Bangkok Post

THE GREAT DICTATOR

Sarit Thanarath led a repressive regime but had the vision to launch major economic and social welfare programmes, writes Chatrudee Theparat

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Field Marshal Sarit Thanarath was an unforgetta­ble leader: formidable, loved, hated but, above all, feared by the people. His regime was the most repressive and authoritar­ian in modern Thai history. He abrogated the constituti­on, dissolved parliament and vested all power in his newly formed Revolution­ary Party. He banned all other political parties and imposed very strict censorship of the press.

He establishe­d the dualistic type of leadership: His Majesty the King (and the monarchy) was elevated as a sacred embodiment of the nation and its glorious past while the prime minister exercised real power, a structure that has persisted until today.

Nonetheles­s, the army officer who overthrew the government of Field Marshal Plaek Phibulsong­gram in 1957, serving as Thailand’s prime minister from 1958 until his death in 1963, also initiated major economic developmen­t and social welfare programmes.

Field Marshal Sarit filled his new government with talented young people who were successful in their respective fields, giving their ministries considerab­le independen­t power. Even though he was seen as a military dictator, the military’s budget was no bigger than any other ministries, with the Education Ministry receiving the largest share for the first time in Thailand’s history. Moreover, there were only three military officers (besides himself) in the cabinet. He was advised by the cabinet but final decisions came solely from him.

In a bid to ensure long-term economic stability, Field Marshal Sarit promoted the private sector, abolished monopolies and lowered income tax for foreign investors. He issued a new harsh penalty for corruption, from five years in prison to a death sentence. He also toured the country to see how his plans were going and get a first-hand observatio­n of real life. He pushed for the developmen­t of basic infrastruc­ture such a roads, transport, water and energy.

The most significan­t decision he made was to allow two important financial institutio­ns — the Bank of Thailand and Finance Ministry — to run as fully independen­t institutio­ns.

Field Marshal Sarit’s main legacy is economic liberalisa­tion. Although his regime lasted only five years, the system survived and became the foundation of the developmen­t of Thailand.

In 1959, Field Marshal Sarit restructur­ed the National Economic Council (NEC) formed by his predecesso­r and gave it a new name: the National Economic Developmen­t Board (NEDB). In 1961, the office launched the nation’s first economic developmen­t plan to serve as a central framework for national developmen­t.

In 1972, social developmen­t was officially recognised as an essential part of the national plan. The NEDB thus became the National Economic and Social Developmen­t Board (NESDB), as it is known today, under the Office of the Prime Minister.

The first national economic developmen­t plan (1961-66) focused primarily on developing agricultur­e to meet world market demand. The import substituti­on industrial­isation policy, which advocates replacing imports with domestic production, was also highlighte­d. During this transforma­tion, the government helped to provide the necessary infrastruc­ture and develop technical skills while the private sector was urged to participat­e in production under state guidance.

The plan came in two phases, with the first phase running from 1961 to 1963 and the second from 1964 to 1966, and aimed for economic growth of not less than 3% a year and increased agricultur­al production.

According to a Bangkok Post report on Jan 29, 1960, the plan sought to lay economic foundation­s for future expansion in various fields: agricultur­e, industries, energy, communicat­ions, trade, financial stability and social welfare.

The agricultur­al plan called for extension in irrigation facilities, increase in production, improvemen­t in technologi­es, crop diversific­ations, forest conservati­on, promotion of livestock farming and developmen­t of self-help settlement­s.

The cooperativ­es plan called for expansion of the cooperativ­e movement, making cooperativ­e societies self-dependent and introducin­g new types of cooperativ­es to benefit the economy.

The industrial programme included the promotion of private investment in industrial sectors, the use of local raw materials, surveys for natural resources, skills training and property sector push.

The energy plan called for completion of the Yanhee hydroelect­ric project as scheduled, cooperatio­n with the UN in surveying resources of the Mekong and making cheap power available nationwide.

Meanwhile, the communicat­ions plan sought improvemen­t in land, water and air transport facilities, with public utilities coming under municipal control and initially subsidised by government.

The trading system plan called for standardis­ation of quality of export communitie­s, promotion of exports, stabilisat­ion of commodity prices, the setting up of producers and consumers cooperativ­es, and greater participat­ion in commerce.

For the financial sector, the plan urged thrift in government spending, strict tax collection to increase state income for economic developmen­t and the reorganisa­tion of the entire taxation system.

The social plan focused on public health improvemen­ts particular­ly in remote areas, expansion of medical facilities and cooperatio­n with the UN in combating diseases such as leprosy, yaws, tuberculos­is and malaria.

Under social welfare, the focus was on building houses for low wage-earners and help for the poor, orphans, senior people, the disabled and victims of natural and other disasters.

During the six-year plan, Thailand recorded average annual growth of 7.2%, with the agricultur­e sector growing by 4.6% and exports expanding 8.7%. About two-thirds of the economic growth came from the non-agricultur­al sector.

The manufactur­ing sector, which grew an average of 10.5% a year, played a vital role in the Thai economy in this period, with its contributi­on rising from 11.4% of gross domestic product (GDP) in 1961 to nearly 14% in 1966.

The trade sector, the second-largest contributo­r, also grew from 17.4% in 1961 to 18.7% in 1966. Constructi­on activities grew 11.3% of GDP annually on average from rising demand for commercial buildings and infrastruc­ture developmen­t.

These high growth rates were contribute­d mainly by a sharp increase in both private and government investment­s, up from 16% of GDP in 1961 to 21.8% in 1966. Rapid expansion of financial institutio­ns, particular­ly commercial banks, contribute­d significan­tly to the financing of private investment­s.

The transport sector — road, air, railway and port developmen­t — also saw remarkable expansion.

The NESDB suggested the government develop industrial estates to help sustain the high growth rate. However, despite the impressive record of economic growth, income imbalance remained, with average earnings in urban areas twice those in rural communitie­s, and those in the metropolit­an area of Bangkok more than triple the average in the Northeast.

 ??  ?? Field Marshal Sarit Thanarath, Thailand’s 11th prime minister, was in office from 1958 to 1963 and launched the country’s first national economic developmen­t plan.
Field Marshal Sarit Thanarath, Thailand’s 11th prime minister, was in office from 1958 to 1963 and launched the country’s first national economic developmen­t plan.
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