Red Shirts and Rowdy Royals

The secret WikiLeaks cables that explain how Thailand went from paradise to political mayhem.

A decade ago, Thailand was a beacon of democracy and progress in a neighbourhood mired in archaic autocracy. Three of its neighbours -- Burma, Laos, and Cambodia -- are trapped in the past and very far from being free. The fourth, Malaysia, is an apartheid state in which access to education and jobs depends on race. Thailand was regarded as the natural leader of the ASEAN bloc and an example for other democratizing nations to follow. Tragically, all that has changed.

Thailand is slipping backwards into authoritarianism, militarism, and repression. And a general election on Sunday, July 3, seems unlikely to change that. It's an election in which whoever wins, Thailand's people are likely to lose.

On the surface, the election is a straight fight between the incumbent Democrat Party of Prime Minister Abhisit Vejjajiva and the Pheu Thai party formally led by Yingluck Shinawatra, the younger sister of exiled telecommunications billionaire Thaksin Shinawatra -- who remains a central figure in Thailand's crisis. At stake is far more than which party will form the core of Thailand's next government. The election is the latest skirmish in a long struggle over the balance of power between elected politicians, the military, and the monarchy. At this stage, Thaksin's proxy party looks set to win power -- and generals allied with the 78-year-old Queen Sirikit, the estranged wife of the widely beloved King Bhumibol, are likely to do all they can to sabotage that.

The election contest can only be understood in the context of multiple conflicts being fought at all levels of Thai society in the twilight years of King Bhumibol's reign. The most momentous of these conflicts center on the palace. Because Thailand has the harshest lèse-majesté legislation in the world -- any perceived insult to the king, queen, or crown prince is punishable by three to 15 years in prison -- discussion of the central role of the monarchy in Thailand's turmoil is outlawed and media reports have had to rely on tortured euphemisms and oblique hints. In theory, the country is a constitutional monarchy in which the king has little formal power but uses his moral authority to intervene at times of great crisis to save the country from disaster; in practice, the palace is enmeshed in politics and intervenes constantly, but usually through a network of loyal royalists to hide its role. Trying to explain Thai politics without reference to the role of the palace is thus like trying to tell the story of the Titanic without any mention of the ship. As Pravit Rojanaphruk, one of the country's most outstanding journalists, wrote in a column this month: "The 'invisible hand', 'special power', 'irresistible force', all these words have been mentioned frequently lately by people, politicians and the mass media when discussing Thai politics, the upcoming general election and what may follow."

A few months ago, through my work as a senior Reuters editor, I gained access to the "Cablegate" database of U.S. diplomatic communications believed to have been leaked by U.S. soldier Bradley Manning. The cables revolutionize the understanding of 21st-century Thailand because unlike almost all journalistic and academic coverage of the country, they do not mince words when it comes to the monarchy. As I began work on an extensive article about the cables, I realized that because it represented an epic breach of the lèse-majesté law, it could never be published by Reuters, and I would be unable to visit Thailand again for many years. I took the decision to publish the article anyway, and resigned from Reuters on June 3 to do so. That I had to leave my job and become a criminal in Thailand just to report on the cables says all that needs to be said about the lack of freedom of information that is stifling important debate on Thailand's future.

Two linked power struggles involving the palace are at the heart of Thailand's crisis. The first is the battle over royal succession. The 83-year-old King Bhumibol has been hospitalized since September 2009, inexplicably refusing to return home to one of his palaces even when doctors pronounced him well enough to do so. A cable by then-Ambassador Eric G. John says King Bhumibol is "by many accounts beset long-term by Parkinson's, depression, and chronic lower back pain." The impending end of his reign has sparked intense national anxiety in Thailand. King Bhumibol's son and heir, Crown Prince Vajiralongkorn, has a reputation for being a cruel and corrupt womanizer. A notorious video showing a birthday party for his pet poodle Foo Foo -- who holds the rank of Air Chief Marshal -- has been widely circulated in Thailand; in it, the prince's third wife, Princess Srirasmi, dressed only in a thong, eats the dog's birthday cake off the floor while liveried servants look on. Thais are terrified of the prospect of Crown Prince Vajiralongkorn becoming king and overwhelmingly support his younger sister, Princess Sirindhorn. But King Bhumibol has shown no sign that he will pass the throne to his daughter -- known to Thais as "Princess Angel" -- and doing so would in any case fly in the face of centuries of royal tradition.

