Thaksinomics (a portmanteau of "Thaksin" and "economics") is a term used to refer to the economic set of policies of Thaksin Shinawatra, the 23rd prime minister of Thailand from 2001 to 2006. There has been considerable controversy over the role Thaksinomics has played in Thailand's recovery from the 1997 Asian financial crisis. Among the most prominent advocates of Thaksin's economic policies is Morgan Stanley economist Daniel Lian. Thaksinomics combines neoliberalism with Keynesianism. The term was coined by the Philippines president Gloria Macapagal Arroyo during the 2003 Nikkei in which she explained how she conducted her economic policy by following Thaksin's "domestic consumption-based (and) managed asset reflation".
Overview Thaksinomics is a dual-track policy where one portion of the economic policy concentrates on foreign investment and trade. Meanwhile, the other portion is a collective of populist policies crafted to reduce poverty and strengthen small/local businesses. The idea behind this strategy was to develop and industrialize Thailand by financing and strengthening local industries. As Thailand would gain more capital, it would then increase GDP per capita and, over time, be redistributed to the poor of the nation. This would create a positive loop, where as the nations grow, the citizens would become wealthier and hence choose to engage with the economy more and more, creating a positive feedback loop. Needless to say, Thaksinomics was based on the Keynesian belief that controlling monetary controls would be able to return aggregate demand. The policies succeeded in growing the nation in terms of capital, but the effect of populist policies on relative poverty is debated. The policies of Thaksinomics have included:
A four-year debt moratorium for farmers, combined with orders to Thailand's state-owned banks to increase loans to farmers, villages and SMEs (small and medium-size enterprises) at low interest rates. Subsidized transportation vehicle fuel prices, starting January 2004 in order to alleviate the impact of rising world oil prices on consumers. The government also forced the state-owned electricity company EGAT to partially subsidize electricity tariffs. Creating cartels or consortiums to increase the price of exports. (Such as in the rubber industry)[1] In the policy of public health, Thaksin started the 30-baht universal healthcare program, which guarantees universal healthcare coverage for just 30 Baht (about US$0.95) a visit at state hospitals. Although highly popular, especially among lower income Thais who were previously denied healthcare because of their income, the policy was strongly criticized by physicians. The One Tambon One Product (OTOP) program, which stimulates the development of rural small and medium-sized enterprises. Thaksin has pushed for continued privatization of state-owned enterprises. Although it is a continuation of the Democrat-initiated policies of the late-'90s, Thaksin has consistently pushed for the privatization of the state-owned electricity company EGAT. However, EGAT is still state-owned. "Mega Projects": During Thaksin's tenure, this involved investing over $50 billion in public infrastructure, including roads, public transit, and a new international airport.
Supporters of Thaksinomics argue that these policies, implemented in the aftermath of the Asian Financial Crisis, have driven a stable, demand-driven recovery of Thailand's economy, which was previously dependent on exports, making it vulnerable to external shocks. They also point out that under the Thaksin administration, Thailand has repaid all of its debts to the International Monetary Fund (incurred after the Asian Financial Crisis) four years ahead of schedule. These policies have made Thaksin Shinawatra popular. After an unprecedented four years as prime minister, his populist Thai Rak Thai party won a landslide victory in the February 2005 elections, winning 374 out of 500 seats in Parliament. This was the largest number of parliamentary seats ever gained by a single party in Thailand's history. Critics of Thaksinomics claim that Thaksin's economic policies amount to little more than traditional Keynesian fiscal stimulus policies rebranded as a revolutionary economic doctrine. They argue that, contrary to the claims of Thaksinomics's advocates, Thailand's economy was actually driven by rising export demand, while domestic consumer demand has grown only modestly at best since Thaksin became Prime Minister. Skeptics also note that under Thaksin's policy of pushing state-owned banks to increase loans to poor farmers, consumer indebtedness has risen dramatically. They state that the banks often made loans without proper due diligence to people who had little means to repay the loans. Thaksin's supporters often counter by pointing out that the percentage of non-performing loans in the banking system has fallen during his administration.
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