democratic governance: striving for thailand’s new normal€¦democratic governance: striving for...

22
Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016. 25 March 2016 Page 1 of 22 Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun We are at an interesting time of political transition, and many of you may be trying to envisage what Thailand’s new normal will be when we finally emerge. My predictions are probably as good as yours. With the benefit of hindsight, however, we can see that globalization, consumerism, extravagance, dishonesty, and immoderation have led to management failures in both government and business. It is therefore time to have a better understanding of our past behaviour and how it contributed to the present situation. We should be mindful of the Sufficiency Economy thinking formulated by His Majesty King Bhumibol Adulyadej in terms of its key principles of moderation, rationality, and immunity. A better grasp of these concepts can help us confront problems or crises and find solutions. I would like to suggest what I believe to be the four essential elements of the new normal in the development of Thailand – the elements that will contribute to true and enduring change.

Upload: tranliem

Post on 29-Sep-2018

216 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  1  of  22    

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

We are at an interesting time of political transition, and many of you may

be trying to envisage what Thailand’s new normal will be when we finally

emerge. My predictions are probably as good as yours. With the benefit

of hindsight, however, we can see that globalization, consumerism,

extravagance, dishonesty, and immoderation have led to management

failures in both government and business.

It is therefore time to have a better understanding of our past behaviour

and how it contributed to the present situation. We should be mindful of

the Sufficiency Economy thinking formulated by His Majesty King

Bhumibol Adulyadej in terms of its key principles of moderation,

rationality, and immunity. A better grasp of these concepts can help us

confront problems or crises and find solutions.

I would like to suggest what I believe to be the four essential elements of

the new normal in the development of Thailand – the elements that will

contribute to true and enduring change.

Page 2: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  2  of  22    

Element One

The first element in Thailand’s new normal rests on sustainable and

widespread economic development. I emphasize sustainable and

widespread. In the past, we focused on the overall rate of economic

growth but neglected the quality of that growth as well as the equitable

distribution of income and opportunities. The Asian financial crisis of

1997, and the more recent global financial crisis, both illustrate the

dangers of unbridled economic growth. We have also been reminded

that growth fuelled by populist measures which disregard fiscal discipline

are unsustainable and leave problems in their wake. In Thailand, the

first-car purchasing and rice-pledging schemes were both examples of

short-term stimulus measures. Policies of this kind are pushed by

governments the world over to secure quick popular support with

inadequate regard for their negative economic repercussions.

Sustainable economic development must focus on strengthening the

foundations of the economy. This entails raising underlying economic

competiveness, be it through improving public sector efficiency, state

enterprise reforms, developing skilled and flexible labour, or upgrading

education and research. Raising competitiveness requires appropriate

incentives through effective market mechanisms.

Page 3: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  3  of  22    

The state’s role should largely be as an enabler, establishing an

environment that is conducive for market competition to enhance

economic efficiency. Things the state should do include providing

regulations to limit monopolies and establishing frameworks for

consumer protection. Things the state should not do include competing

directly with the private sector or issuing laws and regulations that

undermine efficient market mechanisms.

These principles were in fact enshrined in Thailand’s 1997 constitution

and reflected in the Trade Competition Act of 1999, but enforcement of

the laws was never sufficiently exacting. As a result, competition in many

sectors, particularly in basic services such as transportation,

communications and energy, remains inadequate. Improving the

efficiency of state-owned enterprises is an important element in this

regard, and I shall return to it later.

For development to be sustainable, the fruits of economic growth must

be spread widely and fairly to foster social cohesion and continued

economic and political legitimacy. Many of the economic and social

problems we currently face, including the simmering political tensions

and sporadic clashes we have suffered in the past decade, can be

traced back to the injustice and inequality inherent in our society. Studies

also suggest that economic disparity in itself retards economic growth,

which is why the topic is of such interest in so many countries. Even the

Page 4: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  4  of  22    

United States, the world’s leading economic power, is home to some of

the greatest economic inequality in the developed world. Unless

seriously addressed, inequality and injustice in all their forms will

eventually hold back a country’s development and breed political

upheaval, even violence.

