Article

Thailand’s Economic and Social Development in the Modern Period: from Open Door Policy to Good Governance Arpharatsami Namanee*

The Institute of East Asian Studies, Thammasat University, Klong Luang, Pathum Thani, 12120, .

Abstract Background: There are the distinct factors affected the economic and social development in Thailand in each period. The study of the historical background of the economic and social development in Thailand is important for understanding its evolution. Furthermore, it provides the data and lesson learned for the present and the future. Objective: The objectives of this study are to explain and demonstrate the economic and social development in Thailand from the King Rama IV period of reign that Thailand has opened the door for Capitalism to the present period.

Results: The signif icant results elucidate the Thai economic and social development in the modern period is effective in some aspects such as the GDP growth, the Thai people’s quality of life, the public health care. In the other hand, there are many problems remain come together with the development process such as the illiterate democracy, the environment and natural resources have been depleted and the environment degraded, the increasing of the income gaps etc. Discussion and Conclusions: the sustainable development is necessary so we have to studies to propose the effective strategies for the economic and social development in Thailand. The rational choice development approach will be employed in the future.

Keyword: Economic and Social Development, Good Governance, Public Policy

Historical Background long under Burmese power. Even in 1767 The Ayuthian period of Siam, the name Phya Taksin and his followers were regaining of Thailand used before 1939’s history came control of parts of Siam, and by 1771 Phya to the end in 1767 (b.e.2310) when Autthaya, Taksin controllnearly all of Siam of the Ayuthian the capital city, was captured and sacked by period. He was the later crowed king. For the Burmese armies. But Siam did not remain several years he ruled wisely, but then began

* Corresponding author: [email protected] The International Journal of East Asian Studies

to show signs of madness, and in 1782 was were expanded. As the results, the population executed. His successor was the founder of and urban societies were spread. Unavoid- the present . The Siam kings of ably, the great powers in Europe colonized the Chakri dynasty are given the title of “Rama” and sought the resources and the markets for (Ingram, C.J., 1997) releasing their commodities in many parts of Since the mid-1850s, in King Rama IV the world. Necessarily, Siam started to open or King ’s period of reign (1851-1868), the door for Western diplomats, traders, culture, the most dramatic trend of Siam’s economic globalization and capitalism. The modern period and social development has been the trans- of the ’s economic and social formation to the modern period. The f irst three development is as follows: kings of the new dynasty had little to do with Western nations, although toward the end of Open the Door Period 1851-1867 (B.E. the third reign it became apparent that the 2394-2410) traditional isolation from the West could not long Since the beginning of the period of be maintained. There were Western missionar- King Rama IV or King Mongkut who was ready ies and a few traders in Siam during the f irst to accept globalization and capitalism, when three reigns. , but the principle off icial Western British approach Burma and France desired to contacts were made though the missions of occupy Indo-China region for opening the door (1821), Captain Henry Burney to Yunnan and Tibet. On April 18, 1855, Sir (1825), and Sir John Brooke (1850) for Great , the envoy extraordinary of Great Britain, and Roberts Mission (1833) from the Britain respectfully engaged the royal message United Stated. Burney and Roberts succeeded from , the monarch of Great in negotiating treaties but they were very limited Britain to Siam and King Mongkut unavoidably ones. (Ingram, C.J., 1997) The studies begin accepted change made the task of Sir John with the reign of King Rama IV or King Mong- Bowring. (Pensri Duke, 1984). kut when he became the king in 1851, he had is the friendship, trade learned several foreign languages and much and marine treaty between Great Britain and of Western history and science and he is the Siam but known as the “Bowring Treaty” was king who employed Mrs. the Siam’s socio-economic “open door policy”. to teach his children. While the great powers The results of Bowring Treaty brought the in Europe had scientif ifc and industrial revolution changing of Siam’s monopoly-trade system from the 1750s to the 1850s it began with to free-trade system thus Siam revoked the industrial revolution in Great Britain. It is the traditional tax to the international tax system. consequence of the Steam engine inven- Over the year, the international tax system tion by Thomas Newcomen in 1712 (www. attracted many traders from many countries and encyclopedia.com, 2012) and was developed the Siam-traders were also increased. by James Watt in 1765. (www.egr.msu.edu, Furthermore, Bowring Treaty encour- 2012) Afterwards, many industries in Europe aged Siam’s modernization with exposure the

2 Thailand’s Economic and Social Development in the Modern Period: from Open Door Policy to Good Governance Arpharatsami Namanee

