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As Thailand's economy slowed in 2001, Thaksin Shinawatra, who became prime minister in January after his conservative party won a landslide election victory, launched populist programs aimed at helping poorer Thais and small businessmen. The Thai Loves Thai (TRT) party's near parliamentary majority, and Thaksin's financial clout as Thailand's wealthiest businessman arguably made him the country's strongest-ever civilian leader. Thailand's constitutional court cleared Thaksin, 52, of corruption charges in August, lifting political uncertainty but leading some Thais to question whether the court had bowed to public and political pressure. Reformist politicians and activists also feared that Thaksin's government would undermine economic and political reforms put into place to improve transparency and accountability in the wake of the financial crisis that began in 1997. They pointed, for example, to Thaksin's stated desire to reign in Thailand's new independent anticorruption agency.
Known as Siam until 1939, Thailand is the only Southeast Asian nation never colonized by a European country. Beginning with a 1932 coup that transformed the kingdom into a constitutional monarchy, the army ruled periodically for the next six decades. The army last seized power in 1991, when it overthrew a hugely corrupt elected government. After soldiers shot dead more than 50 pro-democracy protesters in Bangkok in March 1992, Thailand returned to civilian rule when the country's revered monarch, King Bhumibol Adulyadej, convinced the military to appoint a civilian prime minister.
Thailand's export-led economy grew by nearly ten percent per year on average in the decade prior to 1997. By then, years of heady expansion, poor bank supervision, and an increasingly overvalued currency pegged to the U.S. dollar had inflated asset prices, left companies saddled with $63 billion in foreign debt, and contributed to large current account deficits. When slowing exports and a weakening economy in 1997 punctured the asset bubble and eroded corporate profits, many companies were unable to pay their foreign and domestic debts and bank losses mounted.
After spending billions of dollars fruitlessly defending the baht against speculators, the government floated the currency in July 1997 and agreed in August to a $17.2 billion bailout led by the International Monetary Fund (IMF) and conditioned on financial austerity. As members of Bangkok's middle class protested against corruption and economic mismanagement, parliament approved a reformist constitution in September and in November elected the Democratic Party's Chuan Leekpai, a former prime minister with a clean reputation, to head a coalition government. The new constitution created independent elections and anticorruption bodies and introduced direct senate elections.
Hoping to stabilize the baht and reinvigorate the banking system, the Chuan government kept interest rates high and closed 56 ailing finance companies. The opposition blamed the tight monetary policy for pushing the economy into recession in 1998 and hurting farmers and other ordinary Thais. Thailand's economy shrank an estimated 7 to 8 percent in 1998 but rebounded in 1999, growing by 4.3 percent.
Criticizing the government for supposedly favoring the urban middle class over ordinary Thais, Thaksin, a former deputy prime minister, emerged as the leading challenger to Chuan in the spring of 2000 and then unseated him in the January 6, 2001, elections. During the campaign, Thaksin pledged to help poorer Thais hurt by the financial crisis by introducing cheap health care, a debt moratorium for farmers, and investment funds for each village. Providing evidence to support some of Thaksin's charges against the government, a July 2000 World Bank study said that Thailand's poorest workers continued to be hit the hardest in the aftermath of the crisis. They suffered from lower wages and higher unemployment. Thaksin, who built his fortune in telecommunications, also promised to set up a government agency to buy bad loans from banks. Chuan campaigned on his success in restoring economic growth and stabilizing the baht. Thailand's economy grew by 4.4 percent in 2000, and the baht remained well above its crisis lows despite sliding 13.5 percent against the dollar during the year.
Thaksin's TRT party won 248 out of parliament's 500 seats. It formed a coalition government with two other conservative parties--the Thai Nation Party, with 41 seats, and the New Aspiration Party, with 36--and the centrist National Development Party, with 29. Chuan's Democratic Party won 128 seats, with four smaller parties taking the remainder.
