Don’t cry for me, Shinawatra
One of
the various justifications put forward by the Bangkok elite and its military
spearhead for ousting elected, Thaksin-aligned governments is that they are
saving Thailand from a fate similar to Argentina, as quoted on June 30 in an
Asia Sentinel story.
There
are few parallels. Nonetheless, they see former Premier Thaksin Shinawatra, who
was ousted in a 2006 cop, as a reincarnation of populist Juan Peron whom they
claim was largely responsible for making Argentina, once as rich as Australia,
into a middle income basket case with a long history of debt default.
That
is, to be polite, a simplistic view of Peron’s role. But the one thing that
does unite the Thai elite to its former conservative counterpart in Argentina
was a contempt for the lower income groups, dismissed as descamisados
(shirtless) and worse and unfit to have any influence in deciding their
country’s government.
Peron
was a military man himself who came to prominence as Minister of Labor during
military rule in the 1940s. It was then that he introduced a minimum wage,
encouraged unionization and tried to promote mass health care. This saw him
popularly elected as
president
in 1946 and again in 1952 before he was overthrown in a military coup which
sent him into exile until a very brief return to power in 1973 whereupon he
died of cancer the following year.
The
military soon returned in even more brutal form – the regime of General Jorge
Rafael Videla with mass extrajudicial killings of alleged leftists, followed by
successor generals Viola and Galtieri which lasted until their failed attempt
to seize the Falkland /Malvina Islands from Britain in 1982.
Peron’s
legacy lives on in a country deeply divided not by religion or ethnicity but by
class – again a parallel with Thailand.
Argentina
had a period of rapid, investment-led growth under Peron before falling into
debt problems partly caused by overinvestment and a sharp fall in its terms of
trade. Peron’s mistake was not to make an effort to reduce inequalities among
Argentinians but to pursue a nationalist policy, nationalizing foreign owned
companies, annoying the US, and building an industrial base behind tariff
walls.
But
these policies of self-sufficiency have their origin in the 1930s Great
Depression and Argentina’s lack of trade access during World War II. They have
been a feature of Argentina for decades and at one time were favored by such
institutions as the UN Conference on Trade and Development. They were part of a
“third world” non-aligned agenda which was globally popular (if unsuccessful)
in the 70s and 80s.
Attempts
at self-sufficiency and antipathy to foreign capital, following more of the
Mussolini or Franco formulas for development, was the damage that Peron, and
his successors, did to Argentina – not his espousal of wages and welfare for
workers. There is absolutely no parallel between Peron and Thaksin, himself an
accomplished capitalist, on issues of open markets, trade and capital flows.
Indeed,
in the Thai context it has been predecessors like Phibul Songhram [1938-1957]
and Sarit Thanarat [1958-1963] who have come closest to the nationalist model
promoted by Peron.
But
more important than Argentina’s economic policy lurches and failure of the last
six decades stands the political system. Here lies the explanation for why
Argentina, which 100 years ago was at the same rich level as Australia, also a
large land newly populated by hard-working immigrants from Europe. Argentina
was born in revolution against Spain and has been in a state of semi-revolution
ever since, with a multiplicity of coups punctuated by populist democratic
politics and lurches to brief periods of extremely liberal economics, as under
Economics minister Domingo Cavallo, 1991-2001, in when the currency was pegged
to the US dollar.
Unfortunately
for Argentina, there were little in the way of liberal or democratic
institutions to be inherited from the colonizer, Spain. There was none of the
gradual transition from colony to independent state, none of the inherited
institutions of government which Australia acquired from Britain, none of the
emotional as well as economic ties which linked Australia to Britain and later
to the US – and tempered nationalism.
Argentina’s
nationalism was raw, its friends few and far away – Chile an enemy, Brazil a
rival, Spain too preoccupied with its own internal fights. Australia developed
institutions for dispersing power among elected bodies, of an independent
bureaucracy, of a civilian military which served with honor in two world wars,
democracy which was founded on the need to serve the “common man” to find an
egalitarian path better than that in old, aristocratic Europe. Politics was
about compromises, not winner take all, the spoils of office seldom measured in
pecuniary terms.
Argentina
was at the opposite pole, a nation of great landed estates and dire poverty, of
state power which rewarded the politically-connected, not the entrepreneur.
Both were highly unionized nations but Australia had institutions that could
achieve compromise. Australia could be equally protectionist – as it was in the
1960s and 1970s – but this was more pragmatic than ideological and could be and
was easily discarded.
For
sure there is no reason to expect the Thai junta to engage in self-defeating
economic nationalism given how well embedded Thailand is in the global
manufacturing system and with Japan in particular.
And
there is good reason to believe it will try to follow some of Thaksin’s
populist policies. They hate the man more than his policies. However, the
underlying politics of Thailand continues to look like Argentina not Australia.
The problem is not the threat Peronism but Bangkok’s lack of the institutions and
attitudes which make for stable government and democratic compromise. If
Thaksin is Peron, Prayuth is Videla.
Philip
Bowring
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated
in Singapore since 1994.
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