Western civilization. Beside this, Siam must powers although lost 7 territories to Great change the tradition law system enforced over Britain and France from the year 1867 to 1909 200 years to international law system. On the (b.e.2410-2452). Because of the two great other hand, there were the negative impacts of powers had the strong royal armies, Siam this treaty such as Siam had lost extra territorial necessarily had implemented the defensive- right to Great Britain. Thereafter, King Mongkut foreign policy. As a results, Siam had lost had signed the treaties with many countries 518,700 square kilometers of territory. It is such as France (1856), The United State noticeable that the most territories Siam had (1856), Japan and other European countries. lost were used to be the Siam’s colonies which (Pensri Duke, 1984). Great Britain had opened were not settled the border until 1907. (Pensri the Siam’s market, Siam became Great Britain’s Duke, 1984). partnership in capitalism system. “Bowring Firstly, Siam lost Outer Khmer to France Treaty” was the f irst constraint which increased in 1867 (b.e.2410) in King Mongkut’s period Siam’s trade and the second constraint was the of reign after French had occupied Saigon geography. According to Chao Phya River as and southern Vietnam. Secondly, Siam lost the appropriate route for the trade-boat more Sipsongjuthai in Lao to France, after French than Mekong River, so Siam became wealthier already had occupied Khmer with the allegation than other countries in Indo-China. The begin- “Haw’s aggression” so France sent its Royal ning of the capitalism in Siam f irstly caused army into Sipsongjuthai and eliminated the by the Western colonialism and then devel- Siam’s Royal army from this territory in 1888 oped together with the bureaucratic capitalists (b.e.2431) in King ’s period of and the Chinese capitalists. Moreover, the reign. (Pensri Duke,1984). Thirdly, Siam lost worker class arisen in this era to serve many “the west land of Siam” to Great Britain in 1892 companies. (b.e.2435) because this land was abundant of the valuable forest. The worst crisis came The Struggle in the Colonialism Period in 1893 (b.e.2436), when French gunboat 1867-1910 (B.E. 2410-2453) “Le Lutin” forced their way up the Chao Phya Most of changes were set in motion River and French troops occupied Chandaburi through the leadership of King Rama IV and in the East because French desired to occupied his son, King Rama V or King Chulalongkorn. almost the land in the left of the Mekong River. A distinctive feature of the period cover by Siam could not resist the great power so King these two important reigns especially in King Chulalongkorn signed the treaty with French Chulalongkorn’s period of reign (1868-1910) on October 3, 1893 (b.e.2436). The results of when Siam encountered with the two great this treaties caused the loosing of the most powers, Great Britain and France. They important territories namely The Kingdom of desired to occupy Khmer, Lao and the land of Lao and Sipsongjuthai approximately 143,800 northern- Malay Peninsula. The kings of Siam square kilometers and the citizen around endeavored to protect Siam from the two great 600,000 persons. In the next decade, Siam lost

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the territories for two times to France; There 3) Siam’s economics system was reformed; were the land in the right of the Mekong River King Chulalongkorn modernized the f iscal, (Manoplai, Champasak and Loungprabang) in the banking and the infrastructure system. 1903 (b.e.2446). Moreover, in 1906 (b.e.2449) (Likhit Dhiravegin, 2003) The many aspects Siam lost the inner Khmer that wealthy of of the reform in King Chulalongkorn’s period agriculture and f ishery to France. Lately, in of reign brought Siam more modern than 1908 (b.e.2451) Siam lost Atriburi, Kelantan, it used to be. Obviously, the king’s duties Terengganu and Pales approximately 15,000 benef itted to Siam into the social structure. square miles of territory to Great Britain. (Pensri The Siam-people have more freedom, more Duke, 1984). justice, the education and can carrying on However, the most of Siam’s territories their satisfactory occupations. These factors lost in this period were Siam’s occupies, most gradually brought Siam more modern-state. of them were the land outer Siam. Unlike the Western occupy, the Eastern occupy is loose The World War I Period 1914-1918 that the great power only take the royal tribute (B.E.2457-2461) and loyalty from its colony. Whereas the West- The World War I was the world-level ern occupy extremely magnetize the power confl ict, began from 1914 to 1918 in European and the resources from its colony. Thus, Siam countries. When the industrial revolution was might not take the most power, resources and done in the great powers in Europe such as benef its from its colonies and after Siam lost its Great Britain, France, Russia, Italy and etc. territories caused the lost of little benef it in these From the 1750s to the 1850s, the results of lands. The Threat from the Western Colonialism caused King Chulalongkorn accepted change the industrial revolution caused the surplus and reform are as follows: of industrial-production, the increasing of the population and the urbanization. So the great 1) King Chulalongkorn built the nation-state powers in Europe need to expand their power with settling the Siam’s apparent territory, and occupies for absorbing the resources appending the northern cities and the south- (as raw materials for the industries) and ern cities, centralization of power, reforming releasing their industrial products. Then, in the the government, the government reorgani- 1900 century, every great power in Europe zation and the justice system including the impressively proclaimed superiority and also police and the military affair. compete each other. This situation caused the 2) Siam society had reformed as the modern lost of balance of power in Europe and led to society in many aspects; the slave and the war. It began with the separated of two serf system were repealed, the education exist namely, the Triple Entent, consisted of was reformed with the utilizing of the west- France, Russian Empire, Great Britain Empire, ern system, the standard language was Kingdom of Italy including the United State declared, the public health care and the and its alliances. For the opposite axis namely religion also were reformed. Triple Alliance, consisted of Austria-Hungary,