Thaksin's TRT won the elections despite a December 2000 ruling by Thailand's new National Counter Corruption Commission (NCCC) that Thaksin had deliberately falsified wealth disclosure statements as a cabinet minister in 1997. Had the constitutional court not cleared him, Thaksin could have been banned from holding office for five years.
Amid the distraction posed by Thaksin's court case, his government began providing one million baht ($22,000) to each of Thailand's 77,000 villages for small-scale loans and low-cost health care to Thais without medical insurance. It also set up an asset management company to take over some bad loans from banks. The government justified using public money to prop up banks on the grounds that many indebted firms continued to defy creditors even after the Chuan government had created a new bankruptcy court and passed tougher foreclosure laws. More than 40 percent of bank loans are classified as "distressed assets," according to an August 2001 IMF report. Late in the year economists were estimating that the economy would grow by one percent or less in 2001 amid plunging global demand for Thailand's electronics exports. Overall, exports make up around 65 percent of gross domestic product.
Thais can change their government through elections that are marred by fraud, irregularities, and some political killings. Thailand's overall human rights record is generally positive, but police often are implicated in wrongful killings and other abuses, business firms frequently violate labor laws, and prostitution and trafficking of women are widespread. Observers say that official corruption is widespread and linked to trafficking and other illicit acts.
As in previous elections, candidates doled out huge sums of money to buy votes in the January 2001 balloting. Politicians handed out to voters at least 20 billion baht ($465 million) during the campaign and on election day, according to Bangkok's Nakhon Ratchsima Rajabhat Institute, which monitors poll fraud. In 62 districts, the Election Commission either disqualified candidates or warned them about graft allegations and ordered second rounds of polling. The commission, however, took little or no action on many of the more than 1,000 allegations of fraud. Some critics suggested that Thaksin's party might have pressured commission members to overlook violations.
Observers gave varying accounts of the number of killings linked to the January elections. The Economist of London put the figure at 43, but the U.S. State Department's February 2001 report on Thailand's human rights record in 2000 said that violence related to the January general elections and 2000 senate vote had killed a total of 11 people. There is no evidence of government involvement in any of the killings.
Thailand's constitution vests executive power in a prime minister and his cabinet. The house of representatives has 400 single-member districts and 100 party-list seats, all directly elected for four-year terms. The senate has 200 members who are directly elected for six-year terms.
Anecdotal evidence suggests that ordinary Thais often must bribe bureaucrats to receive basic governmental services and that officials routinely take bribes to ignore many types of crime. "Routine demands for bribes undermine the rule of law and permit the continuation of various illegal activities such as income tax evasion, illegal gambling, drug violations, goods smuggling, trafficking in persons, and prostitution," according to the U.S. State Department report. The Berlin-based Transparency International's 2001 Corruption Perceptions Index ranked Thailand in a tie with Malawi for 61st place out of 91 countries. The top-ranked country, Finland, is considered the least corrupt. Moreover, more than 40 percent of gross domestic product is estimated to be underground.
In a positive development, the government's anti-money laundering agency has indicted many low level money launderers and ordered police to seize property and assets of many drug traffickers. The agency has acted under tough laws passed in 1999 that cover crimes ranging from white-collar fraud to prostitution.
Though "the judiciary generally is regarded as independent, it is subject to corruption and has a reputation for venality," the U.S. State Department report said. The judiciary also lacks a sufficient number of qualified judges and has huge case backlogs. Defendants generally receive adequate due process rights.
Thailand's poorly trained police frequently are implicated in wrongful killings and rights violations against criminal suspects and detainees. Officers at times kill armed drug traffickers and other criminal suspects while apprehending them. While police in some of these cases may be justified in using lethal force, at least some of the killings are unwarranted, according to nongovernmental organizations (NGOs) and the press. In addition, authorities have investigated officers accused of raping or extorting sex from female detainees. Police also reportedly beat some suspects to extract confessions, according to the U.S. State Department report. Thai prisons and immigration detention centers are severely overcrowded, and inmates generally lack proper medical care, the report added.
