Corruption Is Strangling Thailand
Economic growth in yet another Asian country is being threatened by political corruption. In Thailand, where the relationship between making money and making public policy has always been close, the government of Banharn Silpa-archa has gone too far. In just one year of office, the Prime Minister has been plagued by banking scandals, defense contract kickbacks, and sharp criticism over the undermining of the Finance Ministry by corrupt political loyalists. One coalition partner has already quit the government, and a censure vote in Parliament is scheduled for Sept. 10. It may be time for the Prime Minister to consider stepping down to pave the way for a cleaner government.
The cost of Thailand's political corruption is high and rising. Frustrated foreign companies are rethinking their investments after submitting low bids only to see contracts go to the well-connected. Because of shortages of skilled workers, factories are going elsewhere in Asia. Exports are down. The stock market has dropped 13% since June, and the baht may tumble.
Thailand can't afford this kind of corruption. What it badly needs is to solve Bangkok's nightmarish traffic problems, thoroughly clean up its banking system, and adopt monetary policies made by technocrats to rein in the current-account deficit. Money lining the pockets of the powerful should be put into schools.
In the past, when civilian governments failed, the Thai military stepped in. With five coups d'etat in recent memory, the last in 1991, Banharn is asking for a repetition of history.