Element Two

The second element in Thailand’s new normal is promoting an open and

inclusive society. Apart from the equitable distribution of income

discussed earlier, we must ensure equal rights, liberties, and

opportunities for all segments of society. Every group, every religion,

every region, every rung of society must enjoy these to be able to

participate collectively in directing national development. This will instil a

critical sense of ownership in the nation’s destiny that encourages each

and every member of society to keep the state under constant scrutiny.

Liberty and equal rights are not simply about the right to vote. The

demands and views of everyone must be heard and respected – not just

those of the victors in elections. Majoritarian rule does not give a

mandate to the winning party to do as it pleases in a winner-takes-all

fashion. As the American libertarian James Bovard once observed,

"Democracy must be something more than two wolves and a sheep

voting on what to have for dinner." If democracy is to survive in the long

Page 5: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  5  of  22    

term and create happiness, there has to be tolerance and an acceptance

of diversity in society. Minority groups must receive equal benefit from

the electoral process.

An open and inclusive society goes hand in hand with freedom of

expression and respect for diversity of views and beliefs. In much of

Asia, including Thailand, where harmony is a core value and conflict

avoidance a first response, our challenge is to embrace criticism, the

weighing of pros and cons and disagreements, and accept them all as

part of the maturation of the democratic process. In a democracy things

are not always strictly black and white, right or wrong. Often there is no

absolute right or wrong, just different perspectives and judgments. In

striving towards a genuinely open and inclusive society, we must learn to

move forward together on the basis of diversity without causing division

or conflict.

In an open and participatory society, the media have a very important

role to play in reporting opinion neutrally, creating balance and

preventing distortion. Modern technology has opened the way to the

rapid dissemination of information, and opened up unprecedented space

for public discourse. The Internet has revolutionized participation in

debate and the political process, and fostered many online communities.

There are a multitude of voices. Some may be contradictory, some more

informed than others, and some personal opinion, gossip, or speculation.

Page 6: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  6  of  22    

It is a vast marketplace of ideas and, as in all markets, not everything is

of equal value. So long as our institutions enable people to understand

how to assess ideas in this marketplace – selecting the rigorous and

reasonable, rejecting the shoddy and reckless – democracy is not simply

sustained but thrives.

As Thailand approaches elections in the near future, it will be imperative

for the winners to consider themselves representatives of the entire

country, and not just of the people who voted them in. They have a duty

to address the concerns of all interest groups and promote consensus in

society. Striking that balance is an art. I hope all political parties have

learned important lessons from our painful past, and will do their utmost

to pursue this vital principle of governance.

Element Three

The third element of the new normal in Thailand is the rule of law. This

goes beyond simply the application of the law. It requires adherence to

both the spirit of the law as well as its underlying moral principles. Rule

of law entails not only the clear enunciation of principled rules and

regulations, but that they be applied across the board to all citizens

without exception. Every individual and organization, private and public,

and even the government itself, must be subject to the law. The

legislative and enforcement processes must be transparent and just. The

Page 7: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  7  of  22    

judicial system must be neutral, independent, efficient, and have full

integrity. Most importantly, the law must not be used as a means for

attaining political goals. State actions must not be arbitrary and based on

whims. Dissidents must not be prosecuted or deprived of their legal

rights. The human rights of every citizen must be strictly upheld bar

none.

Lawful governance does not imply using the law to govern people or

enforce the state’s will. We must have rule of law rather than rule by law.

This is a crucial albeit subtle distinction. Here in Thailand, a semblance

of calm and stability belies tensions beneath the surface. Society cannot

flourish in the long run if order and stability are rooted in measures that

inhibit public discourse. When order and stability are imposed rather

than allowed to emerge naturally in accordance with the rules and norms

of society, there can be no transparency.

