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Thailand on the brink at the worst possible moment

Crown Property Bureau has become a national obsession

| Thailand
Pro-democracy protesters gather outside Siam Commercial Bank headquarters on Nov. 25: Protest leaders are calling on Thais to close accounts at the bank.   © Sipa/AP

William Pesek is an award-winning Tokyo-based journalist and author of "Japanization: What the World Can Learn from Japan's Lost Decades."

It is rarely a good sign when "French Revolution" internet searches trend higher while an economy bleeds red ink. Welcome to Thailand's 2020, as protesters turn on the globe's wealthiest monarch.

We are not talking guillotines in the market square. The Bastille in the sights of these storming activists is the Crown Property Bureau, housed in a sprawling 19-century European-style mansion in Bangkok's Dusit parliamentary district. Since protesters cannot get inside the palace walls, they are also targeting a proxy: Siam Commercial Bank, in which King Maha Vajiralongkorn is the biggest shareholder.

The executives running Thailand's most valuable lender are probably hating 2020. But this latest escalation by protesters, who also want Prime Minister Prayuth Chan-o-cha to resign, is a problem not just for 2021, but for Thailand's 2031. I shed no tears for junta-leader-turned-politician Prayuth. Since the general and his men grabbed power in May 2014, they have proved to be "The Gang That Couldn't Govern Straight." If you are going to instigate a coup, it is best to have a plan.

Prayuth claimed to be restoring order to a chaotic political system so Thailand could move forward. Thailand's 70 million people have seen too much chaos and too little movement. Prayuth's men are far more concerned with stopping Thais from flashing the three-finger Hunger Games salute than raising living standards. They worry more about Generation Zers posting protest selfies on Instagram than about raising Thailand's economic game.

Now, as they feel more besieged than ever, odds are law-and-order will take even greater precedence over retooling so that the economy can thrive 10 years out. Thailand would be in a much better position to fend off COVID-19 fallout if Prayuth & Co. had implemented the reforms they said no one else could do. Yet exports and tourism, which account for 70% of gross domestic product, are sputtering. An added problem: a strong baht that is generating its own headwinds as 2021 approaches.

The baht's 8% rally since April speaks to the upside-down vibe for one of Southeast Asia's most event-rich political systems. For all its challenges, Bangkok's current-account surplus makes Thailand a safe haven of sorts in times of global turmoil. That has Thailand's biggest industry group urging controls on capital inflows. The bigger problem, though, is that the government's neglect of upgrades is sure to turn off long-term investors, the ones Bangkok really wants.

Prayuth's 2014 coup was actually part of a cycle. That power grab was, in part, about correcting an earlier coup in 2006. Though the Land of Smiles has had a dozen coups since the 1930s, the post-2006 vacuum arguably did the most economic damage.

No tears for Thaksin Shinawatra either, the telecom billionaire-turned-prime-minister ousted that year. He had spent the previous five years bending government institutions to the benefit of his business empire, Silvio Berlusconi-style. But between Thaksin and Prayuth came eight governments that made few dents, if any, on the inefficiencies holding per capita income below $8,000.

That is 14 years Thailand cannot get back. Making this lost time all the more tragic is that it happened on China's watch. It was during this period that Asia's biggest economy pivoted from the world's factory to a technological powerhouse. It was during this period, too, that Indonesia, the Philippines, Vietnam and other neighbors raised their competitive games.

The king's increasing role in this drama augers poorly for Thailand's ability to multitask. As Prayuth's men tighten their grip on society -- from street barricades to curbs on Facebook -- when might they find the time to invest in education and training, reduce red tape and corruption, make it easier to start a business, and increase competitiveness?

Anger over these failures, and the king's opulent spending, are fusing together in unpredictable ways. Thailand's strict lese-majeste laws criminalizing insults against royal family members were suspended in 2017. Police are now reviving the law to arrest demonstrators.

Protest leaders are calling on Thais to close accounts at Siam Commercial Bank, where the king holds 23.4% of the shares in his own name. The Crown Property Bureau, meantime, has become something of a national obsession. The reason: it had estimated assets exceeding $60 billion when the king took the throne in 2016.

The Crown Property Bureau has become something of a national obsession.   © Getty Images

Though the property bureau dates back to the 1930s, its contents became the king's personal property in 2017. That unthinkable wealth is now quite the flashpoint. Among protesters' demands: pulling certain palace properties under the control of the Ministry of Finance. There are calls to reduce the monarchy's budget in proportion to the damage COVID-19 has done to the economy.

This bull market in palace intrigue adds to Prayuth's headaches in 2021. This Thai government barely got anything done before the pandemic. It hardly held the place together before a whiff of revolution filled the Bangkok air. How can investors trust that moves are afoot now to build the economic muscle Thailand will need to confront the world in 2031?

If Prayuth's men do not work harder, faster and with a bit of vision, their legacy will be turning the Land of Smiles into the Land of Frowns.

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