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Thailand readies to hold its first post-coup elections on March 24, an event postponed several times by the ruling junta. (Photo by Kosaku Mimura)
Cover Story

The 99% election: Thais are worse off after five years of military rule

Ranked the world's most unequal country, a divided Thailand heads to the polls

KHON KAEN, Thailand/BANGKOK -- When business started to sag a year ago at the shoe factory where she and her husband work, Nui Kalathai began to borrow money from relatives in her village in Khon Kaen, one of the largest provinces in Thailand's northeastern plateau. She has been careful to ask for only small sums -- 400 baht ($12.60) one day, 200 baht on another -- to help cover daily expenses like eggs and dry rations. "It's so hard to survive with little cash," says Nui, who has a 10-year-old son. "I also have borrowed from two money lenders in the factory."

Nui's family is not the only one feeling a cash squeeze. In Chai Nat, a rice bowl in Thailand's central plains, and Phatthalung, a palm oil and rubber-growing province in the south, conversations often turn to financial hardship with little prodding.

Somsak Thangphon, a rice farmer, expects to reap more losses than rewards from his ripening green paddy field shimmering under the late morning sun in Chai Nat. With rice prices hovering between 6,000 baht to 7,000 baht a ton -- his best years were between 2011 and 2014, when government support pushed the price to 15,000 baht per ton -- he is barely able to cover his costs. Somsak has drained his savings and now lacks the cash needed to cultivate his crop of white rice.

Without Shinawatra-era farming subsidies, rice prices have dropped for Thailand's nearly 4 million rice-growing families. (Photo by Kosaku Mimura)

It is no different for rubber -- a key product for Thailand, the world's largest producer and exporter of the commodity. A price slump is squeezing Don Phummali, a rubber cultivator, who grumbles at being reduced to selling a kilogram of unsmoked rubber sheets at 40 baht a kilo, half of what he got in 2014.

For many in Thailand's rural heartland, life has become harder under the junta that assumed power in 2014. Now, as Thailand heads toward its first post-coup election on March 24, it is the country's factory workers and farmers -- including nearly four million rice-growing families -- who appear to be shaping the terms of the political debate.

Thailand's poll, which has been delayed five times by the junta, will mark the return to a semblance of democracy after nearly five years of military rule. Confidants of the generals are hoping voters will focus on what they regard as their greatest success: restoring political peace in a deeply polarized country.

But it is the junta's economic record that is foremost on the minds of the majority of the voting public, who have watched as Thailand became the world's most unequal country during its rule.

Prime Minister Prayuth Chan-ocha, the gruff junta leader, is nonetheless campaigning on a message of stability as he seeks to become the head of an elected government. A 157-page book detailing Prayuth's record echoes his promise to "return happiness to Thailand," a pet theme ever since the powerful former army chief staged Thailand's 13th successful coup since the absolute monarchy ended in 1932.

The coup put a lid on nearly 15 years of political clashes between two broad camps, one drawn from the well-heeled, ultra-royalist elites concentrated in Bangkok, and the other from the economic have-nots and struggling middle classes in the rural north and northeast. The latter group has remained staunchly loyal to former Prime Minister Thaksin Shinawatra, who lives in exile.

Those old political divides burst into the open again in February, when a new political party supported by Thaksin nominated Princess Ubolratana, the older sister of King Maha Vajiralongkorn Bodindradebayavarangkun, as its candidate for prime minister.

The nomination of the princess was typical of Thaksin's penchant for seeking to undermine the junta, whose leaders have emphasized their loyalty to the palace. But her candidacy was rebuked only hours later by the monarch, and the princess quickly withdrew her name -- leaving the fate of the Thai Raksa Chart party that backed her hanging in the balance.

This brief, unusual episode has added to lingering questions over whether the election will even be held at all.

Supporters of Thai Raksa Chart, a Thaksin-linked party, rally in Bangkok on March 1. (Photo by Kosaku Mimura)

The junta's plan to campaign on political peace, which has been achieved more through intimidation than reconciliation, will be a test of its sway over the more than 50 million voters who will go to the polls. It is expected to resonate with the country's affluent middle class, which has backed the last two coups. This constituency, says Yukti Mukdawijitra, a sociologist at Bangkok's Thammasat University, "doesn't need elections for their well-being."

