A number of New Mandala contributors have noted the lack of rigorous evaluation of the various schemes that made up Thaksinomics. There has been some research on the 30 baht health scheme, but very little on the controversial economic stimulus schemes such as the one million baht Village Fund. Much of the commentary resorts to branding Thaksin’s initiatives as “populist” and then goes no further. I was very pleased, then, to read a 2004 report by John Conroy (of the Foundation for Development Cooperation) that dealt with the influence of Thaksinomics on “specialised financial institutions” (SFIs).
SFIs, to take one quote from the report, are “institutions established to provide various financial services to certain sectors of the economy. They usually work in markets that have not been adequately served by traditional financial institutions.” In Thailand the Bank of Agriculture and Cooperatives (BAAC) is a famous example.
Conroy pulls no punches about the impact of Thaksinomics on Thailand’s SFIs, including BAAC. Drawing ammunition from a number of local and international studies of Thai SFIs, he argues that “Thaksinomic policies of ‘easy money’ may have damaged Thai government banks and eroded the rural credit culture.” In his conclusion he writes:
While the Thaksin government has employed SFIs ostensibly for the purpose of meeting the financial needs of people who are not served by conventional financial institutions, it has neither developed credible models for such service provision nor encouraged a credit culture supportive of their sustainability. … In general, deliberate government action to create and support SFIs in the manner championed by Thaksinomics appears likely to be financially repressive.
And, according to Conroy, the impact is not limited to Thailand. One of the key aims of Conroy’s paper is to show how Thailand used APEC to promote the Thaksinomic vision, potentially undoing earlier valuable work (encouraged by Mexico) on micro-enterprise development and micro-banking:
A Thai study of SFIs published by APEC endorsed their engagement in ‘industry policy’, endorsed SFIs that prop up protected industries on grounds of ‘multi-functionality’ and endorsed SFIs providing subsidized credit. … Internationally, APEC’S Economic Committee may have been diminished by this episode while Mexico’s useful initiatives of 2002 have probably been denied reinforcement.
No doubt, there is much to debate in Conroy’s report. But it is a useful contribution to a more informed and sober assessment of policies of the Thaksin era. New Mandala is please to make it available to a wider audience.