Thailand’s secret story: the battle for a $37b royal estate

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/Thailand’s secret story: the battle for a $37b royal estate #ThaiCoup http://www.afr.com/p/world/thailand_secret_story_the_battle_QcvSA6u4clBHmLTFPLFQNJ … via @FinancialReview

//Police march past a portrait of the king on their way to deal with anti-coup protesters in Bangkok on Thursday. The kingdom’s archaic and draconian lèse majesté law forbids any comment about the royal family deemed insulting or disrespectful. Photo: Reuters

BREAKING — Crown Prince Vajiralongkjorn returning to Thailand. After staying in the luxury Tylney Hall hotel in the English countryside during the coup with an entourage of 30 people, he moved to the Landmark Hotel in London. He left there yesterday to return to Bangkok, possibly via Munich.

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ANDREW MACGREGOR MARSHALL : 31-05-2014
A week after Thailand’s army chief shocked the international community and plunged the kingdom deeper into turmoil by suddenly seizing power, the junta is increasingly isolated and desperate – and dangerous. Unprecedented protests have been staged on the streets of Bangkok. Scores of Thai academics and journalists have fled the country. Others were detained by the military and have not been heard from since. Independent media have been silenced, and the generals even briefly shut down Facebook, provoking outrage from Thailand’s millions of social media users.

Struggling to justify its overthrow of the government – the 14th successful coup since 1932 – the junta has claimed it was trying to save the kingdom from calamity after six months of destabilising street protests and political paralysis. “A clash was very likely and if a clash were to happen, it might lead to a civil war,” army deputy chief of staff Lieutenant General Chatchalerm Chalermsukh told foreign journalists on Thursday. “The security agencies involved said they could not let Thailand go down that path.”

Some foreign analysts take these claims at face value. “This latest political development should help end the deadlock soon,” said Singapore-based brokerage UOB Kay Hian. Citibank analyst Kritapas Siripassorn told clients that “military intervention may prevent outright violence in the near term”. BNP Paribas analyst Philip McNicholas said the coup “has raised the prospect of a swifter end to the latest bout of political turmoil”.

These comments betray a profound ­misunderstanding of the nature of Thailand’s conflict. In fact, the coup has further destabilised the troubled kingdom, and the prospects of a peaceful resolution are ­rapidly dimming.

Thailand’s worsening political turmoil since 2005 baffles most analysts. One reason for the confusion is the complexity of the ­crisis – multiple parallel conflicts are being fought in 21st century Thailand. There is an important geopolitical dimension – the United States and China are battling to become the most influential foreign power in the kingdom. There is also a regional ­element to Thailand’s turbulence – the Bangkok elite and residents of the relatively wealthy southern provinces, broadly under the moniker Yellow Shirts, resent the electoral clout of Thais in the poorer north and northeast of the country, broadly aligned under the banner of Red Shirts.

The main conflict raging in contemp­orary Thailand is a struggle between rich and poor, similar to developing countries all over the world where an entrenched ruling oligarchy is being challenged by increasingly assertive and informed ordinary citizens who want a greater share of political power and economic wealth.

But the main reason Thailand’s crisis is so poorly understood is that a crucial part of the story is routinely left out. The 86-year-old King Bhumibol Adulyadej is frail and ailing, and an unacknowledged war over the royal succession is being waged by competing factions of the elite. At stake is control of the vast royal fortune, estimated at more than $37 billion. Whichever side wins the struggle to play kingmaker will potentially be able to dominate Thailand politically and economically for years to come. This is why the conflict is so bitter and vicious.

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DRACONIAN LÈSE MAJESTÉ LAW

The reason that this essential element of Thailand’s turmoil is so rarely reported is that the kingdom’s archaic and draconian lèse majesté law forbids any comment about the royal family deemed insulting or disrespectful. Journalists, academics and analysts writing about Thailand’s crisis face an extraordinary dilemma – it is impossible to accurately explain the situation without breaking Thai law. “Amidst all this political manoeuvring, the real issue preoccupying Thailand’s political elite cannot be written about by the local press or indeed by sell-side research because of Thailand’s lèse majesté laws,” wrote CLSA managing director and chief strategist Christopher Wood in his Greed & Fear investment newsletter earlier this month. “This can be referred to as the ‘great unspoken’.”

The designated heir to the Thai throne is the 61-year-old Crown Prince Maha ­Vajiralongkorn, a controversial figure long feared by many Thais and reviled by the royalist elite. For decades, establishment grandees have dreaded the prospect of the prince one day becoming King Rama X, and have sought to sabotage his succession prospects.

