Rising anger in Thailand's boom-to-bust northeast

Rising anger in Thailand's boom-to-bust northeast
A rice farmer collects snails and cleans the rice field near Udon Thani, Thailand.
PHOTO: Reuters

The rural heartlandof Thailand's deposed leader Yingluck Shinawatra and her exiledbillionaire brother Thaksin is hurting as a result of themilitary government's economic policies, stirring discontent andthe threat of protests.

The removal of generous agricultural subsidies has left ricefarmers in northeast Thailand struggling with mounting debts,and they will get little relief when they sell their crop incoming months with rice prices near an 8-year low.

Petty crime is on the rise and retailers are struggling. Thevast Platinum 168 shopping mall on the outskirts of theprovincial capital of Udon Thani was built during the boom, butit is now less than a third occupied and no longer chargingtenants rent.

"People are complaining about the rising costs of living, ofhaving no money for spending," said Teerasak Teecayuphan, themayor of the neighbouring provincial capital of Khon Kaen."Their patience will gradually run out. Sooner or later this potwill boil over."

Thaksin's "red shirts", many of whom hail from thenortheast, have punctuated a decade of political turmoil inThailand with protests on Bangkok's streets.

Military attempts to disperse 10 weeks of protests in 2010left scores dead and sparked the worst arson and rioting inThailand's modern history.

Thaksin has told his supporters to stay calm and "playdead", but some in Thailand's poorest region say it is only amatter of time before discontent overcomes fear of the militaryand people again take to the streets.

"People want to protest," said Sabina Shah, a local leaderof Thaksin's "red shirt" supporters in Khon Kaen.

"But we have to wait for the right trigger. If we come outnow in small numbers it's suicide. We are just lying low andwaiting for the opportunity - when the government argue amongthemselves."

The military toppled Yingluck's government in a May 2014coup and have zealously enforced a ban on political activity.

Both Shinawatras mobilised the rural poor to deliverlandslide electoral victories with a mixture of developmentprojects, social benefits and subsidies.

Many in the northeast, also known as Isaan, think they arepaying an economic price for their political allegiance.

Coup leader and Prime Minister Prayuth Chan-ocha representsa largely Bangkok-based establishment that reviles theShinawatras' populist policies and is threatened by their ruralsupport base.

His government has been austere in support for agriculture,which accounts for just under 10 per cent of the country'seconomy.

"It is quite bad for farmers, we have heavy debt," saidPursudar Koyto, in Ban Kampom, a village surrounded by verdantrice paddy fields nearly ready to harvest. "Prayuth's governmentcould have done more, like what they did in the Thaksin era."

While incomes improved under the Shinawatras, householdincomes in Isaan are still the lowest in Thailand at just over19,000 baht ($522.98) per month. That is less than half the43,000 baht of the Bangkok region, according to governmentstatistics for 2013, the latest data available.

MILITARY WARNS OF NATIONAL FALLOUT

The junta has now made an about-turn on policy to breathelife into a moribund economy and head off rising discontent.

Prayuth in August appointed Somkid Jatusripitak - one of thearchitects of Thaksin's policies - as his economic tsar.

Somkid has prioritised reviving the rural economy, whichemploys nearly 40 per cent of the workforce.

"They are suffering," he told Reuters in an interview. "Ifthese people don't have enough purchasing power it will hurt thewhole system."

Southeast Asia's second-largest economy has undershotgovernment targets. The central bank cut its GDP growth forecastto 2.7 per cent from 3 per cent on Sept. 25, and to 3.7 percentfrom 4.1 per cent for 2016. In 2014, growth was the slowest inthree years at 0.9 per cent.

Somkid has announced a raft of measures, including softloans through village funds, but the jury is still out onwhether he can spur more growth. Somkid said he would injectmore cash into the rural economy if needed.

WORSE TO COME

The signs of economic malaise in Isaan are widespread.Private investment, vehicle sales and property values have allfallen and farmers in the world's second-largest rice exporterexpect things to get worse before they get better.

Cash is already running out and many are selling cars andland to repay loans. Credit is scarce as banks tighten lendingto battle rising bad debt.

"I have to borrow to pay some debt back every year," saidrice farmer Khamkong Banphod, in the village of Ku Kaew nearUdon Thani.

"Those facing hardship are the people who invested a lot ofmoney and are now facing losses. They have their debt problemsand are angry with the government."

The margin for millers has been razor-thin since subsidiesended, said Somsak Tungphitukkul, who owns rice mills in KhonKaen province. Many mills cannot turn a profit and have beenmothballed or closed, he said.

"It's going to be a nightmare for the rice industry if thegovernment doesn't do something when the new crop comes in," hesaid.

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