A Trojan horse in Thailand · 9 januari 1998

The feared Asian tiger turned out to be a Siamese cat begging for scraps at the back door. Last summer, Thailand was the first in a row of East Asian countries where the economic bubble burst.
The country went bankrupt.

The tale is told, a long series of bankruptcies followed. Prices went through the roof and unemployment approached two million. The middle class, grown used to a western lifestyle, tumbled into poverty. The poor, more than half of the population, hit rock bottom. The street children from the area around the Hua Lamphong train station in Bangkok, who used live off of travelers’ left overs, now go hungry, simply because there aren’t any left overs anymore. The government along with the International Monetary Fund is trying to reorganize the inventory, to open up all doors to the free market. With the borrowed dollars mainly foreign creditors are being soothed.

The growing army of unemployed are told that ‘they have to sacrifice themselves for the economy’. There is little else for them to do but to return to the rural areas where the poverty is just as bad. The influential economist Dr. Walden Bello warns that the end result of globalisation will be that the country changes into an economical feeding ground for American capital, in which large groups will end up in never ending poverty within a marginalized culture.

“These are the consequences of a market that steers the society. But people have a right to a human existence. That is why the market has to be thoroughly checked and regulated.” Foreign investors didn’t know how quickly they had to withdraw their billions, as it became clear after the first bankruptcies that the Thai banks had invested the dollars in irresponsible property projects and risky speculations, this caused hyperinflation of property instead of increasing productivity. The low productivity and high dollar exchange rate undermined their competitive position. An increasing deficiency in their balance of payments was the result.

Due to foreign currencies flowing out of the country, as interests on borrowed dollars, the steady exchange rate between the bath and the dollar couldn’t be maintained. The national currency,the bath, lost half of it’s value in a short time. The original cost of their dollar debts became twice as expensive. The ability to pay off businesses, financial institutions and the government came under pressure. Numerous banks had to close their doors, more and more businesses went bankrupt from one day in to the next day.

Successful businesses saw their change to sack expensive and troublesome staff according to the credo of profitmaximalising. Par Garment, a textile business which among other things produces clothes for Nike, dumped from one day into the next day, five hundred female employees under the cloak of the economic crisis. The work is being contracted to home workers and small seam-workshops.

After the start of the crisis the government of prime minister Chuan Leekpai agreed to all of the wishes of the IMF, in exchange for seventeen billion dollars support. Wishes that met the American recipe of demolition all trade barriers, withdrawl of the government and the reorganization of the financial sector, in an attempt to bring back the foreign capital as soon as possible.

This is bringing a Trojan horse within Thailand’s walls, thinks Walden Bello, Fillipine economist, professor of sociology at the university of the Filippines and head of Focus on the Global South, a political research project at the Chulalongkorn University in Bangkok. Professor Bello is the author of a library full of books about north-south relations and a support for several non-governmental organizations in the region. “The Americans now manage to realize what they’ve tried to do over the last fifteen years, that is, opening up the Asian markets for American products and capital.

This is, after the fall of the communism, the second biggest step on the road to globalisation, according to the American model. They make it clear to the world that there is only one way to capitalism and that’s the model of the governments withdrawl.’‘

Bello talks in the serene Buddhamonthon-park full with waterworks, bamboo bushes and meditation halls, which were built in the fifties for the occasion of celebration of Buddha’s 2500th birthday, ten or more kilometers away from the capital, made as a refuge for Buddhists. Meanwhile, ever expanding Bangkok has nearly engulfed the four square kilometer park.

Bello warns for the so-called “ blessings of the free market”. ,,Globalisation means by definition pull down the barriers between the markets, free movement of capital and products, but in reality it means an open door to capital owned by the big multinationals.
Globalisation is a process that’s being led by American economical and political interest. It’s important to realize that the government of the United States is playing a crucial role. Often it’s the American government who takes the lead in pushing the economic initiatives.

In the 1980’s the IMF and the World Bank began forcing countries in Latin America and Africa, which where in crisis, to open their markets and to stop subsidies on local products. These two institutions are little more than an extension of the American government. Reagan carried out similar in the U.S. Social benefits were driven down, an end was brought to the culture of compromise enjoyed by both employers and employees, who were responsible for stability during the post-war period.’‘

To break open the state-led Asian economies is , according to the Filipino economist, the most important agenda point in American foreign policy. “Here in Asia the state has always purposely interfered with their economies. To protect local markets tariffs were used against the multinationals. In that way their own industries could become established. There developed a wealthy industrial elite. What has now happened the specialists didn’t foresee.