The World Justice Project has attempted to make global comparisons of

the rule of law. The figures for 2015 see the four top places occupied by

the Nordic countries: Denmark, Norway, Sweden, and Finland. With a

score of 0.52 out of one, Thailand ranks 56th among 102 countries and

11th out of 15 in the region. Thailand trails the Philippines, Greece and

Ghana, and this should remind us that we still have far to travel on our

journey to attaining the rule of law.

Page 8: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  8  of  22    

When the rule of law is weak, corruption flourishes. Democracy becomes

dysfunctional if politicians, civil servants, the private sector, the judiciary,

the police, and the military use their power to enrich themselves and

advance their own interests at the expense of civil society.

We read about the impunity of the rich and powerful in our newspapers

every day. An independent and neutral judiciary is fundamental to the

rule of law. If judges use one law for the powerful and another for the

powerless, the entire political and judicial system is degraded, and the

people’s trust in the government to see justice dispensed is eroded.

The rule of law demands public responsibility and the transparency of

state institutions and their personnel. Accountability and transparency

have the same objective: to protect citizens from misguided policies or

decisions that unfairly favour a minority at the expense of the majority. A

government that is not held accountable, not answerable to anyone, and

its actions not subject to public scrutiny, is more likely to abuse its power

and disregard the public interest. Preventing such outcomes requires

that the decision-making process be transparent and subject to scrutiny.

There must be full and timely disclosure of information about policy and

public projects. Such checks and balances are at the core of the state’s

responsibility to society.

Page 9: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  9  of  22    

Element Four

Governance through the rule of law together with public accountability

and transparency form the basis of responsible government. This is

related to the fourth and final element of the new normal that I would like

to talk about: the need to recalibrate the balance of power between the

state and the people.

Responsive government lies at the core of true democracy, and can

occur only when there is comprehensive decentralization and local

political empowerment. The closer the government is to the people

governed, the more responsive the government is going to be. A

centralized system of governance cannot keep pace with the increasing

complexity of today’s society. Decentralization enables the participation

of more diverse interest groups and represents one way to curb the

concentration of power and influence exercised by political forces.

By decentralization, I do not mean the distribution of power to local

government bodies that report to the central authority. I mean dispersion

of power directly into the hands of people or their representatives. In the

past, we have established local institutions but always retained

centralized control over them. Going forward, we must reform these local

Page 10: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  10  of  22    

bodies so that they become answerable to the needs and demands of

the local populace rather than to the central government.

The heart of democracy beats only with the participation of all citizens in

exercising their rights on issues that affect them directly. In each locality,

province, and region, the demands and solutions to various challenges

may be similar or dissimilar. The formulation of policies and plans of

action should give precedence to the input of local communities. The

state’s role is to provide support with knowledge, data, funding, and

other forms of assistance as needed.

Obviously, on issues such as national security, international relations, or

macroeconomic management, the responsibility and authority must rest

with the central government. But on matters that affect them directly,

people must have a say. Take the education system as an example.

Why should the ministry of education stipulate the curriculum for every

village, district, and province? The role of the ministry should evolve from

one of setting and imposing requirements to one of providing support

and assistance to teachers in terms of information and training.

In the areas of natural resource management, transportation or public

safety, the decentralization of power to the local level will not only help to

increase flexibility in meeting the needs of ordinary people, it will also

Page 11: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  11  of  22    

lower the burden on central government. As things stand, every time a

problem or conflict arises, the aggrieved descend upon Government

House or various ministries in Bangkok. Why can’t we let local

institutions handle these matters directly when it has been amply

demonstrated that the central government is incapable of resolving

problems in an effective and timely manner?

Importantly, once the political process is decentralized, citizens become

more aware, interested, and willing to participate in shaping collective

outcomes. This entrenches democracy in society, and nurtures its

longevity.

