by Baker Chris
Figure 13: American servicemen on R&R leap ashore into the arms of Pattaya’s ‘Hawaiians’.
Estimates of the number of prostitutes in Bangkok ranged up to 300 000. The interior minister, General Praphat Charusathian, wanted even more because they attracted tourists and boosted the economy. Until the late 1950s, Thailand had no organized tourism industry, only 871 tourist-standard rooms, and only 40 000 foreign visitors a year. In 1959, a tourist authority was formed as part of development planning. In the early 1960s, a new runway was built at Don Mueang airport to accommodate jets. Total foreign visitors grew rapidly to over 600 000 by 1970, when tourism was ranked as the fifth-largest earner of foreign exchange. The largest group of visitors was American. The mid-1960s saw a frenzy of hotel building, which added over 7000 rooms.
The city changed in shape, style, and tastes. New suburbs clustered around the schools, shops, cinemas, and clubs catering for westerners. Elite Thai families were attracted to the same areas because of their perceived status and their rising property values. Foreign goods – and especially American brand names – acquired new status value. The American era redefined what was modern and aspirational, especially for the urban middle class.
Development and capital
The US set out to develop a free-market economy to cement Thailand into the US camp of the Cold War.
President Truman introduced the word ‘development’ in his inaugural speech in 1947. Sarit understood its role as a key concept of the US global mission, and as a new and powerful justification for the power of the nation-state – ‘progress’ translated for the American era. His regime converted the new Thai coining, phatthana, into its watchword: ‘Our important task in this revolutionary era is development, which includes economic development, educational development, administrative development, and everything else’. Sarit popularized slogans such as: ‘Work is money. Money is work. This brings happiness.’13
Sarit welcomed a World Bank mission to Thailand after his first coup. Its report was transformed into Thailand’s first five-year development plan, launched in 1961. The plan condemned the state-led development policies pursued since the late 1930s and announced: ‘The key note of the public development programme is, therefore, the encouragement of economic growth in the private sector’.14
The US helped to set up a new bureaucratic infrastructure for promoting development – a planning board, a budget bureau, investment promotion machinery, and a restructured central bank. US advisers arrived to help run them. Sarit also scrapped Phibun’s labour legislation and initially suppressed labour politics completely. But US advisers counselled a more subtle approach. Sarit’s government instituted many new regulations governing urban labour, and established a labour bureaucracy to administer them.
The first Thai recruits to the new technocracy had often been educated in the old world. But the USA began to create a new generation of technocrats who shared an American viewpoint. Several senior officials were taken to the USA for training. Around 1500 went on Fulbright or similar grants between 1951 and 1985. The numbers attending US higher education rose from a few hundred in the 1950s to 7000 by the early 1980s.
The early economic plans had three aims: intensify exploitation of Thailand’s natural resources to deliver growth; transfer some of the resulting surplus for investment in the urban economy; and facilitate foreign investment to acquire technology. US firms were allowed 100 per cent ownership, while other foreign investors were limited to a minority share. US firms began to set up in Thailand from the late 1950s, but the volume of US investment was modest – confined mostly to mining and petroleum firms, a few consumer businesses, such as Coca-Cola, and projects directly connected to the war in Indochina. For most US capital, Thailand was too remote, unknown, and risky. The main beneficiaries of this capital-friendly development strategy were the Thai–Chinese entrepreneurial groups, which had risen since the 1930s.
The emergence of new business groups had begun tentatively before the Second World War. The ‘Big Five’ rice traders built integrated trading businesses, and a handful of long-settled Chinese families ventured into manufacturing. These groups developed relationships with the new post-1932 politicians that enabled them to survive and strengthen through the turmoil of the war and its aftermath.
The process of accumulation quickened from the war years. Many businesses suffered in the war economy, but a few profited spectacularly. Some Chinese entrepreneurs refused to cooperate with the Japanese because of their invasion of China, but others were tempted by the profits and grateful for the relaxation of Phibun’s anti-Chinese constraints. The Japanese military worked directly through the Chinese Chamber of Commerce to secure wartime supplies. Some firms did very well. A handful of shophouse scrap-metal dealers, for example, were boosted by the extraordinary demand for scarce metal. After the war, one of them (Phonprapha) progressed to importing and then manufacturing Japanese cars; another (Sahaviriya) became Thailand’s largest steel maker; and a third (Asdathon) developed expertise in making sugar-crushing machinery and became a major sugar miller. In 1945, one prominent businessman was shot dead in the street, probably due to resentment against wartime profiteering.
The forced withdrawal of European firms provided another source of opportunity, especially in banking. Chin Sophonpanich was a shophouse trader who shuttled between Bangkok and China. During 1944–45, he was part of a syndicate that had suddenly found the capital funds for a whole range of new ventures, including gold trading, liquor, cinemas, match manufacture, and banking. He helped to set up systems of currency exchange and remittance to replace the services of the departed European banks. In 1944, Chin’s group founded the Bangkok Bank, one of seven banks formed around the armistice.