4 Thailand’s Economic and Social Development in the Modern Period: from Open Door Policy to Good Governance Arpharatsami Namanee

Germany Empire, Ottoman Empire and King- The World War II Period 1939-1945 dom of Balgaria. And in the end, the Triple (B.E.2482-2488) Entent was the total victory. The World War II or the Second World In this period, Siam was in King Rama War began in 1939 and ended in 1945, when VI or King Vajiravuhd’s period of reign. In the the lost nations in the First World War did not f irst stage of the war, Siam announced as the satisfy the results of the Treaty of Versailles neutral-nation but in April 1917 (b.e.2460), especially Germany that must pay off the war the United State joint with the Triple Entent reparation and lost the territory. Then, in 1966 and this axis tended to be the victory. Siam’s (b.e.2476) Adolf Hitler took the position of government took a decision to be the Triple Germany’s leader. His outstanding policy was Entent’s alliance and to declare war with the to give up the Treaty of Versailles and more- fear that the Triple Entent might not satisfy if over, he started to accumulate the arms and Siam still neutral. Moreover, Siam’s government empower the Germany’s army. It began with expected to give up the unfair treaties which the separated of two exists namely, the Allies draw in the colonial period. However, the battle (Great Britain, France and Soviet Union) and was not occurred in Siam, in the end of the the Axis (Germany, Italy and Japan). It was the war, Siam’s representative went to the summit widespread war in history, with more than 100 meeting in Versailles to negotiate about the million people serving in military units. The war unfair treaties. Unfortunately, this attempt was ended with the total victory of the Allies over not succeed in that time, it will have been done the Axis in 1945. The World War II altered in 1925 (b.e.2468) (Weerachai Chokmukda, the political alignment and social structure 2011) of the world. Siam’s government decided to In 1914 (b.e.2457) the rice demand in join with the liberal nations led by the United the world distinctly increased although after the State. Siam was in King Rama VIII or King end of the war. Siam could export much rice Ananda-Mahidon’s period of reign and Marshal with the good price because of the war. The Pibulsonggramas as the Prime Minister. On rice demand in the world distinctly increased October 3, 1939 (b.e.2482) the country’s name although after the end of the war. In 1919 was changed from Siam to Thailand. In early (b.e.2462) the unusual drought caused the crop of the war Thailand decided to be neutral but decreased to 67 percent. Consequently, the when Japan’s royal army reached Thailand’s nation’s income decreased, in 1920 Siam was middle and southern–provinces. Thailand could worse off for 81 million bath and the interna- not resist the Japan’s royal army, so Marshal tional reserves was left 50 percent. It had the Pibulsonggram agreed to be Japan’s alliance. f inance problem. And the world economy was While there was another movement in the also encountered with the economic downturn. United State namely “Free Thai Movement” (Chattip Natsupa and Suthi Prasatset, 1984) led by Mom Rajawongse Seni Pramoj who So in this period Siam could not have more did not accept the Thailand’s government economic and social development. decision. This group moved to resist Japan

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secretly. In 1945 (b.e.2488) when Japan lost and Social Development Council, Fiscal Policy in the war, Marshal Pibulsonggram resigned Off icer and etc. (Somjai Phagaphasvivat, 2004) and Mr.Khuang A-Pai Wong became the Prime Minister. Mr.Khuang A-Pai Wong declared The National Economic and Social “Peace Announcement” to Great Britain but Development Plan Period (1961-pressent) (B.E. Great Britain did not accept caused Mr.Khuang 2504- Present) A-Pai Wong resigned. After that, Mom Raja- Thailand’s government started to use wongse Seni Pramoj bacame the Prime Minister the National Economic and Social Development and had negotiated with Great Britain success- Plan in 1961 and now Thailand has 11 Social fully. (Weerachai Chokmukda, 2011) And In and Economic Development Plans. Each plan 1946 King Bhumibol Adulyadej became Rama has the specif ically objectives. The details are IX, who is the present king of the Thai Kingdom. as follow: The results of the war caused the great The 1st Plan (1961-1966): The 1st plan powers’ occupies independence. Owning to f irmly intent to develop the infrastructures the European Nation’s decline, The Soviet which support the economic development. So Union and the United States emerged as rival that the transportation, the rural highways, the superpowers, setting the stage for the Cold dams, the electric city were develop in that time. War for 45 years after the World War II. When Naturally, the 1stplan encouraged Thailand’s the United State established the NATO and economic growing. It is reported that the GDP The Soviet Union established the Warsaw grew 8 percent/year (The section of Study and Pact. It is the obviously separated of the Development Publication, National Social and superpowers’political ideology. In the Cold War economic Development Committee Depart- period, the world situation was effected the ment, 1988) Thailand’s economic and social development. The 2nd Plan (1967-1971): Like the 1st In 1947, the United State granted plan, this plan emphasized the economic and 3 million US Dollar to the Thai government infrastructure development. Beside this, the to battle the Communism in Indo-China and Thailand’s Government extent the aim of the expand the American’s Capitalism in Thailand. development to rural area so the rural develop- (Sombhop Manarangsan, editor, 1981) ment and many projects for supporting farmers Thailand in October 1958 (b.e.2501), were applied. This plan caused the economic Field Marshal Sarit Thanarat made coupd’etat grow around 7.5 percent/year lower than that Prime Minister Marshal Pibulsonggram and in the 1st plan because of the unstable global took the position as Prime Minister. He started economic. And this plan also increased the to modernize the Thailand’s economic develop- different of Thailand’s income gaps. The ment based on the basic principle “to encourage development approach in the two f irst plans the private sectors to be the productive and signif icantly caused the different of Thai trade system”. Obviously, he established the people’s income gaps because the ideolo- Board of Investment (BOI), National Economic gies of the two f irst plans are to develop the

