A History Of Thailand

by Baker Chris

  Map 6: Modern Thailand.

  The urban boom

  Over the last quarter of the 20th century, Thailand experienced a rapid demographic transition. The birth rate dropped as a result of birth control campaigns, rising prosperity, and delayed child-bearing for education and careers. Annual population growth dropped from 3 per cent in the 1950s to 1 per cent in the 1990s. The bulge from the 1960s’ population spurt entered the workforce in the 1970s and 1980s.

  In this quarter-century, the urban economy grew faster than ever before on the foundations laid in the American period. The total size of the economy (GDP) increased fivefold and GDP per head tripled (Chart 2). Around a quarter of the working population moved out of agriculture. Bangkok grew from a city of 3 million to an urban sprawl housing over three times that number. In 1975, only two high-rise buildings poked above the shophouses. By the 1990s, a dreamer had planned to plant the world’s tallest building in Bangkok’s alluvial mud.

  Chart 2: Real GDP per head, 1951–2012.

  The urban boom started slowly. The political excitement of the 1973–76 era disrupted business. After October 1976, the prime minister, Thanin, hoped the return of firm rule would also mean the return of foreign investment: ‘I have a vision. It is of US dollars, Deutschmarks…all flying into Thailand, millions and millions of them’.1 In fact, the dollars flew out, following the departing US military. Many US firms feared that Thailand would fulfil the domino theory. Besides, the military that again dominated government had an anti-business streak. Military ideologists argued that Thailand’s unregulated and exploitative capitalism was responsible for provoking people to embrace communism (see next chapter).

  Though dollars flew out, yen began to fly in. Japanese investors had come to Thailand since the late 1960s. Over the 1980s, Japanese foreign investment exceeded that from the USA by almost three times. Much of the investment was made by Japanese trading companies in tariff-jumping ventures to assemble automobiles and household goods from imported components for domestic sale. Some investment went into labour-intensive manufacturing, especially textiles, for both the local market and export. By the early 1970s, many ‘modern’ goods in Bangkok stores had Japanese brand names, not American ones. A satirical poem began:

  First thing in morning,

  Grasp White Lion toothpaste and enjoy brushing teeth;

  Then make some tea with a National electric kettle

  And smooth down hair with Tanjo pomade.

  Put on Thaitorae Tetoron clothes,

  Wear a Seiko watch when leaving home,

  Listen to government news broadcasts on a Sanyo radio,

  Drive a Toyota to pick up girlfriend.2

  There was satire, but no protest. The students who had demonstrated against Japanese economic power in 1972 and again during the tour of the Japanese premier, Tanaka, in 1975 had been repressed. The Japanese government invested in cultural diplomacy. Most Japanese firms linked up with a joint venture partner chosen from among the big domestic conglomerates and let the partner manage local marketing, government contacts, and public relations.

  Japanese joint ventures further strengthened the leading Thai conglomerates. When democratic politics re-emerged in the late 1970s, leading businesspeople joined or supported parties, and pressed to influence policy. In 1980, Boonchu Rojanastian, formerly managing director of Bangkok Bank and now deputy prime minister overseeing economic policy, proposed that government and business cooperate to create ‘Thailand Inc.’, an allusion to a popular book on Japan’s success. Boonchu said: ‘We should run the country like a business firm’.3 This effort failed. But business leaders also lobbied for policies through associations of industry, commerce, and banking. In 1981, government agreed to form an official liaison committee between these bodies and the economic ministers. The business leaders used this route to lessen red tape and reduce the opportunities for bureaucratic restriction and gatekeeping. Business began reaching for political influence commensurate with its rising wealth.

  Boonchu’s scheme was for Thailand to follow Japan and the East Asian ‘Tiger’ economies in producing manufactured goods for export. From the mid-1970s, technocrats wrote the same strategy into the five-year plans. But as long as the old pattern of agricultural exports and limited protection of domestic manufacturing continued to deliver growth, vested interests were able to resist change. Even when the World Bank demanded ‘structural adjustment’ in the same direction in return for loans offered in the early 1980s, little of substance changed. Export manufacturing expanded, but very gradually.

