Wesleyan University The Honors College Thaksin Populism and Beyond: A Study of Thaksin's Pro-Poor Populist Policies in Thailand by Patana Ginger Tangpianpant Class of 2010 A thesis submitted to the faculty of Wesleyan University in partial fulfillment of the requirements for the Degree of Bachelor of Arts with Departmental Honors in Government Middletown, Connecticut April, 2010 2 Table of Contents Acknowledgement ....................................................................... 4 List of Abbreviations ..................................................................... 5 Introduction ................................................................................ 6 Structure of the Thesis .................................................................... 9 Chapter One, Background ................................................................ 11 The Thai Economy, 1968 – 2006 ..................................................... 11 The Political Situation in Thailand from 1932 to 2001 ............................ 15 The 1997 Constitution .................................................................. 18 1997 East Asian financial crisis......................................................... 20 Thaksin Shinawatra ...................................................................... 23 Thai Rak Thai ............................................................................. 26 Thaksinomics ............................................................................. 27 How Thaksin Was Elected ............................................................. 28 Populism................................................................................... 32 Chapter Two, Pro-Poor Policies .......................................................... 35 Introduction .............................................................................. 35 The 30- Baht Health Care Scheme .................................................... 37 Description .............................................................................. 37 Positive Impacts ......................................................................... 40 Negative Impacts ....................................................................... 44 One Million Baht One Village Fund Program ...................................... 51 Description .............................................................................. 52 Impacts of the Village Fund Program .................................................. 56 Positive Impacts ......................................................................... 57 Negative Impacts ....................................................................... 59 The One Tambon One Product Program (OTOP) ................................ 66 Description: the OVOP and OTOP Program .......................................... 67 Positive Impacts ......................................................................... 73 Negative Impacts ....................................................................... 76 Chapter Three, Motivations Behind Thaksin and TRT’s Implementation of Pro-Poor Policies ......................................................................................... 87 Motivations in Implementing Pro-Poor Populist Policies ......................... 88 The 30-Baht Health Care Scheme .................................................... 105 The Village Fund Program ............................................................ 107 The OTOP Program ................................................................... 109 3 Conclusion ............................................................................... 110 Chapter Four, Recommendations ....................................................... 112 The 30-Baht Health Care scheme .................................................... 113 Recommendations ...................................................................... 113 The Village Fund Program ............................................................ 123 Description of the Grameen Bank ..................................................... 123 Recommendations ...................................................................... 125 One Tambon One Product Program (OTOP) .................................... 132 Recommendations ...................................................................... 133 Conclusion ............................................................................... 139 Conclusion ................................................................................ 143 Appendix ................................................................................. 155 Work Cited ............................................................................... 163 4 Acknowledgement I am most indebted to Professor James W. McGuire for his kindness, intelligence, advice, insightful comments, and enthusiasm for working with me throughout the entire process. Without his mentoring, this thesis could not come about. I would also like to thank Professor Tony Day and Professor Damien Sheehan-Connor for their comments and help for my chapter. To Professor Peter Rutland who is always interested in Thai politics and constantly sending me many interesting articles about Thailand. To Professor Alice Mary Haddad and Professor Douglas Foyle for being the best mentors I have ever had. I thank my thesis writing mentor, Jane Weidenbeck, for working with me on many drafts and working with me every step of the way. Your comments and help were useful. Without you, I could not accomplish this thesis. I also thank my lovely housemates, Jess, Holing, and Megu for their moral support. Special thanks to Wilson, Yin How and Ben for reading so many of my chapters so many times and for always giving me useful and insightful comments. Wilson, I will get SNSD girls for you as promised! I thank my biggest supporter, Keisuke, for always being there for me, putting up with me when I was stressing out, and taking care of me. Your help and support have been invaluable and I am deeply grateful for everything you have done for me. I also want to thank Mikako, Yushi, Nong, Wan, Aom, Thomas, and Eric for always keeping me company in ST lab. I want to thank Pat and Som-O for helping me bring all my books to Wes. I also want to thank my best friend of 16 years, Ip, for always supporting me and understanding me. Thank you for all the trips to the library with me. I also thank Mr. and Mrs. Freeman for giving me the opportunity to study at Wesleyan, to experience something new and different, and to broaden my perspective about the world. Lastly, I want to thank my family— dad, mom, Hia-Jet, and my nanny, P’Karn— for their trust, support, love, and for always believing in me. Without all of these people, I would not be able to finish the work that I have always wanted to explore. I hope that this thesis will be helpful some way or another to Thailand and that it helps get Thailand through this hard period of time. 5 List of Abbreviations AEO – Agricultural Extension Office APEC – Asia-Pacific Economic Cooperation BAAC – Bank for Agricultural and Agricultural Cooperatives CSMBS – Civil Servants’ Medical Benefit Scheme EC – Election Commission GNP – Gross National Product GSB – Government Savings Bank HWPDS – Health Welfare for the Poor and the Disadvantaged Scheme IMF – International Monetary Fund LICS – Low Income Care Scheme MPs – Members of Parliament NCCC – National Counter Corruption Commission NESDB – National Economic and Social Development Board NPL – Nonperforming Loan NSO – National Statistical Office or National Statistics Office (Philippines) OTOP – One Tambon One Product OVOP – One Village One Product SME – Small and Medium Enterprise (Development Bank of Thailand) SML – Small, Medium, and Large SSS – Social Security Scheme TAMC – Thai Asset Management Corporation TAO – Tambon Administrative Organization TDRI – Thailand Development Research Institute TRT – Thai Rak Thai UK– United Kingdom 6 Introduction On the eve of September 19, 2006, military tanks surrounded Bangkok, the capital city of Thailand, while then-Prime Minister Thaksin Shinawatra prepared to give a speech at the United Nations in New York. The fate of Thaksin and his party, Thai Rak Thai (TRT) or Thai Loves Thai, changed in that instant. A coup led by General Sonthi Boonyaratklin seized the city and declared the dissolution of the Parliament, and Thaksin and his party (TRT) were ousted from power. After the seizure of the government, many people came out to support and congratulate the soldiers. Many citizens of Bangkok were happy with the coup. Most people in rural areas were not. Thaksin and his party were immensely popular in rural areas, especially in the North and Northeast regions. In these regions, 24 schools kept symbolic torches burning until the end of 2006 to show their opposition to the coup.1 Community radio stations also voiced their dissent. People in rural areas supported Thaksin and TRT because the party had instituted policies that catered to their needs, such as free health care and delayed debt payment. Nevertheless, Thaksin and his business cronies’ corruption had tainted his government’s reputation, and the middle classes came out to protest against Thaksin in 2005. Thailand has been in political turmoil ever since the 2005 protest and subsequent ousting of Thaksin in 2006. The divide between those who support Thaksin (mostly the rural poor) and those who are against him (mostly middle class 1 Phongpaichit and Baker 2009: 290. 7 Thais and technocrats)