6 Thailand’s Economic and Social Development in the Modern Period: from Open Door Policy to Good Governance Arpharatsami Namanee infrastructure and the GDP. Although they can economy obviously grew. However, there were increased the GDP, both the higher and the many problems such as the poverty, the weak middle classes can access the interest while economic structure, so the f ifth plan was the most Thai people (the lower class) could not “New Approach” for Thailand’s economic and access (The section of Study and Development social development. Thailand’s government Publication, National Social and economic wanted to correct the economic and social Development Committee Department, 1988) structure, the agricultural structure, the poverty The 3rd Plan (1972-1976): The important and the public administration. So the public objectives of this plan are to develop the well fair was better than that in the past. (The economic structure and to allocate the incomes section of Study and Development Publication, to the lower class. The government endeav- National Social and economic Development ored to increase the economic growing rates, Committee Department, 1988) the agricultural goods, and the irrigation. The 6th Plan (1987-1991): The f irst f ive Unfortunately, the World’s economic confronted plans can develop Thailand’s economy and a problem because of the increasing of the oil’s society based on the capitalism approach. It prices. So the infl ation reached the highest point is reported that the national income increased and the World’s economic was hard-pressed. from 58,900 million Bath in 1961 to 1,041,920 Thailand also affected by the world’s economic million Bath in 1985, According to the educa- crisis too, so the education and the public heath tion, the secondary schools were established were insuff icient especially in rural areas. (The for every districts. And the public health care section of Study and Development Publication, was extended to every region in Thailand so National Social and economic Development the people’s quality of life was satisfactorily Committee Department, 1988) developed. The 6th plan wanted to increase the The 4th Plan (1977-1981): Thailand’s eff iciency of the national social and economic government endeavored to increase the development in many ways such as the produc- economic growing again but it could not stably tion system, the allocation of the personal in- keep the price of agricultural product. The come for the lower class. (Off ice of the National income gaps were signif icantly increased. Economic and Social Development Board. the Furthermore, the social well fair was not enough National Economic and Social Development especially in the northern and the north-eastern Plan, 2012) areas. It is reported that the children around The 7th Plan (1992-1996): The 6th plan 70-80 percent in those areas had the shortage caused Thailand’s economic expanded for 10.5 of food and health care. (The section of Study percent/year and reached the highest point and Development Publication, National Social over the past 25 years and engaged with the and economic Development Committee world economy’s structure more than that in Department, 1988) the past and the Thai people had the better The 5th Plan (1982-1986): From the quality of life Then, Thailand’s government 1st to the 4th plan, the overall of Thailand’s intent to continuously develop its economy.

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So that, the 7th plan wanted to encourage the Economic and Social Development Board. the economic growing, to allocate the personal National Economic and Social Development income, to develop the human resource, to Plan, 2012) preserve the environment and the natural The 10th Plan (2007-2011): The 9th plan resources. (Off ice of the National Economic supported the economy’s growing around 5.7 and Social Development Board. the National percent/year. The economic stability was better Economic and Social Development Plan, 2012) and Thai people’s quality of life was improved. The 8th Plan (1997-2001): From the Like the 9th plan, the 10th plan followed the 1st plan to the 7th plan period, Thailand met King’s suff iciency economy philosophy for success in economic development but there the green and happiness society which Thai were many problems followed the development people have the merit, the strong family, the process in capitalism approach such as the strong community, the peace society, the qual- materialism, the natural resources delegation ity economy, the quality environment, the good and the pollution in the industrial areas. As a governance and the democracy. (Off ice of the result, this plan encouraged both human and National Economic and Social Development economic development. Beside this, the reser- Board. the National Economic and Social vation of the natural resources is necessary. Development Plan, 2012) (Off ice of the National Economic and Social From the 1st to the 7th National Development Board. the National Economic Economic and Social Development Plans and Social Development Plan, 2012) based on the capitalism approach which After Thailand’s economic crisis in supports the economic growing rates. The 1997 on ward, the Thailand’s government governments of Thailand in that time emphasized the good governance principle with endeavored to increase the national income, attempted to utilize the good governance the personal income and economic growing principle in government affair. rates. In the same time, Thailand encountered The 9th Plan (2002-2006): The economic with many problems such as the different of the crisis in 1997 caused Thailand’s economy in income gaps, the poverty and the environment troubles and most Thai people encountered problems. Furthermore, when the world faced with the serious economic problems. It is the with the economic crises, it always affects results of the imbalance development, so Thailand’s economic situation too. Certainly, the 9th plan must accentuated the “Human Thai people must face with economic problem Development” for “Sustainable Development” especially in the economic crisis in 1997. It Then, the National Social and Economic caused Thai people troublesome, so from Development Plan followed “His Majesty the the 9th plan to the present plan, the National King’s Sufficiency Economy Philosophy”, Economic and Social Development Plan base it was used as the method for sustainable on His Majesty the King’s suff iciency economy development. In that time most Thai people philosophy. interested in this philosophy. (Off ice of the National

