On October 13, 2016 His Majesty King Bhumibol Adulyadej passed away at the age of 88. He was the world’s longest-serving head of state and the longest-serving monarch in Thailand’s history. His passing was mourned by many. His Majesty had been monarch since 1946, and had presided over his country during a period of enormous change.
Indeed, the world was still emerging from the destruction and geostrategic shifts of the Second World War when the young king took the throne. At the time Thailand had a population of around 17m, with per capita GDP estimated at BT59,700 ($1680).
Agriculture accounted for 60% of national income, with manufacturing contributing just 10%. Infrastructure was poor, and education and health care services minimal. In 1946, for example, the country established its first school of midwifery and hygiene.
Sea Change
However, Thailand, along with the rest of the world, has since undergone a significant transformation. In 2015 the country’s population stood at just under 68m and GDP per capita at $5815, according to World Bank data.
Since 1981 the manufacturing sector has accounted for a larger share of GDP than agriculture, while services overtook both as long ago as 1952. Thailand now has a key position in many global logistics chains, its airports are hubs for international travel and its medical services attract patients from around the world. Since King Bhumibol Adulyadej ascended the throne, the Cold War has come and gone, and the current period of globalisation may have reached its apogee. Even in some of the most remote Thai villages, local farmers can now call their sons and daughters in distant Bangkok on a mobile phone, and Thai engineers and technicians have found employment everywhere from Dubai to Denver, and from Beijing to Buenos Aires.
Throughout all these profound changes, King Bhumibol Adulyadej has provided a welcome and much respected thread of continuity and stability. During his 70-year reign, he saw 30 prime ministers come and go. He met world leaders from former US President Lyndon Johnson to former Chinese Chairman Deng Xiaoping, former French President Charles de Gaulle and Russian President Vladimir Putin. Throughout, His Majesty remained a pillar of strength and national pride for the Thai people.
This thread of continuity has now been picked up by his successor, His Majesty King Maha Vajiralongkorn Bodindradebayavarangkun. The new king has inherited a many achievements from his father’s reign, while he will also face challenges. Indicating that in the first few months of his reign he intends to be an active monarch, the new king is likely to make a lasting impression on Thailand and the world as he seeks to move the country still further forward.
Early Life
King Bhumibol Adulyadej was born in Cambridge, Massachusetts, in the US, on December 5, 1927. His father, Prince Mahidol Adulyadej, studied public health and medicine at Harvard University, where he met Sangwan Talabat, a nursing student, and the mother of the future king. King Bhumibol Adulyadej’s brother, King Ananda Mahidol, was born in Germany, and as the elder of the two it was King Ananda Madihol who first acceded to the throne of Thailand in 1935. At the time, the prince was still only nine years old. Known as King Rama VIII, he met a violent end at the palace in June 1946 at the age of 20. His younger brother then succeeded him. Still a young man, King Bhumibol Adulyadej continued his studies in Europe for the first years of his reign, meeting his future wife, Sirikit Kitiyakara, in Paris. They were married in April 1950, a week before the king’s coronation. The marriage produced four children: Princess Ubolratana, who was born in 1951; Princess Maha Chakri Sirindhorn, born in 1955; Princess Chulabhorn, born in 1957; and the current king, Maha Vajiralongkorn, who was born in 1952.
Unique Style
King Bhumibol Adulyadej was the first king to rule Thailand as a constitutional monarch, a role which during his first years on the throne limited his activities largely to ceremonial events. Yet, as his reign continued, His Majesty became increasingly active, consolidating support for the monarchy and becoming known as the development king during the 1960s and 1970s. He took a particular interest in rural development, securing political and financial support for projects that ranged from cloud seeding to dam and irrigation programmes.
During the late 1950s and early 1960s many Chakri dynasty court ceremonies were revived, as the monarchy strengthened its role and visibility in Thai society. In the tumultuous years that followed, King Bhumibol Adulyadej took on important roles, as military and civilian governments alternated. Intervening both indirectly and directly at times, such as during the 1992 crisis, His Majesty became widely credited with averting civil war and easing social tensions. The king was able to act largely due to his ability to gain respect from all by remaining deftly outside the day-to-day of Thai political affairs. He was known for being scrupulously fair and seeking to steer the middle path between rival power blocks.
Major Projects
In the 1980s the king established the Office of the Royal Development Projects Board to coordinate the growing number of projects he had initiated. Some 4600 of these are now in operation around the country, mostly focusing on the development of water resources. In 1988 His Majesty also founded the Chaiphattana Foundation using the royal family’s own funds. The foundation runs experimental development projects that tackle a variety of issues, such as forestry, agricultural practices, nutrition and environmental management.