Ironically, the majority of Thailand's most ardent royalists are among the prince's biggest foes, because of their fears that he would destroy any shred of respect for the monarchy and also because he is widely believed to have some kind of alliance with the Thai establishment's nemesis, Thaksin. For this reason, many royalists are rallying round Queen Sirikit in the hope that she can become regent when King Bhumibol dies and rule on behalf of one of Crown Prince Vajiralongkorn's young sons. Queen Sirikit has placed herself in pole position for doing so -- in particular, hard-line army chief Gen. Prayuth Chan-ocha has long been an acolyte of the queen.

But Queen Sirikit, like her son, is a profoundly divisive figure. She has explicitly linked herself to the "Yellow Shirt" mass movement that helped topple Thaksin and successive governments that supported him, and her decision to attend the funeral in 2008 of a young Yellow Shirt woman killed in a street battle with police sparked unprecedented online criticism of the monarchy in Thailand and has exploded the myth that the palace is above politics. Queen Sirikit had long been a backer of the hated son she once described as a "black sheep," but after some blazing rows she seems set on trying to win the throne for herself. That would almost certainly result in violent conflict in Thailand, possibly pitting the pro-queen factions of the military against other army units resentful over Queen Sirikit's influence.

Besides the conflict within the palace over the succession, there is also a conflict among the palace, military, and parliament over ascendancy in charting Thailand's destiny. The military has long been the dominant force in Thai politics, usually in alliance with the royals. Elected politicians have generally had very limited real power. Thaksin changed all that, and his ascent to power and subsequent ouster in a 2006 coup sparked national conflict that has compounded the succession struggle. Thaksin won overwhelming electoral mandates in 2001 and 2005, and he imposed his authoritarian "CEO style of management" on the country. He was deeply corrupt and had little time for democracy, but he delivered genuine benefits, especially to the country's poor, and was rewarded with immense and lasting popularity. But by breaking Thailand's unwritten rule that politicians should operate within narrow boundaries and leave most of the real power in the hands of the generals and monarchist bureaucracy, Thaksin became seen as an existential threat to the palace, and the establishment is determined to prevent his return to power.

Underlying these key power struggles are many others. Thailand's crisis also involves a class conflict in the rigidly hierarchical society, with the rural and urban poor broadly backing Thaksin against an establishment unwilling to allow the "uneducated masses" to decide who runs the country. The conflict also has a regional dimension: Thaksin is very popular in the north and the impoverished Isaan region in the northeast, while the Democrats maintain a traditional stranglehold on the more prosperous south of the country. And it's partly a contest between competing economic visions -- the populist crony capitalism espoused by Thaksin and the "sufficiency economy" model promoted by King Bhumibol. At the deepest level of all, the conflict is about what it means to be Thai, and whether Thais must have unquestioning reverence for authority and the monarchy or become a more open and democratic society.

Thailand, a strategic crossroads and transport hub in Southeast Asia, is also a key battleground in the economic and geopolitical rivalry between the United States and China. The United States has long been a key ally of Thailand's military and monarchy, a relationship forged during the war against communism in Indochina. U.S. diplomats see Thaksin as more willing to work with China, though he studied in the United States and also considers himself a friend of America. China is increasingly courting the Thai military, and some analysts even see the succession struggle in geopolitical terms: Princess Sirindhorn speaks fluent Mandarin and is very close to China's government; the Chinese have built a special compound outside Beijing for her to stay in during her frequent visits. Crown Prince Vajiralongkorn is a diplomatic disaster, and a planned trip to China in 2007 had to be canceled because of his unreasonable demands for special treatment. Queen Sirikit is an ardent Thai nationalist wary of outside influences.