The success of decentralization hinges on a balanced and diverse flow

of information, and this brings me to the critical role of civil society. An

active civil society generates a wealth of information for constructive

debate on matters of public interest. Civil society also provides a

mechanism whereby the collective views of citizens can shape and

influence government policy. By bringing arguments and information into

the public domain, policies can be examined and challenged, and

‘activist citizenship’ is fostered by people informing themselves better on

matters that affect them. A genuinely democratic government will feel

obliged to present counterarguments or to modify its position. Such

interactions are healthy for democracy, and improve the decision-making

process.

Page 12: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  12  of  22    

A vibrant civil society relies on the wisdom of the populace and its ability

to make rational and informed decisions. Democracy becomes a force

for meaningful progress when voters not only understand the issues at

hand, but are also conscious of their context, the various alternatives

available, as well as their responsibilities as democratic citizens. We

must therefore urgently reform our education system from one that

simply produces graduates to one that nurtures the ability of people to

think critically and make constructive changes in society.

There has been much discussion on this topic over the years but little

tangible progress. We must take a step back and carefully reassess our

fundamental approach. As things stand, a child starting out in first grade

this year will retire in about 2069. No one here, or anywhere else for that

matter, can predict with confidence what the world will be like five years

from now, let alone in that distant future. Yet we are tasked with

educating our children for that world – to ensure they are equipped to

solve the problems of their time.

In my view, the best way to do this is to shift the emphasis of education

away from memorizing facts and rote learning to focus instead on

nurturing creativity and adaptability. This all starts with getting teachers

to teach less, encouraging students to read more diversely, and ensuring

Page 13: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  13  of  22    

teachers engage in dialogues with students. The main focus should not

be on getting the right answer but on instilling confidence to think

problems through, to voice opinions and to articulate reasoned

arguments.

In an age where a staggering amount of information is available at the

touch of a button or the swipe of a smartphone, learning will be more

important than knowing. If our children are to be able to solve the

complex problems of the future – and climate change is but one – they

will need a high degree of creativity. This is something I feel has been

sadly neglected so far.

The enemy of creativity is the fear of being wrong or making mistakes. I

believe every child is born with an immense amount of creativity and the

capacity to innovate. But an education system that stigmatizes mistakes,

focuses on correct answers, and penalizes wrong ones, serves to retard

creativity. By the time children grow into adults, they have been deprived

of their creative impulse by the fear of being wrong.

Innovation does not come from a fear of being wrong. On the contrary,

the courage to risk making mistakes, the relentless process of trial and

error, and the ability to bounce back from repeated failures are the seeds

of innovation and advancement. Let us not forget that the iPhone many

Page 14: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  14  of  22    

of you carry around was regarded with some scepticism when it was first

released in 2007. Its success is a testament to the willingness of Steve

Jobs to be wrong rather than his fear of not being right.

Human development does not follow a linear trajectory, and success

does not come from a set formula. The learning process is unique for

each child – it is not one size fits all. The education system in Finland

stands out as a success, but it does not rely on a centralized curriculum

or standardized tests. Instead, curriculums are set by schools on their

own and experimental teaching approaches are encouraged. Education

is individualized, and tests are used to identify and build on each

student’s comparative strengths rather than to rank them. The emphasis

on education for practical, everyday life is conveyed by the fact that over

a third of Finnish students attend vocational school.

An education system that promotes good learning skills in children will

contribute to a citizenry capable of grasping issues of concern and

placing them in the right context. This contributes to well-informed,

rational decisions, and helps ensure that the responsibilities of society

under democratic rule are met.

Page 15: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  15  of  22    

A New Normal for Thailand

What I have laid out so far is a vision for a new normal for Thailand built

upon the foundation of democratic governance. It broadly represents a

framework for governance that Thailand has lacked up to now.

We have a tendency to focus on democracy in form rather than in

substance. We follow procedures and go through the motions of

elections. Yet we have paid little attention to developing the institutions

that are critical to sustaining democracy. The challenges that we are

presently facing have their roots in the fact that we have never had a

true democratic transition – a genuine change in our political system.

Change has always been superficial, old wine in a new bottle – or you

could even say old wine in an old bottle but with a new cork. Critically,

we have not dug deeply enough to uncover the true underlying cause of

current divisions in Thai society.