In 2006 the king celebrated his 60th anniversary and was awarded the first Human Development Lifetime Achievement Award from the UN Development Programme (UNDP). A Renaissance man, King Bhumibol Adulyadej was also an accomplished musician, playing jazz saxophone and composing. His Majesty wrote, painted and sailed, while being fluent in English, French and German.
His health, however, began to seriously deteriorate after 2007, although he remained active. After a succession of illnesses, he finally succumbed in Bangkok’s Siriraj Hospital in October 2016. A year of national mourning was declared, with the king’s huge popularity evident by the crowds of mourners and national outpouring of grief that followed.
Economic Policy
One of the king’s most accomplished works during his reign was the establishment, in both theory and practice, of a new development theory known as sufficiency economy philosophy (SEP). This theory draws deeply on Thailand’s Buddhist tradition, which emphasises the Middle Way. Also known as the Eightfold Path, this philosophy steers the individual towards recognising the importance of balance and that nothing in the world is permanent. The Middle Way advocates the avoidance of extremes, with SEP suggesting that a similar approach to economics is advisable.
Soon after he acceded to the throne, His Majesty began touring the country and took a particular interest in agriculture, which introduced him to the difficulties many farmers faced in terms of debt and monoculture. King Bhumibol Adulyadej then began establishing development projects around the country that ranged from the introduction of tilapia fish farming to rural road building and cloud seeding. It was with this experience under his belt that he began articulating SEP.
The theory is a decision-making framework based on both knowledge and virtues, with three guiding principles, namely, moderation, reasonableness and prudence. The outcomes of decisions based on SEP should reflect balanced progress towards sustainability in the four dimensions of life: economic, social, environmental and cultural.
SEP is similar to schools of thought in Western economics in that it contrasts shareholder theory’s concentration on the maximisation of shareholder’s profits with the idea that more parties are involved than just the shareholders. Other stakeholders include employees, customers, suppliers and financial, labour and governmental groups, among others. Maximising benefits for all is the goal of this economic system.
In Practice
SEP theory continued to develop, and the 1997-98 Asian economic crisis propelled it into the global spotlight. With Thailand’s economy facing the consequences of many years of unsustainable growth, in December 1997 His Majesty took issue with the then-fashionable description of South-east Asian economies as Asian Tigers. What was important, he said, was not being a tiger, but having, as he termed it, “a sufficient economy.”
Numerous projects around the country were undertaken with the SEP philosophy in mind, with the result that they were recognised by many international development agencies, including the UNDP. Examples include supporting tribal communities in the north to switch from opium cultivation to coffee and macadamia nuts. Such projects dovetail easily with concepts of sustainable development, encouraging product diversity to hedge against risk and protecting vulnerable communities against the ups and downs of global markets.
The philosophy has also found great favour with the country’s current rulers. The leader of the National Council for Peace and Order, Prime Minister Prayut Chan-o-cha, recently described SEP as an “explosion from within.” SEP does not encourage economic isolationism, however, and seeks to see Thailand take its place in the world economy, but on the basis of domestic strength and diversity, rather than weakness and concentration.
In recent years too, international awareness of SEP has grown, with the philosophy and the experience of its implementation being a major part of Thailand’s overseas aid efforts.
The Thailand International Cooperation Agency is one key channel for this. Set up under the Ministry of Foreign Affairs in 2004, the agency has introduced and applied SEP projects from Afghanistan to Lesotho, Jordan and Timor-Leste.
New Times
The new monarch, King Maha Vajiralongkorn, has thus begun his reign as the head of an institution both strengthened and protected by the stabilising political, economic and social influences of his father. However, for all the achievements of the last few decades, Thailand faces key challenges. Farmers still face one of the highest levels of debt in the region, while the manufacturing sector lacks the local, skilled and educated workforce necessary to take many of its sub-sectors to the next level. Education and training are in need of an overhaul, not least in English language learning.
Meanwhile, public sector and state-owned enterprises often display inefficiencies, while small and medium-sized enterprises can be under-supported. At the same time, environmental degradation threatens public health and undermines one of the country’s key economic sectors, tourism.
Concurrent with this are issues surrounding uneven development, with per capita incomes varying widely from region to region and from city to countryside. Social and political division has also caused conflict in the past, with a need for reform and reconciliation if the country is to successfully re-enter stable, democratic governance. The new monarch thus inherits a kingdom now at the turning point, with the opportunity to advance to the next level of income and prosperity beckoning.
