.

Certainly, ordinary Thais, who have been hit hard by the crisis, don't appreciate the legal and regulatory framework that will change Thailand for the better five or 10 years from now. In the past, they were condemned to live in poverty anyway. What they are more concerned with is their pay cheques, which are meagre these days. They are not happy. They want to vote the Democrats out next time.

But if Thais in general ask whether they will have more basic rights, political freedom, better choices of work, better education and health care and a stronger economic and legal system with good governance five years from now, the answer is certainly a big yes. But nobody wants to wait for another five years for the answer. This is what politics is all about.

BY Thanong Khanthong