Thailand: The Politics of Continuity
Since the 1932 revolution when constitutional rule replaced the absolute monarchy, Thailand has intermittently experimented with democratic government. The Kingdom's most recent attempt began in June 1968 with the promulgation of the eighth post-revolution Constitution. The Constitution called for national elections, held on February 10, 1969, for the House of Representatives, the lower house in the bicameral legislature.' Under the leadership of Prime Minister Thanom Kittakachorn, the Thai government mobilized some 250,000 rural and urban officials and spent approximately 102 million baht ($5,100,000) in order to carry out the elections. The massive organizational effort resulted in elections which were considered by spokesmen for both government and opposition parties to be the most orderly and least corrupt in Thai history. Isolated incidents of double voting by military units, bribery, and ballot box stuffing were reported informally, yet only twelve nullification suits, a very small number of protests in comparison with past elections, were filed officially with the Minister of Interior. Although political parties had been banned since 1958, thirteen parties managed to organize, register and engage in campaigning. Of these, the pro-government United Thai People's Party (UTPP) and the opposition Democrat Party merit particular attention. The organizers of the UTPP were comprised of the persons in the most powerful political institutions of Thailand. In addition to the Prime Minister, Party leaders included the most prominent civilian and military cabinet members and the Army, Navy, and Air Force Commanders-in-Chief. At election rallies in the Kingdom's 71 provincial constituencies, the UTPP candidates stressed: 1) the need for strong centralized leadership to ensure continued stability in the Kingdom; 2) the ability of the existing military regime to meet the dangers of Communism; 3) the success of the government's economic development program; and 4) the advantages UTPP candidates would have in terms of access to government funds for local development projects. The Democrat Party, the oldest and most influential of the opposition parties, was led by former Prime Minister Seni Pramoj. In contrast to the UTPP which was able to field a full slate of 219 candidates, the Democrat
Thailand's New Course
THERE IS A NEW flexibility in Thai politics, both external and internal. The reason for this is clearly to bring Thailand more into line with changing conditions. The previous policy suited its times, at least from the point of view of a military-dominated, security-conscious, conservatively-inclined regime. There was then a community of interest between Thai governments headed by Field Marshals Phibun Songkram (i948-57), Sarit Thanarat (i958-63), and Thanom Kittikachorn (from i963) and successive United States administrations, whether Republican or Democratic. This was reflected in U.S. commitments: mutual security (military and economic aid) in 1950; Seato membership in 1954; and the Dean Rusk-Thanat Khoman joint statement in i962 of the U.S. obligation to help Thailand, regardless of the attitude of other Seato members, "in case of Communist armed attack." The Thai-American alliance was extended to the full by President Johnson's massive intervention in Vietnam. It was shown by American use of Thai bases, at first not openly acknowledged by the Thais, to bomb North Vietnam and Communist-held areas of Laos. (The previous extreme of Thai commitment had been Phibun's war-time collaboration with the Japanese, admittedly as a result of force majeure; this "alliance" collapsed in 1944, Phibun's downfall coinciding with Japan's decline.) Thus Johnson's dramatic reversal of his Vietnam policy in i968-from the confident expectation of military success, revealed in General Westmoreland's "Four Phase" plan, to the acceptance of peace talks with the enemy'-presented the Thai leaders with an entirely new situation. First, over the next few years the Thais face the prospects of United States disengagement from Vietnam and perhaps from mainland Southeast Asia. The current "de-escalation" of the Vietnam war cannot make sense unless it is seen as part of a policy of withdrawal (the alternative, resuming bombing the North and sending thousands more soldiers to bolster the South, is no longer feasible). Yet President Nixon has no more than two or three years in which to carry out a substantial military disengagement-presumably as a result of a settlement of sorts-if he is to make a good showing at the next presidential elections. Next, there is the possibility of instability in Vietnam.
Financial Policy in Postwar Thailand: External Equilibrium and Domestic Development
Thailand, perhaps more than any other country, has been able to achieve rapid and substantial growth without inflation since World War II. Blessed with huge rice crops in a world hungry for rice, Thailand's astute money managers were able to restore order quickly-and with less inflation, as measured by wholesale prices, than the United States had for the two decades following the war. Of course, the strong preferences of the Thai people for their own consumer products, and later on the receipt of foreign aid, were also helpful in maintaining convertibility and a stable price level. Taking as a frame of reference the relationship between equilibrium in the balance of payments and domestic economic growth, this article will examine the role of financial policy in Thailand since World War II. Certain of the financial problems which Thailand has faced during the last twenty years are those which perplex many other underdeveloped countries today. They may be considered in terms of three highly interrelated areas: government expenditures and revenues, the monetary system, and the balance of payments. One such problem is that of obtaining the revenues with which to finance the governmental expenditures determined by the political leadership. The major sources are taxes, public bonds, foreign, loans and grants, and domestic credit creation-the naive version of which is printing paper currency, the sophisticated variant being government borrowing directly or indirectly from the central bank. It is hard to make extensive use of the credit-creation mechanism without generating domestic inflation. The establishment of an effective monetary system has both narrow and broad dimensions. In the narrow sense there are two problems: (1) developing a unified, efficient, and elastic money supply; and (2) controlling the money supply as an instrument of monetary policy. Both are prime functions of the central bank. Many underdeveloped countries today have solved at least the first problem reasonably well. For Thailand in the postwar years, however, a major objective of economic policy was to put the currency system in order once more. The broad dimension of an effective monetary system is the development