Adjusting to the 'new normal'

Before the attacks on the World Trade Centre, Americans believed their land was the safest from terrorism. Then, just as we in other parts of the world began assuming the United States was the sole target, al-Qaeda spread the war.

Now we have Islamic State wreaking havoc in the Middle East, forcing hundreds of thousands of people to migrate to Europe and elsewhere. The United Nations aims to resettle all the refugees within a year, but whether that ambitious goal can be achieved remains to be seen. Geopolitics – the study of how people and their location influence international politics and economics – has been around for some time but has suddenly taken on fresh significance.

On the economic front, we have witnessed equally huge changes over a relatively short period. Only since the end of World War II have developing countries received systematic financial help from their rich, industrialised counterparts, through the launch of the World Bank and the International Monetary Fund, followed by the Asian Development Bank and Japan International Cooperation Agency.

More recently, China has emerged out of nowhere to become the world’s second-largest economy. It is now the US government’s biggest creditor, with foreign reserves – mostly in the form of Treasuries – amounting to $3.6 trillion.

To date, Asian countries have financed infrastructure projects mainly by borrowing in US and European markets, but that is about to end as the China-led Asian Infrastructure Investment Bank swings into action.

In 2008, oil prices hit a record high of more than $160 a barrel, echoing the two major oil shocks decades before. In a dramatic reversal, we are now living in an era of sub-$50 oil.

Changes are also imminent on the environmental front, as efforts to combat climate change founder.

In our interconnected world, Thailand now feels the pinch of every major global event, which is exacerbated by the turmoil at home.

This is the two-pronged “new normal” that all Thais must learn to live with.

Unethical and self-serving behaviour by politicians is part of the picture  – witness for instance the shameless 2003 purchase of state land by the wife of then-prime minister Thaksin Shinawatra.

Three years later we introduced another new normal to the world, as Bangkokians presented flowers to soldiers and took “selfies” in front of tanks. 

The latest flip from surreal to real came on the ninth anniversary of the 2006 coup, when Saturday’s pro-democracy march from Thammasat University to Democracy Monument was given the green light by military authorities – who then refused to dismiss the possibility that the protest leaders could face charges for defying the junta’s ban on political gatherings.

In the meantime, while global institutions like the UN, the World Bank, IMF and ADB preach political and economic inclusiveness, Thailand has embarked on a path of reform planned and carried out by people handpicked by the junta. 

However, according to a National Institute Development Administration poll released at the weekend, the majority of Thais support the junta’s approach, including its reform road map and decision to delay elections.

But the dissenters remain vocal.  

Veerathai Santiprabhob, who will take over as Bank of Thailand governor next month, came under fire last week for reportedly telling a gathering at Harvard that reforms must come before elections. A day later, he was forced to issue a Facebook clarification, saying reform was a constant process but that under “abnormal political circumstance” the process could face limitations and unforeseen repercussions. 

In this respect, Thailand is about to witness a “new normal” in many different areas.

Former prime minister Yingluck Shinawatra is likely to face a bill of Bt500 billion in connection with her failed rice-pledging scheme. This despite there being no concrete evidence of how many tonnes of stockpiled rice were left to rot, or how much corruption was involved. If that bill turns out to be accurate, Yingluck will have to shoulder the entire cost of the scheme, including the sums pledged to farmers, which in past years boosted domestic demand and hence the Thai economy.

Few Thai politicians will now dare to launch such ambitious projects. The junta has been eager to award Thailand’s Bt400-billion rail project to China, and other routes to other nations – minus any bidding process. Needless to say, no elected government will have the courage to make such a move if its politicians are held liable for the full cost of the project.

Without new projects, where is the economy heading in light of new challenges?  

Last week, outgoing Bank of Thailand Governor Prasarn Trairatvorakul confirmed that the economy is facing a new normal. It consists of four elements: The slowdown in global trade, low inflation, increased financial connectivity and an ageing population. In this scenario, the economy is mainly under the influence of external factors that remain beyond our control. (Meanwhile certain internal factors are also beyond our control.)

According to a Tourism Authority of Thailand advert, Thais smile even when they are unhappy. But that’s not really true. Thais are just good at adjusting to change. That’s because they are secure in the knowledge that nothing is everlasting – including power over politics and the economy.