Asian Economic 'Tiger' May Fix Political Stripes

July's currency crisis forces Thailand to rethink how it is governed. Parliament to vote next month on constitution.

Khun Thana surveys Thailand's political landscape from behind the wheel of a Bangkok taxi. Trapped for hours in this city's infamous traffic snarls, he has plenty of time to consider the future.

"If we vote in a new prime minister, there is a chance he'll be less corrupt than the present one," he muses. "But there's no chance of him being completely clean. There's no such thing as an uncorrupt politician."

Political corruption is a fact of life here. At election time, Thai politicians routinely spend millions of dollars buying votes from a poorly educated rural electorate. An official election-monitoring body reported that politicians spent more than $1.1 billion competing for 393 seats in Thailand's last election.

Comprising fractious coalitions, starved of ideals, and wracked by in-fighting, most governments don't last long. Thailand has voted in three different coalitions in the past three years. Current Prime Minister Chavalit Yongchaiyudh came to power last November but analysts here are predicting he may not finish the year.

To many, Thailand's political system mirrors the values that drove its economic boom. Massive speculation and gung-ho entrepreneurism were the pillars of that success. "What we have is a commercial democracy," explains Mechai Viravaidya, a former deputy prime minister. "We have simply applied capitalism to everything."

While Thailand was on an economic roll over the past decade, the marriage between politics and business didn't seem to matter.

Taxi drivers, like Mr. Thana, moaned about the traffic jams caused by Thailand's consumer boom, and tutted half-heartedly at the excesses of Thailand's politicians. But almost everyone agreed that the country was on the road to modernity.

Today, they're not so sure. A dramatic financial meltdown has seen Thailand's currency, the baht, fall in value by more than 20 percent. Thailand has gone from being a model of success to a warning beacon for aspiring Asian "tigers" elsewhere in Southeast Asia. Incomplete housing projects and skyscrapers now dot Bangkok's landscape.

To limit the damage and set Thailand back on course, the International Monetary Fund has put together a $16-billion recovery plan. But the loan comes with a set of conditions that will spell increased hardship for the vast majority of Thais over the next two to three years.

A weak baht has pushed up the cost of imported goods, traditionally a favorite among Thai shoppers, while the IMF has already increased consumer taxes from 7 percent to 10 percent. To try to purge a system laden with bad debt the government has also announced the closure of 58 of Thailand's 91 finance companies.

As Thais begin to feel the crunch from the economic crisis, many blame politicians for their woes. Renowned for their easy smiles and tolerant nature, there are signs of increased tension in the capital, Bangkok. "The people are definitely upset," says Boontham Werawongse, deputy secretary-general of the Campaign for Popular Democracy, a grass-roots alliance here.

The joker in Thailand's political equation is a new draft constitution, Thailand's 16th since the country abandoned absolute monarchy in 1932. It includes moves to place checks on corruption among political leaders and institute direct elections for local administrative councils.

"We are really looking forward to the new constitution," adds Mr. Boontham.

But reform doesn't wash easily with Thailand's established elite, a number of whom have already voiced their intention to reject the constitution when it's put to vote in parliament next month. "If the charter does not clear parliament I would like it to be viewed as a normal occurrence," commented Bokhin Polakula, leader of the New Aspiration Party, which forms the core of the ruling coalition.

That's unlikely though. Observers here fear that a defeat of the new constitution would put the government and public on collision course.

"The present system has lost its credibility," warns Anand Panyarachun, a former prime minister who chairs the Drafting Committee for the new constitution.

With memories of bloody pro-democracy riots in 1992 still fresh in many people's minds, there is deep concern that planned demonstrations in support of the constitution could escalate into more serious confrontations, further threatening Thailand's stability and increasing pressure on the country's beleaguered economy.

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