8 Thailand’s Economic and Social Development in the Modern Period: from Open Door Policy to Good Governance Arpharatsami Namanee

The Thailand’s Economic and Social 4. International Economy: Thailand Situation in the Present Period attended to support the neighboring countries Thailand had used the National for reduce the development gap especially in Economic and Social Development Plans from Mekong Sub Region. 1961 to the 10th plan. From the implementation 5. Social Situation: Thailand has the of the plans, the Off ice of the National Econom- progress of the development in many aspects ic and Social Development Board has reported such as job’s stability, the income, the educa- Thailand’s economic and social situations are tional chance, the public health care. However, as follow: there are many problems that will be developed 1. Macro Economic: In the present such as the social structure, the income period, it is reported that Thailand’s economic distribution, the safety of life and asset, way of growing rate is 7.8 percent in 2010 which life and the people’s participation. recover from the world’s economic problem. 6. Natural Resources and Environ- The economic growth is the result of the ment Situation: Many decades Thailand’s increasing of the exportation rate, the natural resources have been over used for consumption, the private investment, industrial economic development. They has been degrad- production, the hotel and the retail. While, the ed incessantly, it is reported that the forest area agricultural production is decrease because of left 33.5 percent of the country. Furthermore, the fl ood. the soil quality was decreased, the coast area 2. The country’s competitiveness: was lost. Regrettably, these factors cause the World Economic Forum and World Bank had decay of the natural resources and it will af- lowered Thailand’s competitiveness, found that fect the sustainable development in the future. Thailand competitiveness is lower than Japan (The Off ice of the National Economic and and who develop their economy with Social Development Board, 2012) innovations. Beside this, in ASEAN Thailand The 11th Plan (2012-2016): The Off ice competitiveness is better than many countries of the National Economic and Social Develop- except Malaysia. From the analysis of ment Board had studies the global’ situation the indicators, represent that the factors in and Thailand’s situation in the present period productive sector are weak, the government and summarized that Thailand continue facing affair is ineffective and not transparent, the with major global and internal changes which corruption, the crime, the violence, and the laws may either pose threats to or provide opportuni- implementation is ineffective including the affect ties for the country’s development. of the world’s economic problems. 3. Infrastructure: In 2010 the Interna- Major global changes tional Institute for Management Development 1) Changes in global rules and regula- (IMD) ranked Thailand’s infrastructure at 26 in tions have infl uenced the direction of future Asia Pacif ic, lower than Singapore, Hong Kong development. The 2008 world economic crisis and Malaysia. has led to adjustments in global rules and

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regulations in the areas of trade, investment, tunities in reducing inequality and enhancing f inance, and environmental and social matters. Thailand’s competitive edge, and threats to the Reformed rules and regulations in trade and in- country’s development. vestment have focused mostly on transparency, 7) International terrorism has been a climate change, intellectual property rights and threat to the world community. Transnational international cooperation. terrorism and crimes tend to spread across the 2) Multi-polar world economy in the new world and are increasingly violent. (The Off ice world order is increasingly important in shaping of the National Economic and Social Develop- development. Adjustment to a multi-polar world ment Board, 2012) economy, in which Asia has become an impor- tant engine of global growth, is imperative for Major internal changes Thailand. Meanwhile, the BRICs and ASEAN 1) Economic aspect: Over the past are becoming new economic centers. decade, the Thai economy has experienced 3) Many countries are moving toward moderate growth with stability. While the an ageing society. During the period of the industrial sector has played a major role in 11th plan, the number of older persons around production, the agricultural sector remains a key the world is expected to increase by 81.9 source of income and a base for value added million. Changing demographic structure toward activities. Very recently, the service sector has an ageing society in many countries will affect emerged as an additional engine of growth. international migration and the diversif ication 2) Social aspect: Thailand is becoming of cultures. an ageing society due to changes in population 4) Global warming has some effects structure, characterized by the increase of older on climate change all over the world. Global persons while the size of younger population temperature has increased on average of 0.2 and workforce decrease. Although potential degree Celsius per decade over the past 30 development opportunities are provided for years, and has cause unpredictable climate all Thai people, issues related to education changes as well as frequent and severe quality, child intelligence, risk behaviors natural disasters. Ecosystems in many areas for health, and low labor productivity have have become vulnerable, resulting in the loss remained major concerns. Thai society has of fl ora and fauna. confronted a crisis of declining ethical and 5) Global security of food and energy moral. under severe threat. Rising demand for food 3) Natural resource and environmental and energy is due to signif icant increase in aspect: Natural resources have been depleted; the world’s population, whereas the supply of and the environment degraded. Moreover, raw materials has been constrained by limited climate change has exacerbated the problems arable lands, technology, and climate change. of natural resources and the environment, 6) Vital role of advanced technology in which have affected agricultural production and economic and social development. Advanced poverty. (The Off ice of the National Economic technology can be regarded both as oppor- and Social Development Board, 2012)

