Thailand: State Enterprises And Government Business


Dr Anthony Diller

Thai newspapers have been running front-page pictures of two familiar sorts. One kind shows a crowd of protesting workers, many of them women, raising placards and banners urging the government to stop privatising their industries. A second type of picture shows a political leader, such as Prime Minister Chuan Leekpai, huddled in urgent conversation with upset-looking colleagues. These may be coalition partners pondering another defection from government, such as Social Action Party's recent one, or power-brokers unhappy with resulting cabinet reshuffles.

Nor is it just the papers that place worried politicians side-by-side with state-enterprise (SE) protesters, such as those of Thai Airways, the Electricity Generating Authority (EGAT) and the Petroleum Authority (PTT), to cite recent front-page cases. These workers, numbering in the tens of thousands, will continue political activity into the next elections-the first under a new constitution designed to replace vote-buying with issue-focused campaigning. Politicians count these workers as their constituents and as part of their campaign strategies.

SEs go back a long way in the Thai polity. Traditionally, the Crown conducted much foreign trade and supervised production of trade goods. It founded companies, such as Siam Cement. Agricultural expansion was vigorously promoted by state-controlled irrigation and canal works, such as in the Rangsit area north of the Bangkok airport. Rice surpluses both enriched key officials and provided them with large personal cohorts. Thai attitudes regarding power and merit are such that if those in charge behave considerately, providing basic amenities in a secure environment, then, by karmic agency, workers tend to behave as a devoted entourage.

Some of these dynamics still apply. They impart a culturally local perspective to the arguments heard globally on privatisation, both pro and con. Of course, as elsewhere, the Thai press may bemoan the inefficient, outdated and unresponsive record of many SE's, along with their debt load reaching 2% of GDP. On other occasions, editorials raise the familiar spectres of foreigners seizing control, absconding with profits and threatening national security. The International Monetary Fund (IMF) is a particularly cogent villain here. But in addition to these familiar themes, the protesting workers in the pictures and the Thai editorials may air further concerns: political patronage and welfare payoffs.

SEs such as EGAT and PTT have included advanced programs of social welfare: on-site childcare, medical facilities, gyms, job security and even libraries. Part of the 'inefficiency' of Thai public-sector enterprises might thus be explained by provision of Western-style social welfare benefits. These would be hard to find in private-sector operations or as maintained for the public by the Thai state.

The political impact of Thailand's 50-odd SEs lies partly in their web-like allocation under various ministeries. For example, PTT, the Petroleum SE, is under the Ministry of Industry while Electricity is split between the Prime Minister's Office and Interior. Tobacco falls under Finance; Plywood and Cold Storage, under Agriculture and Cooperatives; Textiles, Preserved Food, Batteries and Glass, under the Ministry of Defence.

More complex still, some SEs have evolved into empire-like conglomerates. Bang Chak Petroleum, under a charismatic technocrat-entrepreneur CEO, first opened retail petrol stations, then set up station-based 'Green Lemon' mini-marts and finally established rural production units to supply the 'Green Lemons'. The ledgers of this particular SE are well in the black and its social welfare record is good. Few in this wide-reaching conglomerate would join the government in wishing it dismembered and privatised.

Outrage both from the political heights and from SE workers on the ground is not hard to account for when Finance Minister Tarrin Nimmanhaeminda, following IMF guidelines, ordered SEs to prepare for privatisation in line with his 'State Enterprise Corporatisation Bill'. Under this, Ministers across the spread of coalition parties are effectively told to hand their SEs over to Tarrin, who will sell them off and keep the money for Finance, or perhaps use it to inject into selected critically-ill financial institutions.

WATCHPOINT: Will privatisations be pushed through in spite of increasingly strident political opposition and popularist protest? If so, how will this affect the elections?


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