The political rise of former telecommunications tycoon Thaksin Shinawatra, who won a thumping election victory in 2001, posed a dual threat to the old elite. First, Thaksin’s mass support was built on populist policies aimed at improving the welfare of the rural poor, who had always been ignored by the political class, and so threatened Thailand’s traditional oligarchy. Second, Thaksin allied himself with the crown prince, planning to play kingmaker when Bhumibol died. A new elite seemed destined to supplant the old, with Thaksin and Vajiralongkorn set to secure political and financial supremacy thanks to the votes of the rural poor and the riches of the palace.

After Thaksin won an unprecedented second general election landslide in 2005, the paranoia of the old elite became full-blown panic. Royalist elder statesmen launched frantic efforts to undermine Thaksin, in alliance with a middle class street movement – (the so-called Yellow Shirts). In their public rhetoric, Thaksin’s enemies focused on his alleged corruption. But their unspoken fear – taboo to mention because of the lèse majesté law – was that after Bhumibol’s death, the existing social order in Thailand would be upended, with the old elite eclipsed by allies of Thaksin and the crown prince.

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SABOTAGING THE ROYAL SUCCESSION

Thailand’s parliament has historically been a very weak institution, with real power held by the royalist bureaucrats, tycoons and generals, who wield immense informal influence behind the scenes. But it plays an important role in the royal succession process – for decades, Thailand’s repeatedly rewritten constitution has specified that when the current king dies, his successor should be formally proclaimed by parliament. To have any chance of sabotaging the royal succession, Thailand’s old elite has to ensure it has control of parliament when Bhumibol’s reign comes to an end.

This is why Thailand’s traditional establishment has fought so ferociously since 2005 to crush Thaksin’s political influence and prise parliament from his grip. Royalist generals overthrew him in a coup in 2006, but failed to stifle his political clout. Thaksin remains a hero to millions of ordinary Thais, and in general elections in 2007 and 2011, his political proxies won control of parliament with ease. Thaksin’s elite enemies resorted to ever more desperate tactics to try to defeat him. In mid-2008, royalist judges toppled a prime minister allied to Thaksin for accepting nominal payments to appear on a cooking show on Thai television. Later the same year, Yellow Shirt protesters shut down Bangkok’s airports, the judiciary dissolved the government yet again, and royalist generals oversaw the installation of a royalist government headed by Abhisit Vejjajiva.

In 2011, Thaksin regained the upper hand in the struggle, when his younger sister Yingluck was elected the first female prime minister in Thai history. The old elite launched a prolonged campaign to bring down her government, and when Yingluck called a snap election to reassert her mandate, royalist mobs blocked polling stations to prevent Thais from voting. The judiciary later annulled the election and removed Yingluck from power, but Thailand’s royalist elite remained unable to gain control of parliament – until the military seized it by force last week.

Fixated on the royal succession struggle, and oblivious to how much Thailand and the wider world have changed, the royalist establishment and military have failed to understand the immense anger they have caused by repeatedly overthrowing elected governments and defying the wishes of Thai voters. Millions of poorer Thais are incensed by these developments, and have formed a mass movement to fight for their rights – the Red Shirts. Rural Thais are no longer willing to be obedient serfs following the wishes of the aristocracy. Emboldened by social media, community radio and wider contact with the world beyond their villages, they are demanding that their votes be counted and their voices be heard. As events in 2014 have shown, the old elite and their allies remain incapable of winning elections, and so are determined to snuff out Thai democracy.

This is the key to understanding Thailand’s tragic turmoil. A struggle for demo­cracy has become entangled with a royal succession conflict. Ironically, many Red Shirts and Yellow Shirts agree on far more than they disagree about. They want honest and competent governance. They have had enough of corrupt and self-serving politicians. They want fair rule of law, and an end to double standards. They want Thailand to be a stable and prosperous kingdom.

But while King Bhumibol remains alive, Thailand’s divisions will continue to fester. There is too much money and power at stake for the kingdom’s feuding elite factions to find a compromise now. Their struggle will not end until after the royal succession.

The coup does not mark the end of the turmoil, just the latest phase in a high-stakes war that is far from over. As veteran Credit Suisse analyst Dan Fineman observed in a research note following the putsch: “We still see no clear end game for Thailand’s political conflict.”

Andrew MacGregor Marshall is a journalist focusing on Thailand who has reported from outside the country since 2011 after choosing to violate the lèse majesté law in order to tell the full story of Thailand. He is the author of A Kingdom in Crisis, a forthcoming book.