Much of this is unrelated to the actual policies of governments, present

or past, nor is it about a fight between pro-government and anti-

government forces. Rather it is about poverty, social injustice, unequal

Page 16: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  16  of  22    

rights and opportunities, and about the way power is divided between

the state and the people – or even among groups of people.

Thais have traditionally been good at creating problems. Some say that

they are also good at solving them, but is this not really a bit of a myth?

Our development path has been one of muddling along, an ‘ad-hocracy’

you might say. Little has been done in the way of strategic long-term

planning or effective implementation.

While substantial progress has been achieved in terms of economic

development, we have not taken sufficient note of its negative political

and social impact. At this juncture, it has become patently clear that

many of our institutions are inadequate when faced with the challenges

of globalization. Against a backdrop of rapid global change, our

economic, political, and social institutions have simply not kept up.

Democratic governance can serve as a basis for a more balanced path

to development. By paying heed to the diverse views and opinions of a

wide variety of interest groups, the government can pursue a more

rounded and sustainable development model.

Page 17: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  17  of  22    

We Thais often yearn for a knight in shining armour to ride to the rescue

when there are problems. But the time for that kind of ‘I-know-best’ style

of management has passed. For all the information and broad powers

that the state possesses, it does not know best on all issues, particularly

when it comes to increasingly complex modern economic systems.

Why is good governance the key to good economic management? Let

me take the example of state-owned enterprises where performances in

recent years have been worrying, where competitiveness has declined

markedly – and so have operating profits. Those that enjoy monopoly

rights remain profitable, while those that face competition mostly operate

at a loss. The root of the problems lies squarely in governance.

Regulatory frameworks are complicated, with large overlaps and a lack

of overriding authority. Management of state enterprises is vulnerable to

political interference and corruption, as well as competing social and

business objectives. Importantly, there is no clear separation among the

relevant government agencies in terms of their responsibilities as

policymakers, regulators and owners. The uneven playing field state

enterprises and private companies play upon has meanwhile dulled the

impetus to improve efficiency.

Such problems need to be tackled urgently. State enterprises account

for a large part of the economy and exert significant influence on overall

economic efficiency. Their role as providers of basic infrastructure in

Page 18: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  18  of  22    

many forms – electricity, water, telecommunications, transportation,

airports, ports – make them integral to private sector operations.

Inefficient state enterprises not only undermine their own profitability but

also impede the performance of all related private activity. Expensive

and low-quality basic infrastructure translates directly into reduced

competitiveness in private companies. The current reform agenda,

including the proposed establishment of the National State Enterprise

Corporation, warrants attention as it promises significant improvements

in resource allocation. This is conditional, of course, on the integrity and

competence of the management of such an institution.

More broadly, government efficiency has become one of the most

important determinants of a country’s competitiveness. And government

efficiency typically is associated with the strength of democracy. Efficient

government, however, does not necessarily mean small government.

The key lies in the degree of competence with which government affairs

are managed, and responsiveness to the needs of the people. A

development model that emphasises the role of the state in promoting

the freedoms and opportunities of individuals represents the essence of

true democracy. Such a model is described in Development as Freedom

by Professor Amartya Sen, a Nobel laureate for economic sciences.

Page 19: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  19  of  22    

The Road to Reform

To make headway towards the new normal that I have described, we

must embark on comprehensive structural reforms today. Reforms

inevitably create winners and losers. The winners are often diffused and

dispersed. Conversely, the losers can be easily identified; they are

powerful and well organized. Ensuring that the prospective losers do not

impede changes that benefit the public good requires a mechanism to

ensure balanced distribution of the gains from reforms among various

segments of society. This entails inclusive economic and political

institutions, as well as a healthy dose of opportunism. Successful

reforms often result from leveraging on opportunities that arise, such as

at times of crisis. I have always held the view that we did not make the

most of the 1997 financial crisis.

