Now that Thaksin Shinawatra appears actively back in Thai politics, it is demoralizing to look back at Thailand’s wasted time and opportunities. Once a promising country on the way from democratic transition to consolidation in the late 1990s, Thailand has become semi-autocratic, and its rocky political trajectory over the past two decades is now structural. The traditional institutions of power that grew out of the Cold War called the shots in earlier decades and are just unwilling to let the country move forward in the immediate years ahead.
Thailand’s ongoing decline began when Thaksin and his political party machine posed a challenge to the old order in the early 2000s by directly engaging the rural masses. When his Thai Rak Thai Party won the 2001 election by a near-majority, the ruling elites gave him a chance because he pledged economic recovery from the 1997-98 economic crisis, resulting in unprecedented policy innovations from universal healthcare, rural microcredit, cluster development projects, niche industrial policies in food, fashion, tourism, healthcare, and automobiles. When he won re-election by a massive landslide in February 2005, Thaksin’s meteoric popularity rivaled the top echelons of the establishment. Yellow-clad street protests against Thaksin from August 2005 led to the September 2006 military coup.
That coup—Thailand had had a dozen by that time since 1932—was supposed to reset the scene with a short-term caretaker government, a new constitution, and fresh elections. But it did not work out that way. Although Thai Rak Thai was dissolved by the Constitutional Court in May 2007, its successor, the People’s Power Party, still won the election by another near-majority in December 2007 while Thaksin was in exile. This led to more yellow-shirted protests and the judicial dissolution of the People’s Power Party.
The disenfranchised voters of Thaksin’s parties became the red shirts who protested and were violently suppressed in 2009-10. In the July 2011 election, Thaksin’s sister, Yingluck Shinawatra, led the third banner under the Pheu Thai Party to a majority victory and took office. In 2013-14, the Yingluck government faced another round of yellow-shirt protests and was ousted by another military coup in May 2014. Unlike 2006, this coup was unusual by Thai standards because the military took over the government directly and stayed for the long haul as the royal succession loomed. Five years of military government produced a pro-establishment constitution in 2017, which led to the election in March 2019 and four more years of military-backed government under junta chief General Prayut Chan-o-cha.
Many young Thais who came of age during the Thaksin years and the two coups saw that their future was being lost and lined up behind the newly formed Future Forward Party, calling for reforms of the military, monarchy and other traditional institutions. Future Forward was duly dissolved in February 2020, sparking protests among young Thais, which were suppressed. The May 2023 election witnessed Future Forward’s successor, Move Forward, spectacularly winning and beating Thaksin’s Pheu Thai. Yet Move Forward was similarly disbanded in August 2024.
The recurrent pattern of military coups and judicial dissolutions indicates that the old guard behind traditional institutions will not give up power without a fight. In fact, since October 2016, the old guard has been increasingly assertive and interventionist. But the tide of history is against them as younger voices and cross-generational and nationwide sentiments for change, reform, and modernization appear inexorable, kept down for now by draconian legal measures and constitutional means. This is why tension and confrontation will underpin the Thai political scene in the medium and longer-term until this chasm between the old guard and the “new gen” is resolved.
As Thailand’s political malaise deepens and awaits a reckoning, the Thai economy has been in the doldrums. Although the government of Prime Minister Paetongtarn Shinawatra urgently wants to get the economy moving again, Thailand’s trend growth has declined from 4-5 percent in the early 2000s to 1.6 percent during 2014-23, with rising household debt of 91 percent and public debt above the 60 percent threshold. The Paetongtarn government, under her father Thaksin’s watch after his return from exile in August 2023, will be hard-pressed to fully implement its 10,000 baht (about US$290) digital wallet for all 45 million designated Thais to boost consumption, promote a “land bridge” to link the Gulf of Thailand and the Andaman Sea, “soft power” projects, and free-trade agreements.
The paramount objective will be to entice foreign investment. Policy formulation has been fluid with patchy implementation. Thaksin’s strategic preference has been prioritizing income redistribution and populist measures to regain electoral ground. Unlike two decades ago, Thaksin has not been talking about the kinds of structural reforms and economic upgrading Thailand needs in the 2020s-30s, such as digitalization, supply chain adjustments, AI development, and other ICT areas. His recent speeches sounded out of tune, unlike the reforms espoused by Prachachon (People’s) Party, the third banner after Future Forward and Move Forward. Prachachon has proposed decentralization, the breakup of monopolies, SME promotion, upskilling, and plug-ins to supply chains amid the US-China geoeconomic conflict.
Unsurprisingly, Thailand’s international standing has diminished over the past two decades of domestic political instability. With the enviable position of being congenitally close to China and a treaty ally of the United States at the same time, Thailand is unique among its regional peers for having maintained its independence without colonization. Such independence enabled Thailand to deftly navigate Western domination and communism through the two world wars and the Cold War.
This geostrategic pathway has shaped Thailand’s foreign relations. Joining the US camp during the Cold War to thwart communist expansionism, Thai-US relations were critically bolstered with two mutual defense treaties in 1954 and 1962. From 1960 to 1997, the Thai economy registered 6.5 percent in annual growth, much of it driven by US foreign investment, tourism, and development aid. In the 1980s, Japanese foreign direct investment crucially increased, especially after the 1985 Plaza Accord. By the early 1990s, Thailand’s three largest export markets were the US, the then-European Community, and Japan.
The structure of the Thai economy transformed from agricultural-based to manufacturing and services. Despite the economic crisis in 1997-98, this trend continued into the early 2000s when Thailand became a manufacturing hub. But then Thailand got stuck in a prolonged period of political volatility and lost growth opportunities in 2006-24, marked by two military coups, judicial interventions, and fraught elections whereby the powers-that-be did not allow winning parties to run the country. The military-backed governments in 2014-23 moved Thailand closer to China as Bangkok was alienated from Western democracies as well as Japan. This period marked Thailand’s lowest international standing, while its traditional leading role in the Association of Southeast Asian Nations (ASEAN) dimmed correspondingly.
Consequently, the Thai economy is structurally stuck in the middle-income trap and has lost out on the recent semiconductor and tech innovation boom to competitors such as Vietnam, Indonesia and India. Moving forward, Thai domestic politics will be the key to future growth or cause of worsening economic stagnation. As long as there is a semblance of democratic rule rather than outright military authoritarianism, Thai foreign relations will be more balanced and omnidirectional. The more Thailand turns autocratic, the more its ruling elites will have to rely on China for legitimacy and support.
Thitinan Pongsudhirak is a senior fellow of the Institute of Security and International Studies at Chulalongkorn University.
This article first appeared in The Bangkok Post.
