IGNORING warnings that foreign firms might pull out, on January 9th Thailand's military-backed government announced tighter restrictions on foreign ownership of local companies. The stockmarket, battered by December's botched curbs on currency inflows, a spate of bombs in Bangkok and rumours of power struggles in the army, fell further. So the government backtracked on some of the changes, further denting its credibility.
The government's espousal of a “sufficiency economy” theory, developed by King Bhumibol, further fuelled suspicions that it plans a partial retreat from Thailand's hitherto liberal economic stance. No, insisted the prime minister, General Surayud Chulanont, the sufficiency economy “does not by any means imply a rejection of globalisation”. So what does it mean? The general was launching a report on Thailand by the United Nations Development Programme (UNDP), which promised to answer that very question. It explains that the sufficiency theory is for sustainability, moderation and broad-based development; and against excessive risk-taking, inequality and other evils.
The king developed his theory during the 1997 Asian economic crisis, when the consequences of years of reckless growth caught up with Thailand. But Thailand's finances are now much more solid and great progress has been made in bringing health care and education to the rural poor—as the royal theory proposes. Like so many generals, the leaders of last September's coup seem to be fighting the last war.
Judged by the sufficiency theory's own tenets, the five-year government of Thaksin Shinawatra, the deposed prime minister, was wondrous. His “30-baht health plan”, offering treatments for less than a dollar, helped cut poverty sharply. Yet his government ran a surplus most years (the new one plans a deficit), cut public debt and built big currency reserves. There were extensive programmes to help rural villagers find new sources of income.
However, the UNDP report goes out of its way not to mention the Thaksin government or its policies. There is no discussion of how the new “sufficiency” policies will differ from Mr Thaksin's—just an uncritical lauding of the new government's five-year plan as “the biggest shift in Thailand's economic orientation in over two decades” and much praise for royal projects.
The sufficiency theory talks of “immunising” the national economy against shocks. So far, the military government only seems to be creating shocks. As a result, growth is set to slow, and with it Thailand's progress in cutting poverty. Neither the UNDP's report, nor the many speeches launching it, discussed such awkward truths. The generals, having struggled to pin charges on Mr Thaksin, now want to airbrush him from public consciousness, to thwart any comeback. This week they told Thai broadcasters to stop quoting him.
The autocratic businessman-turned-politician was careful to attach a personal brand to his popular policies. Many are now having the label removed: the 30-baht treatment fee is being dropped, so cheap or free health care can no longer be called by a name linked to Mr Thaksin. Overall, the generals want to overwrite his brand with the only stronger one in Thailand: the monarchy.
Perhaps it makes sense for the new government to obscure its predecessor's achievements while stealing its best clothes. The question is why the UNDP thinks it should provide cover for this whitewash by puffing the sufficiency economy as a miracle-cure for the developing world's woes. The answer is that the UNDP is a sucker for this sort of new-age waffle, especially if it has royal patronage. It has also lauded the not entirely dissimilar “Gross National Happiness” theory of Bhutan's King Jigme Singye Wangchuk.
In publishing such an unbalanced report on a theory that is untried on a national level, the UNDP has abandoned all sense of objectivity. It is also lending legitimacy to a regime that took power by force. Hakan Bjorkman, the UNDP's deputy chief in Thailand, says it wanted to provoke a debate. But no such debate is possible in Thailand, because sufficiency theory is the king's philosophy and anything remotely critical of it could be seen as lèse-majesté, punishable with jail.
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