Thai newspapers freely criticize government policies and report allegations of official corruption and human rights abuses, but journalists exercise some self-censorship regarding the monarchy and national security issues. The Nation of Bangkok and some other dailies continued to criticize Thaksin's policies after he took office. The opposition Democratic Party, however, alleged that other papers might have toned down their criticism because of the advertisements they receive from state companies and Thaksin's Shin Corporation and its subsidiaries. Radio and television stations also generally offer diverse political views. The government or armed forces either directly or indirectly own or oversee most radio and broadcast television stations. By law, radio stations must renew their licenses annually. In a controversial move, the private iTV television station sacked 23 staff in February who complained that the station's election coverage had favored Thaksin. Shin Corporation is iTV's largest shareholder.
Bangkok's middle class and rural farmers frequently and freely hold rallies against government policies. Though not used in recent years, laws broadly prohibit verbally defaming the monarchy (lese majesty), inciting public disturbances, threatening national security, or insulting Buddhism. In addition, the constitution allows the government to restrict free expression on national security, public order, and other grounds.
Tens of thousands of Thai women and children work as prostitutes, many of them after being trafficked to cities from their villages. Authorities prosecute relatively few traffickers, and many police, soldiers, and local officials are involved in trafficking, the U.S. State Department report said. Some women, reportedly from hill tribes and neighboring countries, are forced into prostitution, the report added. In addition, many prostitutes work as bonded laborers in order to pay off loans made to their parents by brothel owners. Thailand has at least 200,000 prostitutes, according to NGO and government estimates.
Domestic violence is a serious problem, although rules of evidence make prosecuting offenders difficult and police do not vigorously enforce relevant laws, according to the U.S. State Department report. The report added that many women do not report domestic assault and rape, in part because "law enforcement agencies are widely perceived to be incapable of bringing perpetrators to justice." The government has taken some positive measures such as deploying teams of female police officers in some station houses to encourage women to report sexual crimes.
Women make up more than half of university graduates and are increasingly entering the professions. They continue, however, to face unofficial discrimination in hiring and wages, the State Department report said. Women also are underrepresented in politics, government, and senior civil service posts.
Thais of all faiths worship freely, with Buddhism having the most followers. Muslim Malays, who make up around ten percent of Thailand's population, face some private sector job discrimination, according to the U.S. State Department report. Roughly half of the 700,000 to 880,000 members of hill tribes reportedly lack citizenship. This leaves them ineligible to vote, own land, or be covered under labor laws and makes it harder for them to access education and health care. The government in 2000 eased the rules for hill tribe members to be eligible for and obtain citizenship, but it is not yet clear how many so-called highlanders have benefited from the changes.
In the workplace, employers often violate the country's poorly enforced labor laws, use child labor, and discriminate against union members and organizers. Press reports suggest that more than half of Thai workers, particularly those in rural areas, receive less than the minimum wage. NGOs say that upwards of one million Thai children work on family farms and that two to four percent of children between the ages of 6 and 14 work in urban jobs. Working conditions in private factories are often poor and dangerous. Moreover, Thailand reportedly has many forced-labor sweatshops in which employers prevent workers from leaving the premises, the U.S. State Department report said.
Employers reportedly discriminate against both union workers and those trying to set up new unions, according to the U.S. State Department report. Unions can bargain collectively, but in practice private sector employers enjoy considerable economic leverage and generally set wages unilaterally. Fewer than two percent of Thai workers are unionized. Strikes are legal in the private sector but not for state enterprise workers.
Maintaining its long-standing policy of harboring refugees fleeing conflict in neighboring Southeast Asian countries, the government provides in its border areas temporary asylum to some 120,000 Burmese refugees who in recent years fled fighting and gross human rights abuses. Authorities, however, have arrested as illegal aliens some Burmese living outside designated camps.