Even South Korea, that recently acted as a glorious example of the newly industrialized countries, had to borrow billions from the IMF. The agenda is now being dictated by the US minister of Finance, Rubin and the foreign secretary Albright. And that agenda is simple. Privatize, abolition of regulations, and to push back the government. In other words copy the economic model of America and open your doors to American capital. The battle between Asian – and American capital was won by the Americans. Especially now that Japan has serious problems, one can say that the Asian miracle has finished.’‘

A miracle is more beautifull in a tropical paradise. In Thailand the trees, that seemed to grow up into heaven for ten years, are being transformed in numerous skyscrapers, now of which most are empty and often unfinished. With a yearly economic growth of seven to ten percent, the country with the smile seemed to concur a place with the Newly Industrialised Countries.

Thailand, the world’s largest rice exporter, switched over to industry, ‘low-paid activity’ like textiles and cheap plastic toys had to make way for eminent industry. Japanese and Korean concerns builded car- and electronic factories. In 1992 the army, that directly or indirectly had always had the power, smothered student protests in blood, disappeared backstage and made room for a series of civil governements. None the less, the military left their marks if only to protect their
economic interests.

From the outside it seemed that Thailand was a democratic country, with different political parties and elections. The reality was that the governement was formed every time by a small group of former generals and big men from trade and industry, who ran the country in an authoritarian way. Votes were bought openly en masse by representatives of the politicians and the governement shared out favors between befriended business and financial institutions.

Reckless behaviour by the banks was the result. The gigantic bureaucracy, that swallowed half of the yearly budget, is corrupt from head to toe. Foreign investors saw the chance to quickly earn a lot of money thanks to the economic miracle and billions poured into the country. A prosperous middleclass grew comparable with their western counterparts. Thailand became the largest importer of Mercedess cars outside of the European Union, inspite of the high import-taxes.

Lifestyle.

To embrace the western lifestyle is, according to Bello, an important cultural element of globalisation. ,,The philosophy behind it is that the aspiration of the individual for profit is the driving force which will benefit the whole community. Therefore the economical system has to above all look after the interests of consumers. The consumer’s lifestyle in the west is seen as the ideal. Buy your happiness with a car, television and a grand house; the American middleclass dream from the fifties and sixties. Within this the electronic media play an important role. The otherside of this is that the political and economic systems that are not able to deliver an american lifestyle are rejected. This even played a part in the collaps of the Eastern Block.’‘

The free market is, according to Bello, linked with a formal democracy. ,,The era when the Americans saw the totalitarian regimes as trustworthy partners has gone. The system of a formal democracy within which ,in theory, all citizens are equal, is more stable. ‘’

,, Look at the Fillipins where Aquino, and after her Ramos, in the name of democracy have succeeded in keeping intact the most unjust society in Asia. This system is being legitamized by elections, manipulated by money and power. The citizens aren’t equal because property is never brought up for discussion. On the contrary, this falce democracy creates a radical inequality.’‘

In Thailand this inequality is so poignantly visible. Sixty percent of the population live in poverty. Thailand is global top five of countries with the greatest contrast between rich and poor. By changing from subsitence farming to large-scale export production, hunger and poverty developed in the province. In the end the farmers, who were only allowed to plant rice for export, suddenly found themselves buying food. The prices which were payed by the merchants were very small because the profit had to lift the country up in the speed of the people. With the same merchants the farmers had to pay enormous amounts for fertilizers and pesticides which were necessary for the monoculture. Millions of farmers left the countryside to go to Bangkok, in the hope of becoming a labourer. Usually that was an illusion.

Bello thinks that the freemarket will make the situation in the rural areas even worse. ,,The United States handels the freemarket very pragmatically. Since the last GATT-WTO agreement quota’s and tariffs on farmproduce no longer exist. Due to their previous protection farmers in this region still could produce rice.

