Socio-economic and political development
are interconnected
(Crisis of) economic development
(Crisis of) political development
Contact: Marc Saxer, marc@fes-thailand.org
Transformation crises around the world…
Philippines: 2000/01; Estrada, elected, ousted
Venezuela: 2001/02; Chavez, elected, government survived
Taiwan:
2004, 2006; Chen, elected, govt. survived, later convicted
Kyrgyzstan: 2005; Akayev, elected, ousted; 2010; Bakiyev, elected, ousted
Bangladesh: 2006/07; Zia, elected, govt. survived
Kenya:
2007; Kibaki, elected, govt. survived (intern. mediation)
Bolivia:
2008; Morales, elected, govt. survived
Georgia:
2007; Saakashvili, elected, govt. survived
Ukraine:
2004, 2013; Yunukovych, elected; ousted
Egypt:
2013; Morsi, elected, ousted
Turkey:
2013; Erdogan, elected, govt. survived
Brazil:
2014; Rouseff, elected, govt. survived
Thailand:
2006, 2008, 2013/14; Shinawatra I-III, elected, ousted
…show similar patterns
Contact: marc@fes-thailand.org
The “script” of transformation conflicts
1. Socio-economic development transforms societies. Emerging classes demand equal
participation in political and social life, leading to a crisis of the political order and a
crisis of social justice.
2. Clever political entrepreneurs realize that by catering to the hopes and needs of the
majority, they can build an electoral power base beyond traditional elite networks
3. Once elected, these leader become “elected autocrats”. Following the zero sum
winner-takes-it-all logic of patrimonial culture, they reward supporters, protect clients,
distribute spoils, favor kin, cut out non-supporters and crush their opponents.
4. From the perspective of the middle class in the capital, the patrimonial practices of
elected representatives from the provinces is seen as a fall-back into darker times of
vulgar corruption. The disregard for the rule of law (etc) is perceived as a threat. The
middle class fears that “corrupt politicians use our tax money to buy votes from the
greedy poor with populist policies”.
5. Desperate and angry, elites and middle class in the capital turn to extra-constitutional
means to topple the elected autocrat. Hundreds of thousands of middle class men and
women are marching in the streets, calling for interventions by the judiciary and the
military.
6. Despite military coups & judiciary interventions, “elected autocrats” manage to come
back with the support of the loyal majority.
Contact: marc@fes-thailand.org
Historically, patterns of transformation processes look
remarkably similar in societies around the world…
Stability
Instability
closed
open
…opening up creates economic, political and cultural conflicts,
which can only be resolved by a new social contract.
Contact: marc@fes-thailand.org
In order to resolve Thailand’s conflict, the nature of the
transformation crisis needs to be better understood…
POLITICAL CONFLICT
TRANSFORMATION CRISIS
Contact: marc@fes-thailand.org
Driver 1: Complexity
A modern and globalized economy needs efficient
service, management and steering…
TRADITIONAL ECONOMY
HIGHLY COMPLEX ECONOMY
TRUST BUILT BY PERSONAL RELATIONSHIPS
TRUST BUILT BY INSTITUTIONS
…A political order based on personal relationships does not have the
institutions necessary to satisfy the needs of a complex economy
Contact: marc@fes-thailand.org
Driver 2: Diversity
On the cultural level, the pluralisation of lifestyles,
values and identities …
…creates the “noise” of permanent debate typical for a modern society
Contact: marc@fes-thailand.org
Driver 3: CONFLICT
Economic development creates winners and losers…
…triggering permanent conflict between social classes
Contact: marc@fes-thailand.org
Structurally, development erodes the traditional
vertical society...
…but a
new political process does not emerge by itself
Contact: marc@fes-thailand.org
To tackle the challenges of a modernizing society...
 Universally accepted rules who gets mandate to make decisions, and what
are the powers of those controlling decision makers
 Mediation mechanisms for permanent conflict
 Management capacity of complex economy
 Impartial institutions to fight corruption
 Merit-based education system
 Responsive policies to address crisis of social justice
…an upgrade of the “operating system” is needed.
Contact: marc@fes-thailand.org
“Short-cuts” and “quick fixes” are counterproductive…
Stability
Instability
closed
open
…because they delay or derail the process of political transformation.
Contact: marc@fes-thailand.org
Traditional governance mechanisms…
How to satisfy the growing demands for public goods if the
middle class does not accept to be taxed?
How to deal with demands for greater participation in
decision making if traditional elites do not accept all citizens
as equal ?
How to process the large amounts of information needed to
stir a globalized economy when only a few people have the
authority to make decisions?
How to mediate permanent conflict between social classes or
identity groups if political culture fears debate as divisive and
conflict as decay?
Policy
maker
How to tackle politicized problems as corruption if
institutions lack the legitimacy of impartiality?
…lack the capacity to manage a complex economy and pluralist society
Contact: marc@fes-thailand.org
To overcome the transformation conflict...
SOCIAL CONTRACT

Elites accept democracy as the
only game in town… and learn
how to win majority with political
platforms responsive to the
needs of the society
 Middle class accepts to finance
responsive state… and get
meritocracy and protection by
rule of law
 Majority population offers social
peace and accepts antimajoritarian safeguards … in
return for full capabilities for all
…society needs to renegotiate the social contract.
