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Thailand: From Fat Cats to Red Shirts

How Wall Street's crash stoked Thai class rage.

The fugitive ex-premier’s machinations aside, many inside the Red Shirts’ encampment would gather to swap their own hard-knock tales.

Shop owners lamented disappearing customers. Day laborers groaned that gigs had dried up. “I’m a car salesman and I can tell you, the economy has gotten awful. The worst it’s been in a long time,” said Kit Somwut, 62, who attended the rallies in late March. “The government hasn’t helped the poor and, now, we have no choice but to drive them out.”

Disaffected protesters have contrasted recent economic doldrums to the 2001-2006 reign of Thaksin. Those years were buoyed by healthy global markets and the regional recovery from a 1997 Asian financial crash.

Thaksin also doted on the hardscrabble, rice-farming northeast, offering small loans for entrepreneurs and installing $1-per-visit health care plan. Under his premiership, the number of Thais struggling under the regional poverty line — about $35 per month — fell from nearly 13 million to 7 million, according to the World Bank.

“Thaksin was able to portray himself as the source of the prosperity Thai people were experiencing,” Warr said. “He’s a brilliant businessman.” The ex-premier wouldn’t fare as well if he had to contend with more recent economic conditions, he said.

The current ruling party, the Democrats, has governed under a much more punishing economy. It came to power in December 2008 on the eve of a hard economic crash. The following quarter suffered a 7.1 percent year-on-year drop in GDP. The manufacturing-heavy export sector sustained much of the damage and, compared to the previous year, an additional 173,000 Thais went unemployed.

All the while, the Red Shirts’ guiding leadership preached that Thailand’s government has mismanaged the economy and ignored the poor.

Thailand’s finance minister, Korn Chatikavanij, claims the Red Shirts have distorted economic facts to rile up followers. The government, he said, countered the economic crisis with Thailand’s largest-ever stimulus package, a $44-billion bundle of infrastructure and social welfare projects aimed in large part at Thailand’s poor.

The unemployment rate under the current party has also fallen to 1 percent, lower than in any year during Thaksin’s rule. Even in May, a month scarred by political violence, exports jumped more than 40 percent compared to the previous year.

The ruling party hasn’t received enough credit, Korn said, because of its bleak representation in Thailand’s northeast farming country, the heartland of anti-government sentiment.

“We have very little popularity, very little understanding, in that region,” Korn said. He compares this situation to that in the U.K., where leading parties have had scant representation in relatively poorer Scotland.

“Take a few steps back, look at other political structures, and you’ll see it’s not that strange,” Korn said. “But we have a lot of homework to do ... and we need more time to correct this.”

Much of Thailand’s northeast farming region belongs to a demographic considered “post peasants”: a laboring class with mobile phones, satellite TV hook-ups and a growing consumer appetite.

Their hunger for a more modern life is encouraged by the relative luxury they witness in Bangkok, where many migrate for work. More than half of these northeast families are supported by cash sent from family members working in the Thai capital or abroad, according to the World Bank. Still, the region’s average household income is only about $400 compared to Bangkok’s nearly $1,100.

Government spokesmen insist that the current job-creating stimulus will attract more voters to their side. But few analysts see the current leadership gaining fans in rice-farming country. In past visits, when party leaders’ motorcades have arrived, they’ve been greeted with hurled feces and rotten vegetables.

Subduing this class and regional resentment through negotiations with Thaksin now appears impossible.

Under claims he’s funded armed elements within the Red Shirts, the government has charged Thaksin with terrorism, a crime punishable by death. Not all of the governing party’s politicians have warmly endorsed the “terrorist” label now fixed to the fugitive former premier.

“My logical mind says that, if you say Mr. X is responsible for everything that’s happened, the only conclusion is that you must deal with Mr. X,” said Sukhumbhand Paribatra, Bangkok’s governor and a member of the governing party.

“This [terrorism charge] makes it very difficult to deal with him now,” he said. “How can you deal with an international terrorist?”