One troubling insight shines through very clearly in the U.S. cables: Leading members of Thailand's establishment not only hate Thaksin, but they are terrified of the prospect of him regaining power and wreaking revenge on those who have wronged him. Moreover, with the king old and ill, the royalists do not want to risk a pro-Thaksin party holding office when he dies, as that would give Thaksin and his allies a huge advantage in determining how the succession struggle plays out. For all these reasons, if his sister Yingluck wins the election, she is unlikely to govern for long: The establishment is likely to resort again to Yellow Shirt mob violence, a judicial intervention, or even another coup to unseat her. And that will tear Thailand even further apart.

But an election result that keeps the Democrat party in power would be no better in terms of solving Thailand's strife. The party is almost certain to come second, according to opinion polls, and if it forms the next government it will have to do so in a coalition with the Bhum Jai Thai party of Newin Chidchob, a politician who even by the depressing standards of Thai politics stands out as being particularly venal and dangerous. Many Thais will feel their political aspirations, expressed democratically via the ballot box, have again been ignored by the elites. And Thailand's national agony will continue.

One further crucial struggle is being fought in Thailand today. It is between those who believe there needs to be a frank and open national debate about the role of the monarchy and the influence of the military in 21st?century Thailand, and those who seek to suppress and criminalize such discussion. The leaked cables contain strong evidence that King Bhumibol is in the former camp. Queen Sirikit and of course the military are strongly opposed to such debate. They seem to have failed to realize that they are standing against the tide of history and the march of technology. They cannot stop Thais from becoming informed in private, and if they outlaw public discussion and fail to evolve, the result is likely to be violence and the possible end of the Chakri dynasty. Only debate and compromise can save Thailand from further conflict. And that's another reason that the leaked U.S. cables are so valuable. If they can help destroy the lèse-majesté law once and for all and promote debate, they will have done a great service to a proud but troubled nation.



Lagarde's To-Do List

What should Christine Lagarde do on Day 1 as managing director of the IMF? Five experts weigh in.

Cut Greece loose

It is too late to advise Christine Lagarde to reconsider taking on the job of IMF managing director at what is likely to prove to be the most challenging period in that organization's 65-year history. There's still time, however, for her to avoid taking ownership of the terrible mess her predecessor, Dominique Strauss-Kahn, created for the fund with his ill-considered bailout operations for Greece, Ireland, and Portugal. Indeed, it would appear that Lagarde's interests and those of the global economy would both be served best if she were to take a fresh look at the IMF's failed policy approach to the eurozone sovereign debt crisis.

Not to put a fine point on it, but the IMF-EU's "no default and no exit from the euro" approach for the European periphery is not working. The IMF and the European Union have designed a straitjacket of brutal austerity fiscal measures that are producing deep recessions in those countries, which in turn are undermining their tax bases and sapping their political will to stay the adjustment course.

The current program makes no sense. Although it is patently clear that the austerity medicine is not working in Greece, the IMF and EU are about to double the dose with their latest Greek bailout package. The fund is already applying the same failed recipe to Ireland and Portugal.

The policy options Lagarde faces on assuming office could hardly be less appealing. Continuing the IMF's failed policy prescription of sustained austerity without default or devaluation is all too likely to end in tears for everyone involved. It is also all too likely to compound the European sovereign debt crisis and blacken the IMF's reputation across Europe, in much the same way as occurred in Asia in the late 1990s. Yet initiating a course correction in IMF policy is all too likely to trigger a crisis in Europe's banking system that would make the fund the target of international criticism.

If well-handled, however, the latter approach might at least allow for an orderly restructuring of the European periphery's debt, and an orderly exit of those countries from their use of the euro currency. Risky as that strategy might be for the IMF, it is the one Lagarde should opt for if the world is to be spared a second Lehman Brothers-style banking crisis, this time in the heart of Europe.

Desmond Lachman is a resident fellow at the American Enterprise Institute.

Take an oath of objectivity

"I, Christine Lagarde, solemnly swear that I will neither seek nor accept any public office -- elected or appointed -- in France, or in any European agency or institution, for a period of five years after leaving my post as managing director of the IMF."

Issuing an oath of that nature should be the first order of business for Lagarde. She comes to the International Monetary Fund as the chosen candidate of her fellow European policymakers, just like all of her predecessors, under the selection system that has prevailed since the IMF's establishment. Anachronistic as that system is, it is particularly pernicious in Lagarde's case because of the clear conflict of interest presented by the crisis in the eurozone. The European politicians who anointed her have enormous stakes in seeing the crisis resolved in ways that benefit them politically, whereas the IMF's task is to promote a credible approach that will resolve the crisis sustainably. It is all too easy to imagine how these interests will diverge as the crisis develops; arguably, they already did when Dominique Strauss-Kahn was heading the IMF while simultaneously planning to run for president of France.