10 Thailand’s Economic and Social Development in the Modern Period: from Open Door Policy to Good Governance Arpharatsami Namanee

Risk Assessment: Thailand will encoun- 2) To develop people with integrity, ter risks and has to enhance societal resilience knowledge and skills appropriate to their ages, in order to effectively meet challenges in the and to strengthen social institutions and local following six areas; public administration is communities for positive adaptation to changes. ineffective, economic structure remains vulner- 3) To enhance the eff iciency of pro- able, demographic structure has changed with duction and services based on local wisdom, older persons increasing, while the younger knowledge, innovation and creativity by devel- and working populations have decreased, oping food and energy security, reforming the social values and traditions have deteriorated, structure of the economy and consumption to natural resources have been depleted, and the be environmentally friendly, and strengthening environment degraded and national secu- relations with neighboring countries in the region rity is still critical. (The Off ice of the National for economic and social benef its. Economic and Social Development Board, 4) To build a secure natural resource 2012) and environmental base by supporting com- munity participation and improving resilience Vision, Missions and Objectives of the to cushion impacts from climate change and 11th Plan (2012-2016) disasters. (The Off ice of the National Economic The 11th Plan is an indicative medium- and Social Development Board, 2012) term strategic plan aimed at achieving the vision The Off ice of the National Economic of the year 2027 which was set out by all parties and Social Development Board had analyzed in Thai society, that is both global and Thailand’s situation and written “Thai people are proud of their national and implemented the 11th Plan. The signif icant identity, in particular hospitality. They also issues in this plan are to build the habitable, follow the path of Suff iciency Economy with democratic society and to follow His Majesty democratic values and good governance. the King’ Suff iciency Economy Philosophy. In The economy is based on self-reliance and this context, my argument rests heavily upon increasing linkages and competitiveness on the the assumption that the success of the plan global market.” implementation base on two important factors, The 11th Plan is the f irst step toward they are the quality of the citizen and the the long term vision of 2027. For the next f ive economic structure. These factors is the mostly years, vision and missions are set as follows:- effect to the potential of development. Vision “A happy society with equity, In short, the National Economic and fairness and resilience.” Social Development Plan had been imple- Missions mented for 51 years. Thailand’s economic and 1) To promote a fair and quality society social development cannot reach the satis- so as to provide social protection and security, factory point as we have anticipated, but the to enjoy access to a fair judicial process and natural resources were degenerated consis- resources, and to participate in the development tently. There are good reasons to study and process under good governance. concern about the sustainable development.

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The Good Governance Approach social’s need in the both present and future” With the end of the Cold War in the (UNESCAP, 2010) 1990s, the term “good governance” came into The United Nations Development circulation, which signif ied prescriptions by Program (UNDP) clarif ied the meaning of good donor agencies for carrying out economic and governance “The implementation of the political, political reforms by recipient countries. These administrative and economic power in country’s prescriptions were presented by international affairs in every level which the mechanism, donor agencies such as the World Bank and the process and institution that the citizen and IMF were expected to be met with compliance. social groups can represent their need, interest, The World Bank in the early 1990s empha- right and their duties legally. The coordina- sized four objectives that had to be achieved tion and compromise in the diversity society for increasing economic growth. They were: by those mechanism, process and institution” increased government investment in education, (UNDP, 2010) health care and nutrition; greater competition The following up of such principles in in domestic markets; greater integration of 1999 after the Thailand’s economic crisis in the domestic economy; and the creation of a 1997, the results have been outlined by the stable macro-economic environment. (Surendra Thailand’s government. Begin with the Thai- Munshi and Biju Paul Abraham, editors, 2004) land’s constitution 1997 comprehensively set The World Bank clarif ied the meaning of the basis of good governance. Moreover, there good governance “It is the manner and the way are the government’s laws and regulations, of power utilizing for employing the economic they are the Off ice of the Prime Minister’s and social resources for sustainable develop- regulation that build the good governance ment which comprehend the participation from (1999), Government Regulation Act (2002), any sector, the management in government Decree of the good governance principle (2003) sector, the responsibility, the law that involving and the Strategic Plan for the bureaucracy development, the transparency and the informa- development (2008-2012) (The Off ice of the tion” (World Bank, 2010) National Economic and Social Development The United Nations Economic and Board, 2012) Social Commission for Asia and the Pacif ic In private sectors, good governance has (UNESCAP) clarif ied the meaning of good been applied in many organizations such as governance “The decision- making and imple- The Stock Exchange of Thailand enforced its mentation process (or not implemented) with regulations “Code of Best Practice for Directors the suggestion, the good governance is the of Listed Companies” in 1999. Then, in 2001 guarantee for reducing the corruption, the “the Good Corporate Governance Committee” minority’s opinion is considered, the disad- was established. Thereafter, in 2003 the Stock vantaged people’s voice is applied in decision Exchange of Thailand joint with The Securities –making process, including to respond the and Exchange Commission to direct and