10th Monarch
The new king was born on July 28, 1952 at the Dusit Palace in Bangkok. He is the only son of King Bhumibol Adulyadej and Queen Sirikit, and as such under Thailand’s laws of primogeniture he was named crown prince and successor in 1972. Before then, he was educated at the palace in Bangkok, then in the UK, first at King’s Mead School in Sussex and then at Millfield in Somerset.
In 1970 he attended military training in Australia, then in 1972 he enrolled at the Royal Military College, Duntroon, in Camberra, graduating in 1976. King Maha Vajiralongkorn attended the Royal Thai Army’s Command and General Staff College in 1977, where he qualified as a helicopter and fixed-wing pilot. Due to his training, His Majesty has engaged in combat operations at various times against communist insurgents in the north of the country. In 1978 he became the head of the King’s Guard, but then cut short his term to serve 15 days as a monk, as is customary for Thai royals. He subsequently obtained a second degree in law from Thailand’s Sukhothai Thammathirat Open University in 1982.
In 1977 the king married Princess Soamsawali, and in 1978 they had a daughter, Princess Bajrakitiyabha. The couple divorced in 1991. King Maha Vajiralongkorn officially remarried again in 2001, to Srirasmi Suwadee, with whom he had a son, Prince Dipangkorn Rasmijoti. Their marriage ended in 2014.
Active Term
During his time as crown prince, His Majesty demonstrated a keen interest in health care, education and agriculture. The Crown Prince Hospitals are one of his achievements, with these community medical and health care centres initially set up to serve more remote communities around the country. Now, they can be found all over Thailand. In education, he has promoted the idea of lifelong learning and has strong connections to the Rajabhat University system, which are colleges offering degree courses that are often more accessible than those of public universities.
The new king makes an annual donation of BT42m ($1.2m) for scholarships for Rajabhat students, and personally hands out degrees at graduation ceremonies. In agriculture, he has worked to establish a system of Mobile Agricultural Clinics, which are groups of experts who can quickly deploy to a region for village in need of advice or assistance.
As the crown prince, he also took an interest in public health and sport, appearing at two cycling events in Bangkok in 2015.
Long Line
Upon the death of King Bhumibol Adulyadej, however, then-Crown Prince Maha Vajiralongkorn became the 10th king of the Chakri dynasty. The dynasty’s history stretches back to 1782 and the founding of Bangkok, as well as the rebirth and resurgence of the Thai kingdom following years of Burmese hegemony. Formerly styled King Rama X, he ascended the throne on December 1, 2016, 50 days after the death of his father. The delay was due to his request to mourn the loss of the former king along with the people of Thailand.
Since ascending the throne, the new king has also demonstrated a desire to be an active monarch. King Maha Vajiralongkorn’s military experience and training has allowed him to share common ground with Thailand’s current military rulers, who are themselves staunch monarchists. The king has been active in current efforts to establish a new constitution, having asked for several changes in the draft document approved by referendum in August 2016. The changes were related to royal power and were quickly accepted, which means the king, for example, will now be able to continue ruling even when travelling abroad. Previously, a regent would have had to be appointed during such a period of absence. This arrangement is now optional.
King Maha Vajiralongkorn has also made changes to the composition of the royal household, bringing in new associates and advisers, particularly from the military and his old unit, the King’s Guard.
His Majesty has also increased his authority within the Buddhist religious community, appointing a new supreme patriarch and ending the previous arrangement whereby a council of monks would make the supreme appointment.
Another important focus of King Maha Vajiralongkorn has been the need for peace and reconciliation in the country, after recent years of political fracture. This has largely been achieved through the National Reform Steering Assembly, which was formed to bring together all elements of Thai society in promoting reconciliation and a democratic transition. In his first New Year speech in mid-January 2017, the king stressed the importance of love, unity and peace among Thais. He has also urged for more support for victims of flooding in southern Thailand in 2017, leading charity efforts to aid those affected.
Challenging Times
Aside from the political and social challenges facing the country, and its efforts at reconciliation, the new king also inherits a kingdom facing numerous economic challenges.
However, the new king also benefits from the advances his father made. One measure of the solid ground laid by the previous king is the UN Human Development Index. In the most recent survey for 2016, Thailand achieved a score of 0.740, placing it in the “high human development” category and ranking 87th out of 188 countries surveyed. This also indicated a more than 45% increase in Thailand’s score since 1980. Between 1990 and 2015 life expectancy at birth increased by four years, the mean years of schooling rose 3.3 years and expected years of schooling by 5.2 years.
