Democracy in Thailand - response to comments

Posted on December 12, 2008 | Leo Horn | More on Asia, Development, News | 3 Comments

This is a response to some thoughtful reactions to my earlier post on democracy in Thailand, and to arguments made in last week’s Economist about the situation there.

My arguments are no vindication of the PAD, whose reckless actions I find condemnable and ultimately counter-productive and whose proposals (including the 70% vote) are misguided. My intention was to provide some background on the current political situation, background that I found lacking in my main news sources. And to challenge the simplistic notion that what we are seeing is a rejection of democracy by rich urban elites who feel threatened by a democratic government that cares for and represents the poor. There are many valid reasons why ordinary citizens from all walks of life united against an elected government: their primary motive was not to defeat democracy, rather to fight its abuses.

The portrayal of the current political crisis as a battle of rich urban elites versus a majority of poor rural folk united behind the popular Mr. Thaksin is inaccurate and unhelpful. Poor farmers in the north like Mr. Thaksin. Poor city-folk in Bangkok don’t. Poor Muslims in the south hate him. While Mr. Thaksin’s party gained the most seats in parliament, more people voted against him than voted for him. He doesn’t have the kind of broad-based popular mandate that many commentators credit him with.

Conversely the PAD are not a homogenous group. As last week’s Economist put it: “the PAD is a motley bunch, united only in its fanatical hatred of Mr. Thaksin”. It is Mr. Thaksin’s abuses of power that they are outraged about, not his policies to help the poor. People did not take to the streets in protest when Mr. Thaksin first announced and implemented his “populist” policies. Neither were there street protests when his crack-down on drugs led to extrajudicial killings of hundreds (thousands?) of supposed drug traffickers many in dubious circumstances. Neither did they take to the streets when he botched up the relative peace in the south. Thais have a high tolerance for politicians’ professional shortcomings.

But what many Thais could not stomach was Mr. Thaksin’s reckless bending of the system to suit his own personal needs. The straw that broke the camel’s back was when Thaksin used some cunning structures to avoid paying tax on the sale of Shin Corp to Temasek. He also had changed a law to aid in this sale. That was what brought people into the streets in protest, and led to the formation of the PAD.

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Democracy in Thailand

Posted on December 2, 2008 | Leo Horn | More on Asia, Conflict and security, Development, News | 3 Comments

With my wedding in Bangkok fast approaching, I have been watching the events unfolding there closely and with trepidation. I am dismayed at the blinkered and naïve reporting and commentary in the mainstream Western press about the situation in Thailand (I refer in particular to The FT, The Economist, The Washington Post etc). The political impasse is described in clichés, as a battle of virtuous rural masses versus power-possessive urban elites, of progressives and democrats versus royalists, militarists and other hideous elements of the ‘ancien regime’. I’ve no doubt that the current events signify a failure of democracy in Thailand. It is indeed that very failure that the protesters are decrying, with resort to ever more desperate tactics.

A recent blog by the FT’s Gideon Rachman – whose pieces I frequently enjoy reading – typifies the mainstream view, which is shallow and simplistic both in its account of the situation and in its interpretation of democracy (see article here). According to Mr. Rachman (who by the way likes clichés):

“The urban middle-classes are rising up and demanding that democracy be rescinded.
Do not be fooled by the fact that the group occupying the airport call themselves the “People’s Alliance for Democracy“. Their intent is clearly anti-democratic. They have just brought down an elected government.”

In this vein, the anti-government movement (known as the People’s Alliance for Democracy, or PAD) has been widely condemned on the basis that it unlawfully rejects a government that was voted in through the ballot and thus has prima facie democratic legitimacy. It seems to be a straightforward case of foul play on the part of the urban elites, who directly challenge the people’s choice. Or is it?

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The financial crisis is no excuse for backtracking on climate change, au contraire

Posted on October 16, 2008 | Leo Horn | More on Climate Change, Global economy | Comments Off

With a global recession looming, international efforts to curb greenhouse gas emissions may be in jeopardy, as concerns are voiced in the US, Canada and Europe about the wisdom of adopting measures that would impose an additional cost burden on already fragile economies. Such thinking is misguided, and it is dangerous. A recession may in fact ease the introduction of carbon emissions trading schemes.

At the recent EU summit in Brussels there was widespread reluctance to meet pledges all EU governments made last year to cut CO2 emissions by 20% by 2020. Eight Eastern European countries – including Poland, Hungary, Romania, Bulgaria, Slovakia, Latvia, Lithuania and Estonia — released a joint statement urging the EU to balance the wish for cleaner air against “the need for sustainable economic growth” at a time of “serious economic and financial uncertainties.” Italy threw its weight behind these countries, threatening to veto the proposed EU plans.

Likewise in the US, top power industry executives seized the opportunity to lobby for delaying carbon emissions legislation, at the recent New York Utility Conference. More dramatically in Canada, the Liberals were dealt an electoral defeat on Wednesday largely on the basis of their strong advocacy in favour of a carbon tax (see story here).

