Social reforms have been a woefully low priority throughout Asia. In Thailand, as elsewhere, economic restructuring and legal reforms must be accompanied by a more fundamental rethinking of how we do things. But social reform is such a sensitive issue that governments would rather sidestep the topic. This reluctance to address social reforms is worrisome.
In Thailand, four social evils, namely cronyism, collusion, corruption and complacency, have spread to all levels of the society. Cronyism led to the unchecked growth of ill-conceived and highly speculative projects. Corruption allowed noncompetitive players to thrive. Collusion between businesses and government officials has allowed these debilitating practices to prosper.
Perhaps more damaging is the complacency generated by decades of economic growth and restricted competition. Before the crisis, Thai leaders were too busy congratulating one another on Thailand’s prospects for joining the ranks of the newly industrialized countries. Many sectors of the economy believed that Bangkok would soon become another regional hub, and even provide serious competition to Singapore and Hong Kong. It was an unrealistic dream.
These perverse social values must be recalibrated. Otherwise restructuring will be ineffective and economic gains short-lived. Bankers must resist the temptation to simply give their industry a new facade. They should strive for proper risk-management principles, as well as a strong dose of ethics.
If the rule of law remains weaker than the rule of men, Thai businesses will return to their old ways. Well-connected and prominent individuals seem to have time on their side when it comes to legal prosecutions. Sometimes they get away with out-and-out crime.
Change must begin with the civil service and education systems. Protests by employees of state enterprises against the government’s privatization plans illustrate the urgency of civil-service reform. Well-placed officials are afraid of losing opportunities to extract graft, commissions and special privileges from corporations and citizens who rely on their good will. The civil service is a hotbed of the four evils.
Civil servants, military and business leaders are the products of a deeply flawed education system. To teach new generations of Thais how to think and how to get things done, we must scrap an educational system that places emphasis on rote learning. Teachers should reward values such as honesty, hard work, patience and respect for the rule of law.
Learning how to meet international standards will be a long-term and difficult process. The same challenges haunt the whole region. The rule of law and competition must prevail to ensure that restructuring gains are preserved. Without fundamental changes in social values and behavioral norms, business and government agencies will quickly revert to their old ways.
