BARRON’S, ASIA – Last month, I took George Orwell’s advice and visited Thailand. A driving principle of the late, great “Nineteen Eighty-Four” scribe was that journalists not waste time covering huge conferences, but instead visit places most affected by what those summits aim to accomplish.
In that spirit, I forwent the Group of 20 confab in Hangzhou, China and kicked Bangkok’s tires to gauge the populist backlash sweeping the globe. In the space of four months, those currents put Britain outside the European Union, strongman Rodrigo Duterte in charge of the Philippines and bullyboy Donald Trump within striking distance of the White House.
Thailand got there first, in many ways. Beginning with the 2001-2006 prime-ministership of Thaksin Shinawatra, a brash billionaire-turned-politician and culminating in a 2014 coup, Thai angst front-ran the anti-elite backlashes shaking up governments from Manila to Washington. Now, as revered King Bhumibol Adulyadej Adulyadej leaves the scene, the question is where Thais take this most unpredictable of political and economic phenomena.
This is a buckle-your-seatbelt moment for investors. It’s impossible to know how heir apparent Crown Prince Maha Vajiralongkorn might rule. Part of the disorientation is a draconian and ambiguous lese majeste code against offending the monarch, one that stops observers, journalists and investors from publically debating palace intrigue.
Thailand just lost its main shock-absorber. The wiry, bespectacled Bhumibol had been on the scene for 70 years, during which he observed more than two dozen prime ministers and 10 coups. Amid chaos, political jousting and tanks in the streets, Bhumibol was always there to swoop in at dire moments to keep peace in the nation of 68 million people. As two-time Prime Minister Anand Panyarachun put it in 2007: to the people, “the Thai monarchy is not an abstract or irrelevant concept, but a responsive, caring and indispensable institution that is an integral part of their lives.”
It’s hard to exaggerate how present the king was in everyday Thai life, even while largely out of sight these last five years in hospital. His framed photo and man-of-the-people ethos are omnipresent. Portraits in executive suites, restaurants and hotel lobbies show Bhumibol visiting poor villages, racing boats or meeting with foreign leaders. In 1960, he addressed a joint session of U.S. Congress during Dwight Eisenhower’s day and even got a ticker-tape parade in New York City. The Cambridge-born king was an engineer with patents in rainmaking and water treatment, a painter, a saxophone enthusiast who jammed with jazz great Benny Goodman and a tough act to follow.
Risks abound as the crown passes to the next generation. “Bhumibol,” Asia expert Joshua Kurlantzick wrote on the Council on Foreign Relations website, “positioned himself as a savior of the poor and as a bulwark against populist, communist movements that menaced much of Southeast Asia.”
So what now? Markets can expect a roughly 30-day cooling off period, during which time Prime Minister Gen. Prayut Chan-Ocha says things must be “toned down.” Yet as much as eyes are on the crown prince, they’re also on Prayut, whose policies are knocking the economy off its feet. As global growth, exports and investment slow, the junta is the proverbial deer-in-the-headlights.
That has this former Asian tiger looking over its shoulder as Vietnam and other upstarts catch up and vie for manufacturing jobs. And then there’s neighboring Myanmar, where Orwell worked as a cop in the 1920s, an experience that inspired “Burmese Days.” It’s winning investment that might’ve gone to Thailand if the generals had a plan to hold elections to restore democracy or upgrade the economy.
Even before Bhumibol’s death Thursday, the junta was settling in for a long stay. It’s laid out a vague and haphazard vision to achieve fully developed-nation status in 20 years. Unless the junta loosens its grip, overhauls the education system, spends more on infrastructure and cuts red tape, average households, particularly rural ones, will fall further behind and inequality will increase.
Stability is no longer enough. Since the 2006 coup that ousted populist Thaksin, a revolving door of prime ministers (including his baby sister Yingluck Shinawatra) put precedence on top-line growth rates and peace and order, not spreading the benefits of trade and commerce. Stagnant incomes are at the core of why many voters, be they in Bangkok, Manchester, Cebu or Atlanta, are so angry at the economic elites that they’re embracing the unknown.
While in Bangkok, I followed the chatter from the G-20 elites as they convened in Hangzhou. “We can’t ignore the fact that there’s sentiment out there which is anti-globalization,” said U.K. Prime Minister Theresa May. “We need to consider how, when we put these free trade arrangements in place, they’re actually going to benefit everybody.”
There are few better microcosms of these forces than Thailand. To turn things around, the junta should emulate Bhumibol and empower the people, not exploit populist energy, but fix the causes of anger nudging nations near and far toward Orwellian authoritarianism.
William Pesek, executive editor of Barron’s Asia, is based in Tokyo and writes on Asian economics, markets and politics. www.barronsasia.com