All this backtracking is akin to forfeiting the forest for the tree. Financial crises are short-term phenomena, global warming on the other hand is with us for the long haul, and the window of opportunity for addressing it is fast narrowing. The prospect of economic recession does not in any way reduce the magnitude or the urgency of the climate problem, nor does it provide any compelling reason for delaying action. Or as EU President Barroso put it:

“Saving the planet is not an after-dinner drink, a digestif that you take or leave. Climate change does not disappear because of the financial crisis.

Moreover, as David Wheeler of the Center for Global Development argues, smart carbon regulation will be easiest, not hardest, to introduce during a recession, since a slowing economy emits less, and smart cap-and-trade regulation can “lock in” this head start on emissions reduction at almost no cost during the recession. His proposal for the US is to:

• Immediately pass a cap-and-trade bill that sets the initial total limit at the pre-recession emissions level, and schedule a progressive decline in the overall limit that will achieve the needed long-run goal.
• Establish an annual auction for 100% of the emissions permits.
• Set aside a healthy share of the auction proceeds to provide a compensating rebate for every American

In this way the consumer is shielded from cost increases, and the power provider incentivised to develop less carbon-intensive energy options for the future.

It is amply clear that big emitting developing countries such as China and India will not make significant commitments to curb their greenhouse gas emissions unless the US and EU lead by example. With only about a year to go before the new global deal to replace the Kyoto Protocol is due to be reached in Copenhagen conference, the US and EU have no room to falter. More than ever, political courage and leadership is needed to ensure global efforts to address climate change are not jeopardized.

Developing countries are not shielded from the global financial crisis

Posted on October 12, 2008 | Leo Horn | More on Africa, Development, Global economy, Resilience | Leave a Comment

So far, many observers and experts point out, developing countries seem to be holding out quite well amidst the global financial turmoil. In reality the current global financial crisis poses multiple and profound risks to development, which I will briefly outline.

Finance ministers from 24 developing countries (the Group of 24, or ‘G-24’) meeting last Friday at the IMF, noted that:

“many emerging markets and developing economies are not immune to the spillovers of the ongoing global financial crisis”

and that:

“preventing macroeconomic volatility from financial spillovers and sustaining continuous growth were key priorities for developing countries”

See the G-24 public communiqué here.

There are several ways in which the global financial crisis can impact on development. Impacts will be highly country-specific. Key factors include:

  1. Cuts in international development aid – Jakaya Kikwete, President of Tanzania and Chairman of the African Union, expressed his ‘deep concern’ about the financial crisis dampening rich countries’ commitment to development aid (see news report here). And for good reason: development aid tends to be strongly pro-cyclical, in other words a nation’s generosity to other nations tends to be proportional to its own good fortunes.
  2. Reduced access to international financial capital markets - The impact will likely be bigger for middle-income countries and some emerging markets (excluding China, given it is a super high saver). Much of sub-Saharan Africa had limited access to international private capital to start with, and will therefore not be strongly affected by this.
  3. Possible reversals in capital inflows to developing countries - due to the global credit crunch and as investors’ appetite for risk abates.
  4. The spread of stock market turbulence to emerging markets – in one day last week, markets in Brazil, Mexico, South Africa and Turkey plunged 10%.
  5. Downturn in global demand for developing country exports.
  6. Postponement of large investment projects. There is emerging evidence that large investment plans (e.g. in India’s power sector) are being delayed or cancelled as turbulence in capital markets undermine prospects for raising funds.
  7. Remittances will be impacted by the economic downturn, as well as inflation and a weak dollar. See a recent news report on how remittances to the Caribbean are being hit.

It is of course unrealistic to expect that developing countries can be wholly insulated from the global financial crisis. However, the one very powerful instrument that rich countries do have at their disposal to help keep development on track is aid. A cutback in aid at this point can have severe impacts, as high food and oil prices justify increases in aid. Aid will be needed for countries with reduced sources of revenue and finance, as social expenditures are typically the first to get cut when fiscal resources tighten. Emergency support should be targeted to countries that are fiscally highly vulnerable (the IMF has identified 22 such countries).

More than China’s Milk is Tainted

Posted on September 30, 2008 | Leo Horn | More on Asia, Development, News | Comments Off

As a long-time resident of Beijing, concern about food and product-safety is almost a chronic neurosis. Over the past year alone, health scares have ranged from carcinogenic textiles and toothpastes, to the sale of rancid pork from dug up pig carcasses, to hormone and pesticide-laden fruits and veggies and most recently, melamine-laced milk.

This latest episode of the tainted milk has caused particular outrage because of the life-threatening impact on a large number of toddlers (53,000 affected on the latest count). What appeared at first to be a company-specific incident quickly spread to engulf the entire industry, implicating an ever wider web of co-conspirators including the very people whose job it was to police the corporate malefactors.

The story that is unfolding tells of unbridled greed, political wrangling and high-level cover-up. It has thrown up searching questions about China’s own brand of über-capitalism, characterised by weak regulatory oversight, compromised public institutions and entrenched collusion between businesses, the media and government officials in the brazen pursuit of profit.
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