The question of whether Greece's debts should be restructured is just one case in point. Europe's power brokers quailed at the prospect that the losses inflicted on their banks would require them to pour more taxpayer money into their financial systems, and they desperately scrambled for solutions that would defer the pain, however inevitable it may be. Is that the best in the long term for Greece, for Europe, for the world? I don't think so, but regardless of the pros and cons of that particular argument, the point is that the IMF needs to show that its policies are as free from short-term political considerations as possible. Its most important asset is not its money but its credibility, and if it is perceived by financial markets as little more than Europe's tool, its effectiveness in restoring confidence will be severely curtailed.

Lagarde should do everything in her power to eliminate doubts about where her loyalties lie. When Europe united behind her candidacy, I argued that her selection would be a travesty. I haven't changed my mind, but at the very least she should forswear the ambition to hold any office for which she would depend on the support of European leaders or voters. She may be morally obliged to take steps that will make her as unpopular in Europe as previous IMF chiefs have been in places like Brazil and South Korea. She must show that she is prepared to do so if necessary.

Paul Blustein is a nonresident fellow with the Brookings Institution and a senior visiting fellow with the Centre for International Governance Innovation.

Let regional organizations do the hard work

Christine Lagarde has a lot on her plate, with Greece as the most pressing point on the agenda. But she should not overlook the issues of political representation that surrounded her own election bid.

Many IMF member states are openly calling for a non-European to lead the fund for the first time in its history. This follows a recent reform to IMF governance in which some vote shares finally shifted from Western Europe to emerging-market countries like China, India, and Brazil. The reform was necessary, as power on the executive board no longer reflected global economic realities.

At the same time, however, Western governments have to think about domestic politics. Consider the United States: If it gives up too much power, isolationist forces in Congress have a good excuse to say "no" the next time the president asks for an increase in IMF contributions. With that in mind, small Western European countries gave up the most votes in the last round of reforms. But these countries, too, have domestic politics to consider. The Swiss, for example, would never have joined the IMF without a seat on the executive board. If they fail to retain their seat, they may be less inclined to support the institution.

Power at the IMF is on a tightrope. It used to make sense for the United States to provide the lion's share of resources and receive commensurate political control. As emerging markets continue to grow, however, they will demand more voting power. Eventually, we will reach an impasse where Western governments will not have the domestic political capital to assent to the changes demanded by the developing world.

That development may be inevitable, but it does not mean that we give up on global cooperation. The power asymmetries that allowed the IMF to function in previous decades -- in which the most powerful actors assumed responsibility for providing the public good -- have diminished on the global level, but they still persist in regions. The IMF should therefore embrace an increasing role for regional financial institutions, recognizing that the political will to provide liquidity in future crises will come from the regional hegemons with the most at stake. For example, the United States led in Mexico's "Tequila Crisis" in the early 1990s, while Japan led in the East Asian financial crisis of the late 1990s, and Germany leads in the current eurozone crisis.

In this multipolar world, the IMF still has an important role to play: namely, that of the bad guy. Regional financial institutions will want to avoid the political backlash of imposing tough conditionality on their neighbors. To escape this, Asia's regional version of the IMF (the Chiang Mai Initiative Multilateralization) has explicitly tied its lending to IMF conditionality, and the IMF's main role in the European debt crisis is to enforce policy conditions.

As U.S. financial power declines, so will the power of the global institutions it set up at the end of World War II. Recognizing the decentralization of power, Lagarde can help the IMF to be more effective by cultivating regional coordination. The locus of global financial power is shifting, and the IMF should adapt.

James Raymond Vreeland is an associate professor of international political economy at Georgetown University. This commentary was adapted from his remarks delivered at the Bank of Korea international conference on May 26 and 27, 2011, in Seoul.