12 Thailand’s Economic and Social Development in the Modern Period: from Open Door Policy to Good Governance Arpharatsami Namanee supervise the companies registered in the Stock develop and promote the government’s Exchange of Thailand. administrative system to be fl exible. The good governance conceptual 3) To develop and encourage bureaucracy’s focus was explicated by Off ice of Public Sector personal management system base on Development Commission Thailand in 2009 as good governance principle which utilizing the “good governance rating” for pioneer and the merit system and provide the stability evaluate the good governance levels in the with knowledge-based and public workman- government sectors and provinces. Beside ship. this, it proposed 10 good governance principles. 4) To successively develop the govern-ment’s They are Effectiveness, Eff iciency, Responsive- off icers to increase the capability in their ness, Accountability, Transparency, Participa- duties especially in the important positions tion, Decentralization, Rule of Law, Equality and which concern with the country’s develop- Consensus Oriented. (Public Sector Develop- ment strategies. ment Commission Thailand, 2010) 5) To encourage the merit standard and good As we have seen, Thailand’s economy governance to the government’s off icers and society have continuously developed for and to increase the transparency in govern- many decades. Obviously, good governance ment’s sectors. principles have been utilized especially from 6) To support the local government’s affair to the lately 1990s to present. My question is be the eff iciency, transparency and respon- why Thailand’s economic and social develop- siveness to the people’ expect. ment cannot reach the satisfactory point? Why 7) To develop the bureaucracy to be the we must encounter with many problems go transparency system with checking and together with the development? I suggest that evaluating base on merit standard. we must study to f ind the strategies for sustain- 8) To encourage the participation in govern- able development. ment affair, the citizen can participate in economic and social policy and planning Good Governance in Thailand’s Gov- process both in the nation-level and the ernment Policy local-level. As well, a recent policy of Thailand’s 9) To encourage good governance process in Government proposes the good governance the private sector especially in the transpar- principle in a part of it to encourage the effec- ency checking system and to support the tiveness of the government’s affair is as follow: responsibility to the customers, clients and 1) To successively develop the bureaucracy steak holders. (www.thaireform.in.th/, 2012) by outline the strategic management in A new policy has been introduced nationlevel with the visions and the utilizing requiring every government sectors and of Information technology in planning and including the private sectors to implement the decision-making process. good governance principle. The fundamental 2) To successively encourage, enhance, questions of the success arise. First, how it will

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be done? And second, when it will be done? My argument about the macro-economic I think it is important to be clear about these policy, there are three basic questions- What is points. Thailand’s position in the world stage? What is the position in the world stage we will reach? Thailand government’s Economic and What are the driving force-factors used to the Social Development Policy development? And how long it should take time? Economic Development Policy 2) Make Money Policy: The Thailand’s The policy of Thailand’s government government desire to encourage the tourist introduced many aspects of economic and industries, extend the agricultural and food social development, divided in 3 aspects, they industries’ role as the center of food production, are macro-economic policy, make money policy develop Thailand to be the center of agricul- and adjust the economic structure policy. Let tural market, encourage and impel the energy me introduce the important features of them, industry, enhance the industrial competitive the policy showed that follow: ability including the communities enterprises 1) Macro-economic policy: The Thai- with the creative economy, encourage the land’s government desire to distribute the in- entrepreneurs to extend their business to the come, increase the high and stable economic neighboring countries that have the labor and growing rates, enhance the extremely employ- raw materials, gravitate the investment into the ment rate, encourage the f inance approaching, countries and build the new cities for business, develop the potential of the communities’ funds, create the quality and high wage jobs to the develop the f inance institutions to have the people, give the chance to access the loan and responsibility to the people including utilizing the build the trade and investment networks. (www. good governance principle in f inance system, thaireform.in.th/, 2012) adjust the tax system to promote the country’s I do not deny the important of any rea- competitive ability, build the impartiality in the son for making money, However, few comments society, encourage the resources eff iciency on this issue may be helpful to point out the applying, promote and utilize the disciplines in connection between the economic develop- the f inance sector, develop the elements and ment is not only to make money but also to structure of the expenditure, encourage the link with the other aspects especially in the private sector to participate in government’s social, human right, knowledge and human affair, encourage the local government sec- dignity aspects. tor to be the eff icient organization, adjust the 3) Economic Structure Adjustment state enterprise to be the eff icient organization, Policy: manage the state’s property including the local Agricultural Sector: The Thailand’s wisdom way of life and culture for the economic Government desires to encourage the National stability, (www.thaireform.in.th/, 2012) Farmer Council as the mechanism for com-