But it is an unlikely vote-winner among those who depend on a robust farming sector to thrive. "I don't care who is in government, but they must know how to run the economy -- not like now," said a visibly frustrated Kannikar Asawarat, owner of a farming equipment shop in Nakhon Sawan, a major trading town in central Thailand. "It has never been this bad. My sales are down 80%."

Rural sentiment hits rock bottom

That is not the only inconvenient sentiment facing the generals, who are angling to extend their influence through Palang Pracharat, a proxy party. A clutch of recent economic reports depict the scale of the economic pain. According to the Ministry of Labor, some 260,000 workers were laid off in 2018, pushing to half a million the number of job cuts since 2017. They were largely in agriculture, furniture manufacturing and rubber products. Analysts expect more pain to come, especially if U.S.-China trade tensions continue.

These figures are on top of the loss of an estimated three million overtime shifts during the first four years of the junta's rule, according to a study by Siam Commercial Bank. "The economic sentiment is at rock-bottom in the northeast, and companies are cutting bonuses, not paying overtime, and not hiring," said Rene Pitayataratorn, head of a company in the electronics sector in Khon Kaen. "Some companies are not even upgrading, and some not even changing lightbulbs once the old one burns out."

The consequences of such malaise are reflected in another measure: household debt to gross domestic product. It reached 77.6% in 2018, a marginal decline from the high of 80.8% it hit in 2015. Studies by Thai universities paint a grim picture of households whose average monthly income is 27,000 baht -- the majority of homes in rural Thailand -- bearing nearly 180,000 baht in debts. One estimate places it even higher, at nearly 317,000 baht per household -- the highest since 2009, when the world was gripped by financial crisis.

Thailand's rubber factories have been hit by falling prices for the material. (AFP/Jiji)

Meanwhile, the National Statistical Office reveals that the bottom 40% of Thai households saw their incomes decline between 2015 and 2016. The trend continued in 2017, according to the Bank of Thailand, despite steady improvement in GDP growth since the coup.

But the gains from that growth are not benefiting everyone. Thailand is sitting on a fault line of gross economic inequality, notes Banyong Pongpanich, chairman of Kiatnakin Phatra Financial Group. In December, the respected business leader alarmed the political establishment by noting that Thailand had become the world's most unequal country during the junta's rule.

"In 2016, the 1% richest Thais (500,000 people) owned 58.0% of the country's wealth," he wrote in a Facebook post. "In 2018, they controlled 66.9%, overtaking their peers in Russia whose wealth share fell from 78% to 57.1%," he wrote, citing the findings in the Credit Suisse Global Wealth Databook 2018.

The report portrays Thailand as a Russia-style oligarchy, and Banyong's decision to publicize its findings earned him little praise among the junta's economic mandarins.

"I am not surprised about the criticisms against my comments on inequality," the 64-year-old said in his 22nd floor office, which overlooks an upscale commercial district in Bangkok. "The report is just one piece of evidence showing that the inequality problem has been happening for such a long time."

The political parties campaigning for seats in the 500-member lower house are not tone deaf. They are hoping to tap into this broad swath of disaffection to tailor messages on the campaign trail. Political posters have mushroomed across the country promising to address economic problems. "Time to end economic crisis. No more debt," reads one.

There are 77 parties competing in the election, and they broadly fall into three camps: the pro-junta, anti-democrats; the anti-junta, pro-democracy parties; and those loyal to the establishment who are sitting on the fence.

The junta's legacy of inequality has even prompted the Democrat Party, a conservative and pro-establishment party whose members helped pave the way for Prayuth's putsch, to speak out. "Clearly, the economy has underperformed. Many people in the rural areas and agriculture sectors even had their incomes decrease over the last four years," former Prime Minister Abhisit Vejjajiva, leader of Democrat Party, told the Nikkei Asian Review.

Iconsiam, a $1.65 billion riverside retail complex, opened in affluent Bangkok in late 2018. (Photo by Akira Kodaka)

In a biting critique, Abhisit told the media last year that the junta has turned to "empowering people with rich resources to lead the economic system, like a train engine dragging along the rest of the carriages." But it did little to prompt a shift in prosperity, since "the engines alone are the fast runners, leaving the rest vulnerable."