Thus at this point we should not waste time debating where we are, or if

we got here in the right or wrong way. These are important and

legitimate questions that deserve study and reflection, but they should

not prevent us moving forward or seeking solutions to the problems at

hand.

A reform strategy must always be assessed within the context of the

bigger picture. In the past, the main thrust has been through

constitutional reform, which is not ideal and may even be

Page 20: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  20  of  22    

counterproductive. We have been rather profligate with our constitutions.

We are on our 19th – or is it 20th? – in the space of 83 years, which

happens to coincide exactly with my age.

As one of the people involved in drafting Thailand’s 1997 constitution,

which for the first time involved broad-based public participation, I had

hoped it would make Thai democracy more open, transparent and

accountable, and that electoral reforms would limit money politics and

corruption. That said, I always recognized that a constitution is not a

silver bullet for all that ails society. For a constitution to make a real

difference, society must first embrace the underlying values it espouses.

As subsequently became apparent, the constitution alone cannot bring

about meaningful change absent reforms to other key democratic pillars,

particularly political institutions and the mindsets of people.

Structural reform is a continuous process rather than a one-shot

exercise. It might begin with drafting a new constitution, but the process

must evolve. We must not fall into the trap of using shortcuts or quick-

wins to achieve our goals. We must not imagine that certain initiatives

today will bring about lasting change and forever resolve prevailing

problems. There are no once-and-for-all solutions. With constant

change, everything eventually needs to adapt and evolve. Developed

countries do not stand still. They are continuously changing and

adapting. A society with no reform is static and prone to stagnation. And

Page 21: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  21  of  22    

in the process of reform, it is pointless to ask whether success can be

guaranteed of each proposal tabled. Nothing can be guaranteed except

that all the effort expended is based on goodwill and the best of

intentions. We must then stand ready to adapt and adjust down the road

as necessary.

There is no unique blueprint for reforms to bring about true democracy. It

is quite unlike building a house where there are step-by-step instructions

based on clear plans that can be amended as desired or applied to build

hundreds of identical houses. Much like a tree that depends on a host of

supporting factors to flourish – good soil, water, air – true democracy

emerges organically with no predetermined outcome or shape. Its

development is path-dependent, and the most that can be done to

cultivate it is to provide a supportive environment for it to grow. No two

trees are identical, but each one can do just as well providing shade

from the sun.

The seeds of democracy must be sown from within each society for the

shoots to be accepted and nurtured. As Mahatma Gandhi once

observed, “The spirit of democracy cannot be imposed from without. It

has to come from within.” People must want democracy for it to take

hold. Each society must find its own way out of conflict and prioritize its

needs in accordance with its unique experience. The elements of

Page 22: Democratic Governance: Striving for Thailand’s New Normal€¦Democratic Governance: Striving for Thailand’s New Normal Anand Panyarachun Full text incorporating keynote addresses

Democratic Governance: Striving for Thailand’s New Normal

Anand Panyarachun

Full text incorporating keynote addresses to the Bank of Thailand Annual Seminar, 17 September 2015, and the Foreign Correspondents’ Club of Thailand, 23 March 2016.

   

      25  March  2016   Page  22  of  22    

democratic governance that I have outlined can serve as overarching

supports to encourage democracy to evolve in the right direction.

As a nation, we have come far – and there is no turning back to the way

things were. Change is unavoidable and permanent. Each and every

one of us has a stake in the future of our country. We must contribute to

ensuring that the change is constructive. All the forces of goodwill and

empathy that bind our society must come out into the open. We must

forge a collective vision that is progressive and contributes to change

that is constructive.

Democratic governance ultimately is a state of mind rather than some

tangible rule or procedure. Over and above the implementation of critical

reforms, moving forward towards a prosperous new normal requires that

we fundamentally change our way of thinking, attitudes, and mindsets to

embrace openness, a diversity of views, as well as values that support

societal change. Democratic governance opens up channels through

which the diversity in our society can come together to foster political,

economic and social development. It thus represents the most direct

route to true sustainability.

[ends]