14 Thailand’s Economic and Social Development in the Modern Period: from Open Door Policy to Good Governance Arpharatsami Namanee munication with the government, increase the Social Development Policy plant production, increase the animal produc- 1) Education Policy: Thailand’s tion, develop the f ishery, enhance the basic of Government desire to accelerate develop the agriculturalist family’s strength, make the education quality with the knowledge system agriculturalist family’s data system and can link reform, build the education chances, reform to the agriculturalist’s credit cards, accelerate the teacher to be the professional career, the agricultural business, build the new gen- manage the higher and vocation education to eration agriculturalist, develop the agricultural appropriate with the labor demand, accelerate industries for increasing the competiveness in develop information technology for education global market. (www.thaireform.in.th/, 2012) as well as the international standard, support Industrial Sector: Thailand’s Government the research and development to create the desire to enhance industrial sector’s competi- nation’s wisdom, develop the universities to tiveness ability, enhance the industrial sector to be the research universities in the world stage be the creative economy sector instead of the and increase the ability of human resources labor intensive-industry, develop and promote for ASEAN community. (www.thaireform.in.th/, the agricultural industry, enhance the SMEs 2012) ’strength, specify the industrial production’s The Thailand’s Government tries to basic standard and quality, develop the new develop the education in many ways. For this industrial zones, accelerate develop the indus- issue, I would like point out the necessary of the trial sector to amicable with the environment education: the quality and suff icient of education and communities, encourage the industrial tax is the basic apparatuses to prepare its citizen standard to safe energy, support the entrepre- for the development in every aspects especially neurs to do the business in the concurrently in the politic, social and economic. Furthermore, industrial zone, accelerate explore and seek the education unavoidably inter-act with the the important mineral which useful to the politic, social and economic aspects. Thus, the economy. (www.thaireform.in.th/, 2012) government has to systematic plan to develop From my opinion, economic structure and reform the education and the process of adjustment is necessary in Thailand, although the reform and the development is need the is it depend on many constraints. Fundamental time, may be for decades. For these reasons, economic structure and people quality are the the government has to really pay attention in key factors for successful adjustment. Since the these duties for long time. success of economic structure adjustment is 2) Public Health Care Policy: The base on the “human” as the mechanism to play Thailand’s Government desire to develop the the important roles in the appropriate economic system of Public Health Care quality and link structure. From this reason, the Thailand’s to every level, produce the Public Health Care Government has to study the Thailand’s people staff for increasing the medical staffs that and former economic structure and then appropriate with the population in each area, evaluate the possible and the time of this duty. integrate build the measure for decreasing the

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malaise and death rates, develop the public chances and the freedom in the way of life. The health volunteer’s ability to be the communi- remarkable that there are the problems occur in ties’ public health management, develop the the development process. They are the income people’s quality of life in every ages, encourage gap still wide, the social structure still has the the people to play sports for encouraging their wide basis with the most of lower class, The health, impel Thailand to be the best practice of Thai politics is also still illiterate democracy. Health Care service in Asia. (www.thaireform. There are two fundamental constraints which in.th/, 2012) affect the effectiveness of the development, The citizen’s health is truly involved the quality of the citizen, and the economic and interact with the education achievement structure. From the Neo-Liberalism point of because if the people have good health, they view that based on the believing “state is the can eff iciency learn and study. On the other atomistic actors” state seeks for the maximum hand, if the people have quality and enough benef it, the cheating is the obstacle for education, they can correctly take care of their cooperation. And what is the state’s interest? health. My suggestion is the government has That we have to studies and explain for the to develop the public health care together with effective policy implementation in Thailand. the education. Lately, in the present time that the threats such as the global warming, the natural resources Conclusion degeneration are increasing. The development Thailand has been developed the with the knowledge-based and good gover- economy and social for many decades, the nance is necessary. I hope that most countries modern period started in King Rama IV period concern about the sustainable development. of reign as the “open door for globalization”. Both situation in the country and the situation Acknowledgment in the world affect the Thailand’s economic This study is made possible by support and social development in every period as we from the Off ice of National Research Council seen. Thailand’s economic and social has been of Thailand. I hereby would like to record its developed, the Thai’s people have the higher gratitude. quality of life, the income, the education

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16 Thailand’s Economic and Social Development in the Modern Period: from Open Door Policy to Good Governance Arpharatsami Namanee

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