The production costs of rice from California are much lower. This is because the American governement gives enormous subsidies to their farmers. Actually it’s a socialist system; the farmers get up to 25,000 dollar on top of the income. According to the GATT agreement. This is not illegal, because the income compensation wouldn’t influence the market. And then I’m even not mentioning the enormous amounts of money that the American governement spends on irrigation projects, that are necessary to make it possible to grow rice. In Thailand the farmers don’t get anything at all, they can never be competitive. This free market is in fact not free at all. It maintains the dominant position of the west. The ministry of agricultural in the US says that the American agriculture needs the Asian market to survive, that the export has to grow from forty to sixty percent. With this they will drive away Thailand’s farmers from their land. This is a tragedy in a country without a social safety net. Eventually they end up in the slums of Bangkok.’‘

Tragedy

A tragedy happens in front of the gates of the textiel manufacturer Par Garment. A dozen women sit together on rough wooden pallets. On the pavement at the side of a highway outside the capital. Six rows of never ending traffic jams crawl along beside the little plastic shed that has to give the women some shelter. Maybe it protects them from the rain, but not from the stinking exhaust fumes and the overwhelming roar of thousands of cars.
These women were recruted ten, fifteen years ago to go to the big city and earn money. They left their villages in the poor north-east and ended up behind the sewing machines producing clothes which lay in the shops in the west under the names Nike, Old Navy or the Gap.

At the end of october the women were met one morning by a closed gate. The management said that because of the economic crisis they were forced to close the business. Nonsense said the union, the business is still doing excellent trade.
Some of the five hundred employees didn’t put up with it and sat themselves down on the pavement. In spite of intimidations and rotten eggs which fly regularly over the wall, they still sit there. Even though they know they won’t get their jobs back. One of them, let’s call her Moo, explains why. ,,We sit here out of protest and we will sit here until at least I get the money which I have the right to. They must give us back the five hundred bath which we had to give as a garantee for the insurance. Also they haven’t paid our overtime and extra allowances.’‘

The working conditions at Par Garment were as with most businesses in the region, very miserable. A day’s wages of less than the minimumwage of 128 bath, forced overtime often untill midnight which wasn’t paid for, no paid leave or sick leave and reoccuring intimidations and sexual abuse.
The unorganised young girls from the remote agricultural north-east where no opposition to the management. However, little girls grow up and a few years ago the Par Garment Trade Union was formed.

Gnashing their teeth the management had to look on how the employees joined the Union. The organisation demanded and got the minimum wage and payment of overtime. But at the beginning if a new negotiation last September the head showed fight.

On a list with demands among other things there was asked for payed leave and Par Garment
office space for the union. The business reacted with a ukase in wich all demands were turned down. In passing they suspended the busservice which the employees used and the payment of achievement bonusses. Alongside this there were threats of hard measures against anyone who joined the protests or who endangered the production.

All this to disrupt the relations between the employees according to Moo. ,,It was clear that they tried to make work impossible for us. At the agreed times for negociation they didn’t turn up, except that time when they threatened the members of the union with violence and redundancy.’‘

After a month of squabbeling on the 27th of october, the personel were refused entry. The reason why was clear according to Moo. ,,Following an earlier agreement with the union wages were shortly going to be raised to 170 bath a day. They just wanted to get rid of us because we were becoming to expensive and because we are members of the union. The work now goes to numerous little workshops and homeworkers. There even stood for quite some time a big board in front of the gate on wich workshops were asked for. We’ve got papers wich prove that the business makes enough profit, but obviously they want to earn more.’‘

To get some ideas; a homeworker earns five bath for sewing together a pair of trousers. Another share of the production goes to subsidary companies Par Consortium and Monthinee Garment, which are situated far from the capital in the province. ,,The employees aren’t organised there and get paid less than the minimum wage. We protested in front of the gates of Monthinee at Nakhorn Rachasima and told the women who worked there what was going on. We hope for solidarity.’‘

In the first weeks there was a lot of solidarity with the women on the pavement. Regular groups of employees from other businesses came and heartened their unfortunate colleagues. After a few months however the groups stopped coming and the number of women that camped in front of the gates declined rapedly. The forty, fifty women who still sleep on the wooden pallets are only visited by members of the NGO Friend of Women, who bring some rice and vegetables.

