International Implications of Thailand’s Internal Squabble

As the world watches the unfolding events in Thailand with unease as pro and anti-Thaksin forces take their protests to the streets of Bangkok, unsettled and unsettling questions are arising over the international implications of the struggle.

Questions of the contest for primacy between the two opposing camps have simmered for the best part of a decade, costing dozens, perhaps hundreds of lives, giving reason to expect more lives will be lost.

Tension will continue to rise in the coming weeks as forces favoring autocracy take steps to stop the election called by Prime Minister Yingluck Shinawatra and set for Feb. 2.Thousands of protesters as the New Year got underway were expected to attempt to block roads in as many as 20 commercial zones, in an echo of the Yellow Shirt protests of 2008 through 2010 to increase the heat on the government to cancel the election. The matter is unlikely to be settled either way whether or not the election goes ahead, not least because there is some popular support, albeit a minority, for autocracy.

All of this matters internationally because of trade and geography. Despite Yingluck’s call for elections, the royalist opposition is showing no intention of allowing the polls to go forward.

Although Thailand had already been an FDI magnet for a decade, ir threw its doors open to foreign investment in the wake of the Asian Financial Crisis, streamlining its banking and investment laws, cutting corporate taxes and providing one of Asia’s most attractive investment climates. Accordingly, from 2010 to 2010, accumulated FDI grew from US$118 billion to US$159 billion, by far the biggest FDI inflows in Southeast Asia and making the country the center of foreign manufacturing..

Thailand is a major exporter of disk drives, car parts and cars, rice, rubber and tourism, among other things. Heavy floods during 2011 knocked out production and transportation causing ripples through global supply chains and markets. The floods revealed Thailand’s critical position in the global division of labour. Similar shocks can be expected should the conflict widen, increasing costs, hitting labor and interrupting exports.

Political and environmental threats to business should give investors pause to consider building factories and placing orders elsewhere in Southeast Asia. Trouble in Thailand perversely may be positive for neighbors hungry for investors and tourists.

Trouble may also create new cross-border interests. The territorial basis to the two main sides in the dispute in Thailand overlaps with understated cultural and ethnic identities. The languages of Lanna and Isarn, both spoken in northern and northeastern Thailand, are closer to each other than they are the Khmeru-Thai imposed nationally by Bangkok as standard Thai.

Moreover, the languages of Lanna and Isarn are shared with millions in Laos, Myanmar’s Shan State, and China’s south Yunnan. Ties are close. Foods and festivals differ little across the borders. Shared languages and cultures have fostered trade. Weapons for instance have been sold from Lanna to the guerrilla armies of Shan State for decades.

If peace holds in Myanmar while matters deteriorate in Thailand, new markets for weapons may emerge along with anything else needed by a conflict economy. War can be good for business. Entrepreneurs and traders on either side of the frontiers of Lanna and Isarn are unlikely to stand aside.

Politics across the borders could also take a hit. Trouble in Thailand could revive dreams of autonomy and independence among the Shan. Meanwhile in Laos life is becoming harder, with civil servants unpaid for several months and prices rising fast. An unsettled Thailand would not help matters.

China and the United States also have concerns. Thailand falls within China’s sphere but under the American defense umbrella. China’s interests, investment and influence have risen markedly over the last decade or so. Meanwhile America seems determined to contain China.

A fight to answer the question over Thailand’s future may present an opportunity neither will be able to resist or avoid without potentially giving up a strategic advantage. Parties to the conflict within Thailand may in seeking the power to seize victory turn to outside powers for aid to tip the balance. China would welcome a Thailand leaning in its direction given America’s warming ties with Myanmar and Vietnam.

Thailand’s potential to upset stability in the Mekong as well as to damage global supply chains is reason for other countries to consider mediation. Difficult however to justify in light of elections over the last decade by-and-large judged free-and-fair by foreign observers. Mediators might be hard to find. The Association of Southeast Asian Nations holds a line of not participating in internal affairs.

That leaves great powers or neutrals like Norway. Efforts to stop war in Sri Lank and Syria do not inspire much hope however. It took several years, hundreds of air strikes and thousands of troops for the west to put an end to fighting in what was once Yugoslavia.

All of this is not to say that the situation in Thailand will go from bad to worse. For one thing regional identities are not that strong. That may not always be so, especially if talk of secession reignites. Still the country has muddled through for a long time and may well continue to do so.

On the other hand the stakes are such that the forces for autocracy might go for broke. If as in the past the army sides with them they may hold their ground. Thais in favour of electoral politics will face a hard choice of giving up or fighting. In which case, many may find that Thailand’s troubles are their troubles.

(David Fullbrook is a sustainability analyst and regular contributor to Asia Sentinel.)