Photo : Red Shirt supporters of ousted premier Thaksin Shinawatra have dug in at their encampment, protecting themselves with a bamboo barricade during their on-going protest to oust the government in Bangkok, Thailand.
The protests by tens of thousands in the red-shirted movement have paralyzed Bangkok for nearly two months. The economic cost of the prolonged protest and violence that it has unleashed has been variously estimated to cost $3.1 billion. If there is no peaceful solution, the Thai turmoil will not only batter its immediate neighbors, but also trade partners around the globe with far-reaching political consequences for the Association of Southeast Asian Nations as well as authoritarian regimes in the region.
The deadly clashes between the red-shirts led by the National United Front of Democracy against Dictatorship and the security forces have so far left 26 people dead and more than 1,000 injured. The Thai media have been reluctant to depict the conflict as some sort of civil war, but clearly the society is deeply polarized, moving closer to the brink.
Endangering Food Exports
Unless the parties reach a political compromise, the rising political violence could have serious and lasting consequences for the Thai economy and political landscape of the region. Although the red shirts are not from the rice-growing part of Thailand, the economic dislocation brought by the turmoil could seriously affect agriculture—a main source of Thai exports. Thailand is among the world's leading exporters of key agricultural products, including rice, sugar, and rubber, and any disruption, especially for the country's rice industry could threaten higher prices worldwide. Rising prices in 2008 triggered violent protests in dozens of countries.
Currently, Thailand is the world's largest exporter of rice, supplying 27 percent of world rice exports and sending more than 6 million tons of the grain around the globe. Its largest export markets are Indonesia, Nigeria, Iran, the United States, and Singapore. As only a relatively small amount of world food production is traded internationally, disruption of supply from key exporters, such as Thailand, due to weather or war, can cause ripples across the world, especially among the one in six who live in poverty.
Other exporters, however, may benefit from higher prices, expand production, and increase their market share with benefits for their farmers and rural communities. Vietnam, India, and the emerging exporter Cambodia would perhaps gain the most from a Thai civil war.
Tourism and Foreign Investment
Second, looming civil war will devastate foreign direct investment, which has yet to recover from the devaluation of the baht and depression of the 1990s. Thailand's central bank has expressed concern that the unrest could discourage new investment. The Board of Investment has seen a few signs of foreign investors seeking to relocate; thus investment pledges this year could fall 15 percent to $9.2 billion. Meanwhile, the baht has strengthened despite the troubles, tending to move in line with other Asian currencies. But the currency could weaken if the government falls or violence escalates.
Third, conflict will slow the tourism industry. Since the demonstrators took to Bangkok's streets, several countries issued travel warnings and advised their citizens not to visit Thailand unless necessary. The country's hotel and tourist industry, providing 22 percent of Thailand's foreign exchange earnings, is already suffering. The prolonged crisis has already benefited other travel destinations in the region as profits have been diverted away from Thailand.
Thailand usually welcomes up to 15 million visitors a year and tourism contributes to about 7 percent to the country's gross domestic product. But the political strife will likely reduce that number. Thailand is surrounded by competitors looking to grab a piece of the regional and global tourism pie, with Vietnam, Laos, and Cambodia all experiencing double-digit growth in arrivals. Singapore, with new entertainment complexes, will surely gain from the Thai crisis. Singapore has announced its ambitious "Tourism 2015 Blueprint," aiming to increase visitor arrivals to 17 million from 10 million in 2007 and raise tourism receipts to $30 billion.
Regional Instability
Fourth, civil war in Thailand could generate political and security consequences for immediate neighbors and distant foreign partners. Although the protest began with a demand for fresh elections and the return of a favorite politician, former Prime Minister Thaksin Shinawatra, the movement has broadened into demands for elimination of the gap between the rich and the poor and a genuine grass-roots democracy.
The call to end elitist politics and the military's dominant role in politics has already encouraged the Burmese opposition to persevere in their fight against military dictatorship. If it continues, the democratic movement could be felt by other authoritarian neighbors like Laos and Cambodia. Intensification of repression could spur a refugee flow out of Thailand, putting ASEAN to a test.
The government of Prime Minister Abhisit Vejjajiva has tried to shut down the opposition's television, radio stations, and websites, and labeled some red-shirted members "terrorists" to deflect Western criticism. The term terrorists can also be used to legitimize the government's harsh measures.
Pro-government royalist yellow shirts, known as the People's Alliance for Democracy (PAD), employ similar tactics, describing red-shirted rivals as "insurgents." Recall that PAD, lauded by current Foreign Minister Kasit Piromya, seized Bangkok's Suvarnabhumi Airport in November 2008. Yet Abhisit's government has done nothing to prosecute the PAD, an example of what the red shirts see as a double standard of a dictatorial government.
But these tactics do not obscure the fact that the state is willing to use force against the protesters. Because of their dislike for the autocratic and allegedly corrupt Thaksin and a desire not to rock Thai political stability, the U.S. government and other Western democratic countries so far have given tacit support to the current government. But if the violence against the protesters was to escalate, they may be forced to withdraw their support and even call for sanctions against Thailand.
Since the world has become increasingly globalized with new issues emerging on a daily basis, keeping politics strictly within the national border is becoming more elusive. Thailand's position in the world economy—as major exporter of food, manufactured goods including components feeding into supply chains in China, and tourism—is built on extensive links, all transmitting the consequences of instability in Thailand faster and further than ever before.