  The shift came in the early 1980s. Thailand’s agricultural export growth faltered at the same time as US subsidies tailed away, and the second oil crisis of 1980–81 raised the cost of the country’s single largest import. The government reacted initially with measures that delayed the impact of the oil crisis, while promoting tourism and labour export to the booming Middle East to earn more foreign exchange. But it was not enough. In 1983–84, the economy slumped. Debtors stopped paying their bankers. One bank crashed, and another bank and several finance companies had to be bailed out. The Finance Ministry ran out of money to service Thailand’s foreign dues.

  Reform-minded technocrats and business supporters seized the opportunity to switch Thailand towards export-oriented manufacturing. In November 1984, the baht was devalued by 14.7 per cent. The army chief went on television to demand the devaluation be reversed, but the technocrats held out and thereby gained greater influence. Leading businesspeople supported a change of policy. The government began to revise tariffs, tax systems, and investment promotion to support export-oriented manufacturing.

  One external factor completed the change. In August 1985, the USA and Japan met to sort out the chaos in world currency markets after the oil crisis. Under the resulting Plaza Accords, Japan allowed the yen to rise against the dollar and dollar-linked currencies, such as the baht. Over the next four years, the value of baht in terms of yen halved and the value of Thailand’s exports to Japan tripled. Thailand lurched into the ‘Asian model’ of export manufacturing.

  The first to take advantage were local firms and established joint ventures. Banks and finance companies enthusiastically financed expansion. Exports increased by an average 24 per cent a year during 1984–89, led by garments, toys, bags, artificial flowers, and other labour-intensive products.

  This local boom was soon overtaken. Japanese firms had to ‘escape the rising yen!’ (a Japanese slogan from this period). So too did firms from Taiwan, Korea, and Hong Kong, whose currencies were carried up in the yen’s wake. From 1988, foreign investment accelerated as East Asian firms moved export-oriented manufacturing to Thailand and other low-cost sites in Southeast Asia. Some of these firms (especially Taiwanese) were in labour-intensive sectors, but increasing numbers used Thailand as part of complex multi-country systems for manufacturing technology-based goods, such as integrated circuits, computer parts, electrical goods, and automobiles. By the end of the 1980s, the computer-part maker Minebea had transferred 60 per cent of its world production into Thailand and become the country’s largest private employer. In 1991, the government deregulated the automotive industry, encouraging Japanese and later US firms to increase their investments. From 1990 onwards, these technology-based goods were the fastest-growing sector of exports. Between 1993 and 1996, a new Japanese factory opened in Thailand every three days.

  Tourism grew over the same era. The government first promoted tourism heavily as a counter to the early 1980s slump, and then continued as falling air-flight prices increased the potential market. Beach and island resorts were created for holiday-makers from the temperate north. Thailand’s religious aura attracted Asian visitors. The sex industry developed during the Vietnam war was repackaged for tourist demand. Annual arrivals grew from a few hundred thousand in the mid-1970s to 12 million at the turn of the millennium.

  Thailand had very quickly ceased to be a fundamentally agrarian economy. In the early 1980s, agriculture still supplied
almost half of exports. A decade later, the share was a little over a tenth.

  Dragon days

  The boom made urban Thailand – and especially Bangkok – a more dominant element in the economy, society, and culture. It converted businesspeople into a wealthier, more socially confident, and more politically influential elite. It brought a new confidence and pride in the Chinese social origins now shared across business, bureaucracy, and the professions.

  Much of the profits of the boom went to the old conglomerates, which continued to diversify into new business opportunities. But financial liberalization and the sheer pace of the boom allowed others to participate. Several of the new entrepreneurs began from the provinces. The most successful of the era, Thaksin Shinawatra, came from an established business family in Chiang Mai. Thaksin rose rapidly by gaining government concessions for the new sector of telecommunications (mobile phones, satellite), and by exploiting the rising stockmarket. In five years from the late 1980s, his net worth rose to over US$2 billion. Other new families prospered in telecommunications, property, retailing, and other sectors geared to the booming home market.