An important demographic shift also occurred during the later years of King Bhumibol Adulyadej’s reign, in which falling child mortality led to lower fertility rates, creating smaller, wealthier families. Indeed, by 2010 Thailand had achieved the lowest rate of multidimensional poverty in the East Asia and the Pacific region at just 1%, according to UNDP figures. The country now has the second-highest GDP in South-east Asia, after Indonesia, having risen from low-income to middle-income status.
What was once a largely rural, agriculture-based economy now relies on more urban-based services and manufacturing, while productivity has grown and an export-based economy developed, alongside a network of international trade agreements and organisational memberships. Previously, Thailand also achieved ahead of schedule many of its UN Millennium Development Goals, and it is now progressing on to the more ambitious Sustainable Development Goals.
New Obstacles
Yet, this advanced stage of development and demographic transition is creating its own challenges. One outcome is that Thailand will face an aging populace in future, with the share of working-age people in the total population likely now peaking. At the same time, there are clear regional and urban-rural variations in the standard of living. The most recent 2014 UN Economic and Social Council report on Thailand noted that in 2012 two-thirds of the country’s poor lived and worked in rural areas, with the north and north-east regions having particularly high concentrations of poverty. At that time, the north-east region alone was home to 3.7m poor persons, a figure representing 19.8% of the region’s entire population and 44.5% of Thailand’s total poor. Some 90.5% of this population were unskilled labourers, with little or no access to vocational training, while around half of them were over the age of 40 – a consequence of rural depopulation as younger Thais travel to the big cities for work and opportunities.
Figures from Thailand’s National Economic and Social Development Board also show that while for Bangkok and its three neighbouring industrialised provinces had an average monthly household income of BT43,058 ($1210) in 2013, in the north-east the average was BT19,267 ($543) a month. In the north more generally the average was BT19,181 ($540). Debt levels have also been rising. In 2016 the University of the Thai Chamber of Commerce stated that average household debt was now around BT119,000 ($3350) per family – the highest in eight years. This is particularly concerning in rural areas, where in times of need farmers have sometimes resorted to loan sharks to gain access to credit, which is becoming all too frequent as climate change impacts productivity.
Trade & Industry
Meanwhile, the global economy that export-oriented manufacturing and industrial sectors are dedicated to has also been undergoing changes. Thailand is now a leading member of the ASEAN and its new ASEAN Economic Community, a project that seeks to further integrate the association’s economies and remove remaining obstacles to free trade and movement of capital and labour. One effect of ASEAN’s success has been to establish many of Thailand’s leading manufacturing businesses as part of a regional supply chain, in which giant corporations source materials and processes across national boundaries. This globalised system was on the verge of further expansion, too, with the Trans-Pacific Partnership, which was effectively vetoed by the administration of US President Donald Trump. This marked a worldwide wave of anti-globalisation and uncertainty, which has not left Thailand immune. Indeed, some now wonder if the country is not particularly exposed to new risks, given its open and international economy.
At the same time, even before the new US administration took office, global trade slowdowns had been having a noticeable effect on Thailand’s economic growth, which, since 2013, has lagged behind that of the ASEAN 5 – the association’s five largest economies of Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Veerathai Santiprabhob, the governor of the Bank of Thailand, also told local press in late 2016 that China’s transition from a mainly export-led economy to a consumption-led one “could have an adverse impact.” Under such circumstances, the doctrines of moderation, reasonableness and prudence underscoring the late King Bhumibol Adulyadej’s SEP may stand Thailand in good stead. SEP accepts that change is a constant, helping businesses, communities and individuals to hedge against future risk by diversifying, while also striking a balance between short and long-term gains.
Looking Ahead
Investment in the long-term is indeed something that King Maha Vajiralongkorn has long shown concern over through his involvement with Rajabhat University, which offers degrees to many who would otherwise remain outside the public university system. Education remains vital to the long-term development of the country, particularly if it is to move out of the middle-income country bracket via the development of a more knowledge-based economy.
There are considerable challenges within the education sector that continue to need addressing. This was recognised in a recent OECD-UNESCO report on the sector, which said, “Thailand finds itself at a crossroads”. While recent years have seen improved investment in education and the development of better curricula, the report concluded that access for poor and rural children and students remained low, while all-important ICT skills were not being adequately taught. The risk of a two-tier education system was also identified, which could reinforce regional income and opportunity gaps.
