Thailand: Business in the Provinces and its Political Power

1998

Craig J. Reynolds

Bangkok is such a domineering presence in Thailand that one can easily forget about the rest of the country. In fact, provincial business played an important, if unassuming, role in propelling the economy forward in the period of growth that ended with the financial crisis of 1997. Symbolic of the political power of provincial business were the governments of the late Chatichai Choonhavan, an entrepreneur from the northeastern province of Khorat, who was Prime Minister from 1988 until early 1991, and of Banharn Silpa-archa, a businessman from Suphanburi province, who was Prime Minister from July 1995 to November 1996. The current Prime Minister, Chuan Leekpai, heads a political party which has its electoral roots in the south of the country. Some large-scale regional projects, such as the Eastern Seaboard Zone, are better known than others, not always for flattering reasons. Planning changes and delays have plagued this particular project, and the environment along the eastern seaboard has been damaged by rapid growth and the lack of regulation. The Suranaree Industrial Zone, which opened outside the northeastern provincial centre of Khorat in 1989, is a privately-operated development that came about because of the national connections of the local MP, Chatichai Choonhavan. As of 1995, about one-third of all the businesses registered in Thailand were in the provinces. The increasing share of business that grew in the provinces during the 1980s and early 1990s brought forth local strongmen who flourished by manipulation and force. As elsewhere, new money can be tough and aggressive. Cash, rather than reputation, became the measure of one's worth, and the local strongmen, known as "godfathers" and viewed as crass outsiders by the Bangkok elite, fostered a rough-and-ready approach to politics that sometimes led to violence. The second generation of this "new money" has been more refined and arguably less violent. But gambling, liquor distribution, prostitution and the exploitation of forest reserve land continue to be important sources of wealth for provincial figures. The idea of a moral boundary between legal and illegal activity is a middle-class urban notion that has little meaning in provincial Thailand. A godfather's engagement in criminal activity does not normally cause ordinary people to refrain from seeking his patronage.  

WATCHPOINT: Provincial business in Thailand, along with provincial political power, is destined to recover in the intermediate to long-term.

 

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