  The boost in the income and the economic importance of the big-business community resulted in new social and political confidence. With almost no new immigration since 1949, virtually all Thai–Chinese families had entered a third or higher generation. The children of the leading families had taken privileged routes through the education system alongside the children of the old elite. From the 1960s, intermarriages between the great business families and more established clans became more acceptable. In the prospering 1990s, they were frequent. A son of the Chirathiwat retailing family (Central) married a royal relative. The son and heir of the Sophonpanich banking family married into one of the great bureaucratic households. Prominent figures from old aristocratic families decorated the boards of large corporations. A new business press and glossy magazines glamorized corporate success. Biographies of the founders of the conglomerates were written to celebrate their success and to inspire emulation.

  Business families, both large and small, put more of their children (especially, but not only, the males) through higher education and into the bureaucracy and professions. Many recruited into the growing technocracy came from these origins. Puey Ungphakon was a pioneer example. Son of an immigrant fish wholesaler, he won scholarships to study in England and soared up the technocratic ladder to become Governor of the Bank of Thailand in 1959 at the age of 43. He founded Bank of Thailand scholarships, which enabled others to follow his path. Many children of wealthy families were schooled in the USA and returned to take leading roles in the technocracy, universities, and professions. The old division between Thai officialdom and Chinese business became blurred.

  As urban enterprise became the driving force of the economy, intellectuals of Chinese origin demanded recognition of the Chinese role in the history, which the earlier nationalists (such as Wichit Wathakan) had tried to define as exclusively ‘Thai’. In 1986, the historian Nidhi Eoseewong began a study of King Taksin by discussing jek, the pejorative word for Chinese or lukjin, and arguing that jek was part of the diversity that was the strength of Thai culture. Nidhi and Charnvit Kasetsiri showed that the founders of both the Ayutthaya and Bangkok dynasties probably had some Chinese ancestry, signifying the long and important Chinese role in Siamese history. Nidhi described the very large role of the Chinese in the trading economy and ‘bourgeois’ society of early Bangkok to emphasize how much the Thai nationalist historians had painted out. The poet and essayist Sujit Wongthet described himself in a 1987 book as Jek pon Lao, Chinese mixed with Lao, suggesting such mixing was typical of the true ‘Thai’ ancestry.

  China’s reopening to the world in the 1980s, and its emergence as an economic power in the 1990s, further legitimized pride in Chinese origins. Families travelled back to visit their birthplace and resume links with relatives. The CP conglomerate became one of the largest foreign investors in China’s opening economy, and several other Thai–Chinese firms followed the example. Learning a Chinese language became popular for reasons of both ethnic pride and practical business. The Chamber of Commerce published a bilingual journal to promote Mandarin language skill. In the mid-1980s, the government lifted a ban on electoral candidates making appeals based on Chinese origins, following which many urban candidates boasted of their clan (sae) name and their place of origin. Chitra Konuntakiat became a media personality and best-selling author by explaining Chinese customs, ceremonies, and culture to those whose families had lost the memory over the past generations. Family histories of some of the great business families became bestsellers. The cover of a 2001 compilation entitled Legendary Lives of the Jao Sua displayed a golden dragon on a red background, with the subtitle, ‘from one pillow and one mat to the biggest businesses of Thailand’.4

  At the height of the economic boom, this reclamation of origins spread to mass culture. A 1994 television drama series, Lot Lai Mangkon (Through the Pattern of the Dragon), traced the rise of a Chinatown street smart to the head of a great conglomerate – a pastiche of several real dynastic histories. A huge audience watched it and pundits analysed its significance. Political scientist Kasian Tejapira exclaimed: ‘What a “bourgeois revolution” in Thai entertainment culture!’5 A string of later television dramas dwelt on other parts of the migrants’ story, from the initial migration to the delicate topic of links with relatives in China. From Lot Lai Mangkon, the term ‘dragon’ was adopted as shorthand for Chinese entrepreneurial success, and its title song became an unofficial anthem:

  From the Chinese land overseas

  On a small boat drifting afar,

  Penniless like a beggar…

  Fights the battles of the business world…

  Through the days and nights of struggling…

  Dragon begins to spread its wings,

  Pays back what it owes to this land.

