July 13, 2003

The Philippine STAR, Opinion Page

Why Thailand is Ahead of Us 

By Babe Romualdez

The last time I was in Bangkok a couple of years ago, I noticed a lot of tourists crawling all over the place. Business was booming, with buildings mushrooming in almost every corner. It was so different from the Bangkok of the past. I remember the Philippines was way ahead of Thailand in education and the economy during the late 70s. Back then, Filipinos were teaching the Thais about agriculture. Both Thailand and the Philippines had almost the same number of people, around 60 million, but economically, we were certainly ahead of them.

Thailand eventually “grew” as globalization took over. But because the government did not heed the warning signs – a bloated population, excessive foreign borrowing, low technology, rise in criminality, corruption and wasteful spending in government, political bickering, speculation-based economic boom, etc. -- the Thai economy found itself on the verge of a meltdown. To hide the resulting instability, the government created a smokescreen so that investors will not pull out. Little did the Thai government know that their dilly-dallying and indecisiveness caused the Thai economy to finally collapse in 1997, forcing the baht to devalue to more than 30 percent against the US dollar. By this time, local Thai companies were already suffering from $70 billion in short-term foreign debt. Education suffered the most, with more than 100,000 students dropping out from primary schools and 90,000 from the junior secondary level. With a domestic public sector debt of US$48.03 billion, and an estimated 1.48 million unemployed Thais (46 percent of the labor force) a year after the crisis, and a 14 percent rise in incidence of poverty, the Thai government knew they had to act fast to get back on track. 

Thailand did not only survive the “economic brushfire” like a phoenix, but through sheer political will, hard work, and a strong leadership, the country was able to move ahead of its neighbors. Their first step was to get a strong leader – Prime Minister Thaksin Shinawatra -- to introduce a new kind of economic growth, one that’s measured not by GDP, but in terms of distribution of wealth within a controlled population growth rate, decrease in incidence of poverty and national debt, and increase in standard of living. Apparently, Thaksin was the only one tough enough to implement even unpopular policies. He first re-energized exports, but this time, with the much-needed technology to support it. In fact, Thaksin launched his country’s own communications satellite system because he believes Thailand doesn’t need to rent from satellites owned by other countries. Transnational companies started coming in when Thailand privatized 15 of its large state-run companies. The government reached out to the 1.2 million slum dwellers by implementing a number of projects. More importantly, at the onset, the Thai government launched a massive information campaign on population control, and backed it up with very specific and exacting legislation. That is why today, Thailand can easily provide basic services and even free education to thousands of young students. To show that he is really serious, Thaksin launched a massive crackdown on corruption and illegal drug distribution in the country. Although this move raised a lot of eyebrows from human rights groups and the media, it appears that majority of the Thais are behind their leader. Thailand is at present enjoying an economic growth rate of 6.3 percent, and a “very conservative” 19 percent growth rate in exports. As of June 2003, Thailand’s reserves stand at a healthy 40 billion US dollars. In fact, this month, the Thai government is expected “to pay up all of its IMF loans two years ahead of schedule.” Today, Bangkok is a busy metropolis whose corporate skyline and skyways can match some of the best in the world. It’s resorts and tourist spots are some of the most visited in the region, making Thailand today a major tourist destination in Asia.

Not too many people are aware that Prime Minister Thaksin was a police officer for 14 years before he became one of the most successful businessmen in Thailand. His family in Chiang Mai was in the silk business for over 50 years. At 16, he was already managing the family’s string of movie theaters. Thaksin was the top graduate of the Police Pre-Cadet School Class 26 in 1973. Eventually, he went to the United States to earn a Master’s degree in Criminal Justice at the Eastern Kentucky University, and a PhD in Criminal Justice at Sam Houston State University. His first serious business venture was in telecommunications, which later grew into the cellular phone business and Advanced Info Service Company, which now has the largest customer base in Thailand. Before Thaksin became Prime Minister, many opposition groups tried to pin corruption charges against him, but they did not succeed. The motto he picked up at the police academy says it all about Thaksin: “Better to die than to live like a loser.”

Many foreign analysts are saying that the Philippines has all the ingredients and natural resources to progress like Thailand, perhaps even better. But at the end of the day, it all boils down to political will, and effectively managing more serious issues like uncontrolled population growth and an ever-increasing level of poverty. The other day, I had a breakfast business meeting with Gabby Lopez, chairman of ABS-CBN, and he was telling me that in an investor’s forum he attended recently, investors were lining up at the Thailand Booth while the Philippine Booth was “nilalangaw.” We both felt it was pathetic because while most Asian countries are surpassing us, here we are in a critical state and still doing a lot of political bullshit. Is politics really going to solve our problems? Instead of using all our energies and look for a strong leader with the kind of political will to get us out of this rot, here we are speculating whether GMA will run or not, filing more cases against Danding Cojuangco, trying to put Ping Lacson behind bars, attempting to put down Noli de Castro and Raul Roco. Are we saying that none of them are capable of solving this ballooning 110 billion-dollar national debt, and potentially in less than 10 years, 100 million people with more poverty staring at us? 

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