Contact: marc@fes-thailand.org
To continue economic development, many
challenges must be addressed
Finite Resources/ Energy security
Third Industrial Revolution/
New global division of labor
Climate Change/
Natural Disasters
Industrialization
Export
Low Wage
Vulnerability
to external
shocks
Financial Crisis
Looming
Global Recession
= Lack of external
Influx of “hot money”/
demand
AEC: Low Wage competition
Currency volatility
Contact: Marc Saxer, marc@fes-thailand.org
Japanese
Tsunami
A new development model is needed
GOVERNANCE
TOOLS
•
•
•
•
•
•
•
•
•
•
•
•
•
•
To Achieve
Collective Bargaining
Minimum Wages/ Wage
Policy
Short Term Employment
Vocational Training
Lifelong Learning Programs
Decent Work
•
•
•
Financial Market
Regulation
International Monetary
Regime
Capital Controls
Administrative Capacity
(Oversight and Control)
•
Market introduction
schemes
Standard Setting
Emission Trading
R&D in (green)
technologies
•
•
•
STRATEGIC
AIMS
To Fire Up
Income Equality
Inclusive Institutions
Public Goods (Education,
Health, Social Security)
Curbing of
speculation
Anti-cyclical macroeconomic guidance
•
•
Fair Income For All
(consumption
demand)
Include all Talent
(innovation & labor
productivity)
•
Stable financial
markets
Balanced Trade
(balanced current
accounts)
Balanced Budgets
(fiscal sustainability)
Stable natural, social
environment
•
•
•
To drive
•
•
Setting Incentives for
Productivity and
Innovation
Long-term investment &
management strategies
De-Coupling
GROWTH
ENGINES
•
•
GROWTH
COMPASS
Contact: marc@fes-thailand.org
NORMATIVE
VISION
Socially
Just
Growth
Resilient
Growth
(Green) Innovation
“Greening the Old
Economy”
(resource efficiency)
To Produce
Green
Dynamic
Growth
GOOD SOCIETY
with
FULL
CAPABILITIES
FOR ALL
The new order will be the outcome of the political
struggle …
Status quo Coalition
EXCLUSIVE
SOCIETY WITH
PRIVILEGES FOR
THE ELITES
TRADITIONAL
DEVELOPMENT
MODEL
SOCIALLY JUST,
RESILIENT AND
GREEN DYNAMIC
DEVELOPMENT
MODEL
Rainbow Coalition
GOOD SOCIETY
WITH FULL
CAPABILITIES FOR
ALL
Progressive Change Coalition
… between those who benefit from the status quo
and those who seek change.
Contact: marc@fes-thailand.org
Vicious Circle of Transformation
Political and
economic
INNOVATION
ability crippled
Change is feared as decay
Conflict paralyses
political system
Contact: Marc Saxer, marc@fes-thailand.org
Society cannot
adapt to change
Thailand lacks a democratic center
Democratic center
Feudal Elites
Capitalist Tycoons
Bangkok middle-class
North- Eastern
middle-class
Southern
middle-class
Red workers
Yellow workers
“Red Urbanized Villagers”
Yellow Urbanized Villagers
Southern
“Political Peasants”
yellow extreme
North – Eastern
“Political Peasants”
Moderate
Contact: marc@fes-thailand.org
red extreme
Majority is not enough…
limit abuse
of power
emancipate
from patronage
marginalize
marginalize
…democracy needs a solid social foundation in the center.
Contact: marc@fes-thailand.org
Only a social contract based on social compromise…
Elites
Full
Capabilities
legitimate
mandate
to govern
Middle Class
Tax burden
Social
Peace
Majority Population
... works as a stable foundation for a political and
economic development
Contact: Marc Saxer, marc@fes-thailand.org
Social Contracts based on
social compromise
 USA: Roosevelt’s “New Deal” (1933, cancelled 1981)
 Canada, Australia, New Zealand
 Western Europe after WW II
o Germany
o Netherlands, Belgium, Luxemburg
o France
o UK (cancelled 1980)
o Italy
o Switzerland, Austria
o Scandinavia (Sweden, Norway, Finland, Denmark)
 Latin America
o Brazil
o Chile
o Uruguay
o Costa Rica
Contact: Marc Saxer, marc@fes-thailand.org
Many challenges and obstacles have to be tackled…
Political Field
Individual
Actors
Strategic Interests
Coalition
Interests, Agendas, Leverage, Strategies, Actions, Coalitions, Alliances, Deals, Networks….
Narrative
Discourse
Discourse World
Topos
Policy
Discourse
Paradigm
discourse
Meta Discourse
Discourse
Alliance
Values, Lifestyles, Norms, Narratives, Myths, Agenda, Historical Experiences, Public Opinion…
Elite
Society
Middle Class
Rural population
Classes, Milieus, Ethnic Groups, Religious Communities, Hierarchies, Winners and Losers….
Political Economy
Contact: marc@fes-thailand.org
Production
Base
Income
Complexity Distribution
Diversity
Division of Labor, Distribution of Resources, Functional Logic, Means of Productivity….
Political battles over policies are likely to be lost if
they go against the grain of hegemonic paradigms…
Old Discourse
Cheap Labor
From competiveness by
cheap labor …
From diversification….
From patronage…
New Discourse
Minimum Wages, Social
Security, Redistribution
…to investing in human capital for
productivity and innovation led growth
…to Moving up the value chain
...to empowerment/
capabilities
From “markets are rational” …
… to “markets are flawed”
From “inequality is morally just” …“inequality is injustice”
...major policy shifts need to be prepared by discourse shifts on the
deeper levels of paradigm and narratives
Contact: marc@fes-thailand.org