His dig was directed at the billions of dollars the regime poured into infrastructure projects and other ventures to boost the flagging economy. These policies, including tax breaks, benefited the ultra-wealthy Sino-Thai clans, further cementing the ties between the generals and the oligarchs. But as the election looms, the regime has had to change tack, offering more cash totaling billions of baht to the economically marginalized through a slew of pro-poor policies to win support for Palang Pracharat.

'It's not a free campaign'

This economic fault line has become fertile ground for the country's largest political party, Pheu Thai, which headed the elected government the junta deposed in the coup. The party is the latest avatar of a succession of political parties launched by Thaksin, a former telecommunications tycoon and patriarch of the country's most influential political clan. It has won all general elections since 2001, which saw Thaksin head the first elected government to complete a full term before being ousted in a 2006 military coup. Thaksin fled the country subsequently to evade jail in connection with corruption charges. He dismissed the verdict, saying the case was politically motivated and that the trial was not fair.

But Thaksin, a politically polarizing figure, has continued to influence Thai politics from afar. This has made him the nemesis of the country's ultra-royalists and establishment elite drawn from the bureaucracy, the military and the wealthy in Bangkok. But he has remained popular in the rural heartlands, where his gamble to back the princess's brief political foray triggered excitement. Its failure has not shaken their loyalty to his political brand.

As prime ministers, Thaksin Shinawatra, left, and sister Yingluck, right, traditionally claimed the votes of rural north and northeast Thailand.   © Kyodo

His younger sister Yingluck followed in his footsteps: elected as prime minister in the 2011 general election -- Thailand's last completed polls -- only for her caretaker cabinet to be ousted in the May 2014 coup, fleeing into exile to avoid jail in a case brought afterwards. The case targeted her government's lavish rice-pledging scheme, which offered to buy a ton of rice at 15,000 baht ($470), well in excess of the market price, as a way to boost farmers' incomes. Such pro-poor policies helped the Pheu Thai win most of the seats in the vote-rich north and northeast, but cost the Thai state 500 billion baht ($15 billion) and were rife with corruption, according to her critics.

The junta's allies, who drafted the country's latest constitution -- the country's 20th so far -- and the new election laws, have had the Shinawatras in their sights. The upcoming elections have been tinkered to keep Pheu Thai at bay by imposing harsh restrictions to prevent parties from offering pro-poor pledges to woo voters. It has prompted Pheu Thai's candidates in Roi Et, one of Thailand's poorest provinces, to tiptoe around these limits by talking about inequality.

"It is not a free campaign, so we are left with reminding voters who has become richer and poorer under military rule," said Nisit Sindhuprai, a Pheu Thai leader in Roi Et, as he planned his campaign in the fore-room of a provincial hotel. "People want the elections to choose a government that gives them economic hope."

The inequality issue has "become much more prominent than previous elections, where the focus was on growth," said Chris Baker, a Thai-based scholar. (Photo by Kosaku Mimura)

Seasoned observers have been struck by the unfurling of the inequality banner in such a strident manner. "It has become a significant issue and much more prominent than previous elections, where the focus was on growth," said Chris Baker, a Thai-based scholar who coedited "Unequal Thailand: Aspects of Income, Wealth and Power," a recent publication. "This marks a big change in the political conversation and is a defining feature of this election."

But the sea change also points to a concession by the junta, which has been prickly about any criticism of its performance -- including public events discussing inequality after the coup. Such gatherings, the junta admonished, fomented social conflict. Baker's book launch in Bangkok had to be canceled after the regime threatened to send troops to stop the event.

Not surprisingly, the junta's firm grip on Thailand's political life has fed anxiety in some quarters. An emerging concern across Isaan, as Thailand's northeast is known, is the fate of the March elections -- and by extension, democracy in Thailand.

"There is anxiety that this election may be postponed if the military government finds an excuse, like the way it delayed the polls many times," says Saowanee Alexander, a sociolinguist at Ubon Ratchathani University in the northeast. "It is still a rumor, but in Thailand the truth begins with rumors."

Nikkei staff writer Apornrath Phoonphongphiphat in Bangkok contributed to this report.

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