The economic pace slowed in the post-war disorder, but then quickened with the pan-Asian Korean War boom of 1950–52 and the growing US economic patronage of Thailand. The new banks became central to an emerging business class. After the Chinese revolution in 1949, their main remittance business dwindled and they refocused on the domestic economy. Through the 1950s, they formed upcountry branch networks that collected the savings of farmers and local traders. They used the proceeds to invest directly in new business opportunities, and also to loan to associated families. They developed Asian regional networks, which collected trading information. Along with other entrepreneurs, they made friends with the generals who came to power in 1947, and hence gained protection and also access to profitable business opportunities. Bangkok Bank took off after the generals found government funds to help it over a liquidity crisis. The Phonprapha car import business prospered after the government bought its buses and ordained that all taxis should be Nissan. The Techaphaibun family built a liquor empire from distilleries, which the government sold off cheap.
The banking families and their associates took the lion’s share of the succession of new opportunities that appeared in the era of US-directed ‘development’. The policy to develop agricultural exports and drive the agrarian frontier through the uplands (see below) created new opportunities in crop processing and export. The Wanglee rice-trading family became one of the biggest exporters of upland crops. The Chiaravanon family, which had begun importing Chinese seeds in the pre-war period, built mills to convert the new crops into animal feed, and then developed an integrated chicken farming business, which became the country’s largest business empire, the Charoen Pokphand (CP) group.
By the 1960s, demand from the growing urban economy, and government policy to replace imports with domestic manufacture, created a new range of manufacturing opportunities. Families that had once been importers now invited their foreign partners to invest in local factories to overcome import barriers. In 1962, the Phonprapha family persuaded Nissan to set up a car assembly plant, followed by another for Yamaha motorcycles two years later. The Sahaviriya, former scrap-metal dealers, started making nails and barbed wire, expanded to construction steel in the late 1960s, and then took a Japanese partner for more complex pr
oducts. In 1960, the Chokewatana family, which had begun importing Japanese products during the war, persuaded the Japanese Lion group to join in production of toothpaste and detergent, and added other similar ventures to its Sahapat consumer goods empire through the 1960s.
Demand for services soon followed. The Chirathiwat family had pioneered modern retail development since the late 1940s, but took off after opening its Silom Central department store in 1968, catering for a new enthusiasm for western goods in the era of American patronage. The Omphut family, which had earlier owned liquor shops and agencies, invested in a string of massage parlours, cinemas, hotels, and restaurants to cater for a new demand for entertainment among American visitors and local patrons. The family later transferred the proceeds into retail (the Mall group) and banking (Bank of Asia).
A few of these rising entrepreneurial families (for example, Lamsam and Wanglee) had roots back in the late 19th-century boom in rice, timber, and regional trading. Most, however, had arrived, usually with nothing more than the proverbial ‘one pillow and one mat’, in the inter-war period when immigration surged as China’s economic and political crisis deepened. After the 1949 Chinese revolution, the route back to the mainland home was closed. Families concentrated on building their family and business futures in Thailand. They prospered by exploiting their own family labour, saving hard, reinvesting heavily in their businesses, prioritizing their children’s education, developing family networks, and drawing on political contacts.
Around 30 family groups dominated this era through their privileged access to capital and political favours. They became business conglomerates by diversifying into property, hotels, hospitals, finance, insurance, and other ventures to provide occupations for sons (and sometimes daughters). Leading lights of these families took prominent roles in speech-group and welfare associations. They exchanged marriage partners, crossing old boundaries of clan and dialect. They invested in one another’s ventures to share profit and risk. The 13 banks, which persuaded the government to ban new entries and exclude foreign competition, towered above them all. Their deposits grew at an average 20 per cent a year for 20 years (the 1960s and 1970s). The four largest accounted for most of this growth, and each had hundreds of subsidiary companies, many accommodating the ruling generals on their boards. Below this elite sprawled a mass of smaller shophouse family enterprises with similar origins and aspirations.
In 1966, the American scholar Fred Riggs described the new Thai–Chinese business elite as ‘pariah entrepreneurs’,15 condemned by their ethnic origins to low social status and political subordination to the bureaucrats and generals. In fact, the situation was more complex and less rigid than this judgement suggests. The legal framework for incorporation into the nation-state was now fixed. Children born in Thailand (that is, second generation) qualified for nationality, and their children (third generation) gained full civic rights, including voting, entry to parliament, and service in the armed forces. Some distinguished, long-settled Chinese families who had roots in the 19th century or earlier, were by now firmly embedded in the ‘traditional’ elite. They intermarried with royal-related families, and supplied some of the most prominent civilian and military officials, professionals, educators, and technocrats. They also sometimes acted as brokers for the new men of the Chinese community. The Sarasin family, for example, had become one of the most prominent bureaucratic families in the post-war era. Yet Pote Sarasin also acted as patron of one of the most remarkable new entrepreneurs, Charoen Siriwattanapakdi, who rose from humble origins to dominate the liquor business. Pote invested in Charoen’s businesses, guaranteed his loans, and helped him to acquire the status equal to his rising wealth. Similarly, Anand Panyarachun, who was descended from one of the great Hokkien families of the late 19th century via an alliance with a prominent Mon family, started his career on a classic pattern of European education and the foreign service, but then joined one of the major conglomerates and became an important figure in the diplomacy between government and big business.