Sharpen the Fund's economic analysis

Christine Lagarde's most pressing concern will no doubt be the release of the next tranche of IMF funding to Greece. But she must not delay in developing a decisive agenda for resolving the long-term issues that threaten the IMF -- issues that went ignored by her predecessors.

First, there is the matter of internal IMF politics. The fund can no longer postpone giving emerging countries a greater role in decision-making. Sooner, rather than later, Europe should relinquish its privileged position in selecting the managing director. Lagarde should set up a credible expert group to devise a transparent and competitive process by which her successor can be chosen. This time, with Mexico's Agustín Carstens challenging Lagarde for the job, the contest for the top post was more competitive than usual, to the benefit of all. But the distribution of power within the IMF is still far too heavily tilted toward the West.

On substantive economic issues, I would stress two in particular.

The IMF's normal function is to provide short-term assistance to member countries in distress. But it has never undertaken true systematic taxonomic analyses of their problems and of the characteristics and objectives these countries have: Is the applicant's payments difficulty temporary or permanent? Is the underlying difficulty monetary or real? Is the country highly indebted, or is the current deficit free from a debt overhang?

Ideally, the IMF would not only be aware of these differences, but the terms of its assistance would be sensitive to them. This is currently not the case. For example, the late-1990s East Asian crisis was in the context of "good fundamentals," while the Latin American crises reflected "bad fundamentals"; and yet the conditionality applied by the IMF to each situation was very similar. Lagarde should develop ways to ensure a better match between the fund's proposed programs for specific countries and the actual economic situations there.

Next, Lagarde should endorse and highlight the important work being done by Olivier Blanchard, the IMF's chief economist, on international capital flows. Many of the world's pending problems, Blanchard has shown, have to do with excess inflows of money into emerging-market economies spurred by the U.S. Federal Reserve's quantitative easing program. This is fundamentally different from the capital flow problems that plagued East Asia a decade earlier. The IMF should be at the forefront of dealing with this new international problem, but it has yet to fully reckon with it.

Padma Desai is the Gladys and Roland Harriman professor of comparative economic systems at Columbia University and the author of Financial Crisis, Contagion, and Containment: From Asia to Argentina and From Financial Crisis to Global Recovery.

Give the developing world a voice

For all the talk of the IMF bailing out the eurozone, let's not forget that there are still many developing countries that depend on its assistance -- and that the conditions the fund attaches to its loans sometimes exacerbate poverty and social inequality in these fragile places. Europe now knows all too well why all recipient countries want to have a say in IMF policies and decisions that so greatly affect them. So, in her new role as managing director, Christine Lagarde should make sure that they do.

First, she will decide what to do with the nearly $3 billion the IMF unexpectedly received from the sale of its gold reserves last year. This money must be directed to where it is most needed and where it will have the most impact. That means channeling the excess profits to poor and vulnerable citizens of developing countries -- meaning, not to Europe or back into savings.

Needless to say, the vulnerable citizens of developing countries don't get a say at the IMF board meetings. Rightly so, there is deep concern that European governments are quietly moving to bury the surplus funds in the IMF's books, so that they can maintain disproportionate power over what is done with it.

This is precisely why Lagarde must accelerate governance reform of the IMF and act to loosen Europe's stranglehold over the IMF board of directors. While the IMF board agreed last year to give emerging and developing economies more of a voice in the institution, the 2.8 percent gain in quota share was simply not good enough. The continued unwillingness of European governments to reduce their overwhelming presence on the IMF board is a problem, and the disappointing process to replace Dominique Strauss-Kahn as managing director has further damaged the IMF's credibility. There was talk of openness, but everyone realized that Mexico's Agustín Carstens was simply a token candidate. The decision to appoint Lagarde was ultimately agreed to in Paris and Washington before the candidates were ever announced.

U.S. President Barack Obama's administration could have stepped up and welcomed emerging powers taking a leadership role in the IMF, as it has done in encouraging the G-20 process, but it chose instead to stay quiet.

Allowing emerging markets a say that accords with their rising global influence will only benefit the institution. If the United States and the European Union continue to hold on to power through structures that reflect an obsolete economic and political world order, rising powers will inevitably turn away toward institutions where they do have a voice.

Raymond C. Offenheiser is the president of Oxfam America.

Jim Watson/AFP