  In 1996, a singer who emphasized his Chineseness by dressing in pyjamas, sporting a pigtail, and calling himself Joey Boy was hugely successful with a rap song, ‘Ka ki nang’ (No Stranger). In the late 1990s, looks that would earlier have been called ‘too Chinese’ became the fashion for actors, singers, and even the winner of the Miss Thailand World contest. In a deconstruction of Thai identity unimaginable only a few years earlier, a leading businessman described his origins as ‘100 per cent Cantonese born in Thailand’.6

  In the Phibun era, the government set out to ‘assimilate’ the immigrant Chinese into the ‘Thai’ nation. In a sense, the project was very successful. The Chinese learnt the Thai language, adopted new forms of behaviour, and identified themselves as citizens of the Thai nation. But at the same time they helped to mould a new urban culture that included speech, taste, and aesthetics from their own heritage. They also separated ‘Thai’ as a nationality from the old effort to conflate nationality, ethnic origins, and culture.

  Making a middle class

  The tertiary education system had been designed to staff the expanding bureaucracy. In the 1960s, David Wilson noted – with some exaggeration – that the only educated Thai outside the ranks of officialdom were a few journalists, condemned to this trade because they failed the exams. With US patronage and encouragement, tertiary education began to expand. The first provincial universities appeared in the 1960s, the open Ramkhamhaeng University in the capital in the 1970s, and a swathe of new private and public colleges from the mid-1980s onwards. In the three decades following 1970, the numbers with tertiary education expanded 20 times up to 3.4 million. Most became not officials – the expansion of bureaucratic jobs slowed in the 1980s – but professionals, technicians, executives, and managers in the commercial economy.

  Commercial salaries were much higher than official scales and accelerated from the mid-1980s as the economy boomed. One prime use of this new wealth was to migrate away from the shophouse homes in the old city centre to new suburban ‘villages’. In the late 1980s, this migration sparked a property boom in the paddyfields
, swamps, and orchards on the city outskirts. This was a shift not only of location but also of culture – away from the tight inner-city neighbourhood to detached homes, and often away from an extended family to a nuclear one. The ads for the new housing projects played constantly on the theme of a ‘new life’ in the new location.

  Consumption patterns shifted to models influenced by the west and Japan. The American period had allowed a glimpse of western lifestyles in Bangkok. Large numbers of Thai had travelled abroad for education. Reductions in tariffs as part of the economic liberalization in 1984, and more emphatically in 1991–92, cheapened the cost of imported goods. Western films increased in popularity. Satellites beamed in international news and cable television. Retailing changed to meet the new demand. The department stores that had become popular in the American era were superseded by palatial retail complexes, which glamorized the act of purchase.

  Gender patterns in this new middle class were complex. As among the mass of working families, the women in the new white-collar working class went to work. In the expansion of tertiary education from the 1960s, female participation initially lagged slightly behind men, but then overtook it. By the 1990s, a majority of university graduates were women. In the total labour force, numbers of male and female graduates were roughly equal. Business families often channelled their daughters into learning useful technical skills (accountancy, business administration) and let them study longer, while their brothers were taken more quickly into the family business. As a result, by the 1990s, women outnumbered men in professional and technical careers. In many new business sectors, such as finance, they had a dominant role. By the late 1990s, all the deputy governors of the central bank were female, and in 2006 Tarisa Watanagase became the first female governor. Among the big Thai–Chinese business families, some women rose to prominence from a background as property owners and others simply by outshining their male siblings, creating a number of new female business role models, including Chanat Piyaoui of Dusit hotels and Supalak Omphut of the Mall group.