Plan In Place
Thailand’s current government is keenly aware of these challenges and the need for further work in the sector, which have led to the 12th National Economic and Social Development Plan 2017-2021, which makes human resource development one of its six main aims.
The strategy aims to improve security, competitiveness, social equality and green growth, as well as rebalance public sector development. The principles of SEP are the basis for the strategy, which Prime Minister Prayut sees as vital during a time of “Thailand’s fourth industrial revolution.”
Referring to this initiative as Thailand 4.0, the prime minister has also said the plan sees both reform of five existing industries, the so-called First S-Curve, and the promotion of five other sectors, known as the New S-Curve. The old five legacy industries include automotive, electronics, medical and wellness tourism, agriculture and biotechnology, and food, while the New S-Curve includes robotics, aviation and logistics, biofuels and bio-chemicals, the digital industry and health care services. The latter group is thus entirely composed of high-tech, high value-added sectors, all of which require both a highly educated workforce and capital investment.
Invest Away
Attracting investment is also an issue for Thailand, as the global atmosphere of uncertainty has taken its toll. At the same time, with the country in transition, not only between monarchs, but also in its movement back towards an elected government, political risk has made investors reluctant to commit and consumers reluctant to spend. In order to help counteract these trends, the government and the state Board of Investment (BOI), which promotes foreign direct investment, have announced new incentives. Restrictions on foreign entrants in a number of services, such as banking and insurance, have been eased, with plans for this relaxation to be expanded to other sectors.
At the same time, the government has unveiled a plan for substantial infrastructure spending, with some BT2.2trn ($62bn) now earmarked for 2017 alone, mostly for the transport sector. This area is a key pillar for economic development, with impacts on other sectors. The IMD’s World Competitiveness Scorecard ranked Thailand 28th out of 61 countries in 2016, up from 30th in 2015; however, its infrastructure ranking slipped from 46th to 49th. Poor transport infrastructure also adds to regional and rural-urban divides, which can be a liability as the government works to ease social tensions.
At the same time, S-curve industries, both old and new, are receiving a range of benefits from the BOI, including eight-year corporate tax exemptions, a 25% reduction in installation and construction costs, and double deductions in areas such as transport and utility fees. All these incentives should help mobilise funds for the range of projects the government now wants to undertake. The $62bn in infrastructure spending, for example, is to be funded by a combination of borrowing, national budget allocations and public-private partnerships.
IT Projects
The government has also announced a series of significant investments in technology and innovation. The BT10bn ($281.7m) technological innovation park in Chonburi Province, south-east of Bangkok, is one of the more recent of these initiatives and is scheduled to open in 2018 and attract both start-ups and global tech giants. The government also announced the creation of a $570m venture fund in April 2016, with the aim of financing some 2500 existing tech start-ups.
The private sector has responded to this effort, with mobile operator True Corporation unveiling plans for a $500m digital hub project, True Digital Park, in 2018. Thailand is already changing, moving towards the kind of higher value-added economy necessary to raise incomes to the next level. This is being planned in a way that follows the precepts of SEP. The new king may have a key role to play in this as well, ensuring that his father’s legacy continues in the economic, political and social spheres.
The Golden Thread
At his coronation in 1950, King Bhumibol Adulyadej declared that he would reign “with righteousness for the happiness and benefit of the Siamese people.” Today, 67 years later, his success has had a lasting and substantial impact on the South-east Asian nation. Indeed, the legacy of the late king is a great one, consisting not only of the achievements of his many decades on the throne, but of the centuries of monarchical tradition that came before him. His popularity cut across a number of social divides, such as class, region, urban-rural, military and civilian.
Few monarchs, or leaders of any kind, have managed to bring together such a degree of intellect and insight with practical application and experience as the late Thai king. King Bhumibol Adulyadej was ahead of his time in terms of his thinking on the environment and sustainability, while his thoughts in the economic sphere gained validation in the heat of the 1997-98 Asian financial crisis.
The unbroken thread of the monarchy and Chakri dynasty is a strong one, binding together the sometimes disparate factions and interests of this vibrant kingdom. Its role in bringing the nation together is also one that the new king seems particularly aware of. In late 2016 King Maha Vajiralongkorn said, “No matter what problems we may face in our country, we believe that if we work together, we can overcome and alleviate any situation.”
He now sits on the throne at this time of great change, with the need for reform and reconciliation at the forefront. Thais and many others besides wish his reign every success in meeting these challenges.
Read More from OBG