Moo understands this. ,,The ones who are married have to move on. We’ve got nothing left. I live her now. I’ve got a bag with a few things. Because I couldn’t pay the rent anymore, they put me out on the street. We can forget about other work, we are to old and now we are on a black list because of the union. Eventually my only option will be to return to my village.’‘

A government appointed go-between said to the women that they had to sacrifice themselves for the economy. The girls who stayed behind in the vilagges at the time, are all maried and have got a small patch of land. Moo and the other women haven’t got any savings or land. ,,We didn’t earn enough to get married decently. The bit of money that we saved up in those years we sent home. At home there are no ways for us to earn any money. For our families we are an extra mouth to feed, whilst due to the rise in prices there is almost nothing te eat.’‘

It is not only the poverty that worries her, she admits. ,,When all of a sudden a number of unmarried women of my age, thirty five, who have lived for fifteen years in the big city come back in the village, it is threatening. The people there live a very different life. There are no unmarried men left over.’‘

The Gap and Old Navy build up an image in their own country of being businesses with a social face. They form part of a group of trendsetters which says to live up to international agreements for people’s rights and workingconditions in the factories and to demand the same of their subcontractors; ‘Corporation with Business EtHics’.
Hollow words according to Walden Bello. ,,These are the consequences of a system where in the market directs the society. The urge to maximise profits destroys lives. Society has to controle the market, even though this leads to lower efficiency. The foundation of human activity should not be competition, but cooperation. People have a right to a social safety net, an human existence that should not depend upon their productivity. The same applies to the environment. If we let the market go free, eventually it will destroy the environment and with that the foundation of all social activity. From a holistic point of view, markets work very irrationally. The market is a human institution that has to be regulated and controlled.’‘

Bello sees plenty of resistance against globalisation. ,,Elections in France and protests in Germany have shown that the people are fed up with the free market and Thatcherisme. Europe can’t just copy the American economic model without further instability. The benefit of market protection and the compromiss cultur between employees and employers is clear. But I wonder if the European social market model will last. Also Japan is under big pressure.’‘

Another form of resistence Bello sees is Islamitic fundamentalism. ,,Partly the rising of the fundamentalism is to be explained to be a protest agains globalisation which pushes for the creation of a uniform culture. They hark back to their roots and traditional values, because they feel that their own identity and their unique society is being marginalised.’‘

The resistance of the south-east Asian leaders has collapsed, Bello thinks. ,,Who served in the first place to protect the interest of the elite. They opened their markets selectively. It was allowed to invest, but so-called Asian values had to be maintained. Asians would prefer hierarchy and consensus than democracy. Bull shit ofcourse. The history of our society is a continous growth of democracy. That story has served only one purpose, which is to stay in power. They don’t get their inspiration from Asian philosophers like Confusius, but from people like Thomas Hubbs, the champion of authoratarian conservatisme.’‘

It was only after a couple of months that Chuan Leekpai called in the IMF, Bello’s prediction came true. ,,The governement made it possible for foreigners to become one hundred percent owners of Tai businesses. Until recently the maximum was half of the shares to be in the hands of foreign investers. A flock of vultures is circeling above Bangkok, who all want a bargain. Now it is also possible for them to buy land. Now it is only possible for them to buy property. In korea you see the same things happening.’‘

Bello knows a way to prevent south-east Asia becoming a conquered country of the US and Europe. ,,The money from the IMF has to be used to pay of legitimed debts and not to compensate loses of investors who made stupid investments, who have after all a duel responsibility for the crisis. Along site this, foreign investments have to be restrained. The international capital market is already a hundred times larger than their underlying economics. That sort of money is always on the look for a short term profit and disappears as quickly as it arrives. Which destablizes the complete economy. It will be good if the plans to raise taxes on international speculations go through.’‘

More important are the changes in the home politics, Bello thinks. ,,Don’t build on foreign investments, let’s make use of our own means. An economic growth of ten precent is an idiotic ambition. The country has to produce for its own market, even if import is cheaper. The governement should bring in a progressive taxsystem to achieve a levelling out of incomes and a reformation of the country. Although a formal democracy is a progression compared with an authoritarian system, it is only one step forwards. We have got to go to a true democracy in which the people control the state.

The system has lost its identity. NGO’s and other movements that promote development, the grassroot level, will have to grab their changes and demand a keyrole. But it is not only about political and economical reforms. It’s also about an inner reform, where by we reflect upon our needs with moral and intellectual integrity. When we discover the treasures within ourselves and lead a rich emotional, intellectual and spiritual life, we don’t need to derive our values from posessions and status.’‘

However for the time being, far away the noise of the traffic on the motorways is a sound that encloses Buddhamonthon-park. From a far it sounds like the roaring of a tiger.

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