The new business elite families overcame all difficulties through money and political connections. For the mass of recent immigrants, the nationality issue was more vexed. Although the route back to China was closed in 1949, hopes that this might be temporary faded slowly. Families naturally retained pride in their culture, and attachment to the language and customs they knew. The protagonist of a 1969 novel on Bangkok’s Thai–Chinese said: ‘We shall remain Chinese wherever we find ourselves’.16 The language of everyday business, especially in the vast mass of shophouse family firms, remained Chinese, especially Teochiu.
The state’s insistence that the immigrant Chinese merge themselves into the nation, particularly by adopting the Thai language and displaying political loyalty, was rooted in the ideology of a unified, imagined ‘Thai culture’. In the short term, the delay in granting full civic rights, and the occasional public attacks on the Chinese, helped bureaucrats and generals to extract gatekeeping fees and to resist pressure for political participation. The post-1949 identification of ‘China’ with ‘communism’ added another dimension, which the US patrons encouraged. But this situation could only be temporary. As a result of inter-war immigration, the Chinese and their lukjin descendants dominated the urban population. Promotion of urban-biased economic development made them wealthy. Eventually, numbers and money would have political impact.
The uplands frontier
In 1961, Headman Li banged the drum, and the villagers came to the meeting.
‘I Headman Li will now inform you what this meeting is all about;
The authorities have ordered all villagers to raise ducks and sukon’.
Grandpa Si with the shaky head asked: ‘What’s this sukon?’
Headman Li answered like a shot,
‘A sukon, yes, it’s just an ordinary puppy, a puppy, an ordinary puppy’.
The joke in this hugely popular song turned around the word sukon. It means ‘pig’, but is a fancy Sanskritized word found mainly in official reports and dictionaries. The song satirized the 1960s’ passion for ‘development’ under which officials from a remote, urban culture began telling villagers what to do.
The second transformation of Thailand’s rural landscape and society began after the Second World War. After a century of the rice frontier, land in the Chao Phraya delta and other smaller rice-bowls was fully occupied. Moreover, with better food, no warfare, and some control of epidemic diseases, population growth had spurted up to 3 per cent a year by the 1950s. Under these pressures, the frontier moved beyond the rivers and coastal areas into the upland plains.
Most of the area beyond the river valleys was still covered by forest. Malaria and other diseases were still a deterrent to settlement. Most of those who died building the Japanese railway in the western forests during the Second World War were taken by fever. The upper slopes of the hills were inhabited by hill peoples, including Karen, Hmong, Yao, Muser, and Akha. More trickled in, particularly in flight from the turmoil in southern China. From the Second World War onwards, these areas were connected to the international drug trade, enabling hill communities to obtain a cash income from opium cultivation. Loggers trawled the forests for valuable timber.
Between the highlands and the floodplains were large areas of undulating upland plains. The largest expanse was in the northeast, the Khorat Plateau, covering almost a third of the country’s territory. Other areas were found on the fringes of the river systems. Three changes begun in the 1950s pushed the frontier out of the lowlands and into the upland forests. First, the Malaria Eradication Programme reduced malaria deaths from 206 per 100 000 in 1949 to 2 per 100 000 in 1987. Second, the USA sponsored the construction of highways as part of its war campaign in Indochina, beginning with the Mitraphap (Friendship) highway, cut from Bangkok into the northeast during 1955–57. Third, the new development strategy prioritized more intensive use of Thailand’s natural resources. Dams were built for power and irrigation. Mines and agribusinesses were granted go
vernment promotion subsidies. Restrictions on logging were removed to supply match, paper, construction, and other industries.
In the Chao Phraya delta, the spearhead of the frontier had been the canal-digger’s hoe. In the uplands, it was the logger’s saw. Trees were felled for roads, dams, mines, US air bases, or just for the timber itself. Some of the large numbers of workers hired on these projects settled on their outskirts and cleared further areas for cultivation. Over a decade or so, many places went through three waves of settlement. First came the loggers, along with early settlers who practised shifting cultivation and then moved on, following the logging parties. Next came lowland farmers, sometimes commuting between their lowland paddy-farm and an upland plot, which could be worked in a different season. The third wave brought the landless poor, squeezed out of the valleys by population pressure. Often they were trucked in by a new breed of agrarian entrepreneurs who hired them tractors to plough the land, lent them money to plant the crop, and took away the produce. These entrepreneurs worked in turn for export agents, sugar mills, tobacco-curing yards, oil pressers, rubber packers, feedmills, and canneries which sprang up in boom towns throughout the uplands zone.
Borne along by these powerful forces, the frontier moved through the upland forests like a firestorm. In 40 years, Thailand’s cultivated area tripled. Almost all the additional area was in the uplands. About half was planted to rice and the rest to a wide range of cash crops. Sugar plantations again appeared on the raised areas around the rim of the Chao Phraya delta. Rubber trees and oil palms were planted on the slopes of the hills running down the peninsula. Pineapple fields nibbled into the western forests. Cattle ranches spread along the escarpment between the central plain and the Khorat Plateau. Tobacco fields appeared around the northern valleys.