RECENT ECONOMIC AND POLITICAL DEVELOPMENTS IN THAILAND

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00551R000200130013-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 20, 2016
• Document Release Date: May 8, 2007
• Sequence Number: 13
• Content Type: REPORT

Approved For Rel - 000200130013-0
Recent Economic and Political Developments in Thailand
Five months after surviving a coup attempt, Prime Minister
Prem Tinsulanon still faces a troubled political-economic scene.
A number of issues will test Prem's staying power: continued
military factionalism, the return of former Prime Minister
Kriangsak as a political force, or the emergence of an especially
difficult economic issue each has the potential to precipitate a
change in the government. 25X1
While Prem will remain vulnerable, recent developments have
added some stability to his domestic position. Prem has used
the annual military shuffle to solidify temporarily support in
the armed forces. Critics of his economic management remain
unorganized, and Kriangsak needs wider support at high levels
before he becomes a credible political threat. Finally, an
important factor maintaining Prem in office is the absence of
an alternative figure or group acce table to the palace and
the various military factions. 25X1
Political Variables
The April coup attempt left the military--Thailand's fore-
most power broker--uncommonly factionalized. The largest political
force in the country, the military is involved in every facet of
Thai political and economic life, and little can be accomplished
in the civilian sector without its acquiescence. The impetus for
the abortive coup came primarily from junior field-grade officers
and highlighted growing generational divisions within the military
elite. The plethora of factions does not represent clear-cut
divisions by age, ideology, or social background; they often
coalesce around a particular officer, while an one individual
can belong to more than one faction at a time. 25
X1
Members of all factions are trying to exploit the current,
unsettled conditions. Titular leader of the abortive coup Gen.
San Chitpatima has returned to the Senate. Some of the "Young
Turk" colonels who were the driving force behind the coup--and
were granted amnesty by Prem--have declared their support of
former Prime Minister Kriangsak. Others are reported considering
entering civilian politics to take advantage of popularity they
retain among the ranks, and a few clandestine coalitions reportedly
discussed mounting a coup against Prem earlier this year. We
know of no group, however, that possesses strength at
present to pose a serious threat to Prem. 25X1
Moreover, Prem has been able to use the just completed
annual promotions and transfers for senior Thai military officers
to solidify at least temporarily his support in the armed forces.
He has advanced professional and technocratic officers who tend
to follow the chain of command and should remain loyal to him.
Officers affiliated with the Young Turk group were generally moved to
 SECRET
Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
inactive positions. Some of the senior supporters of Kriangsak
were displaced in the shuffle. 25X1
Former Prime Minister Kriangsak's landslide victory in a
National Assembly--the elected house of parliament--byelection
in August eventually could add to the political difficulties of
the government of Prime Minister Prem. Kriangsak now can recruit
a considerable number of elected legislators to join his new
Democratic Nation Party, and he will receive some support from
members of the appointed Senate. Before Kriangsak can pose a
credible threat to Prem, the former Prime Minister will need to
overcome his low standing with the Palace--particularly the
Queen. Moreover, as a result of the recent military shuffle,
Kriangsak appearck strong support among the top levels 25X1
of the military.
Assembly. The largest of Thailand's four major parties, however
--the Social Action Party--no longer is included in the cabinet2.5
Although the King is concerned about Prem's poor performance
and by his attempts to use his palace connections to improve his
political position, any shift to another favorite is likely to be
gradual. The King probably will try to convince Prem to step down
before the general elections in 1983 if an acceptable alternative
can be found. If the royal coolness toward Prem becomes widely
known, however. aining support in the Army could erode
rapidly. 25X1
Weak Coalition -
Prem's coalition government is marked by disunity at the
top levels. It is made up, in part, of opposing political
parties selected to represent the balance of forces in the National
The government thus represents a minority of the legislature.
The appointed upper house--the Senate--is composed predominantly
of active and retired senior military officers dedicated to pre-
serving their social and economic status, who can be counted on
to resist any legislation that implies precipitous change. Its
members are directly selected for six-year terms by the prime
minister upon approval of the king. All of these factors combine
to prevent passage of legislat' to solve Thailand's economic
and political difficulties. II 25X1
Economic Problems
Since Prem took office in March 1980, he has personally
focused on Thailand's economic problems, but his ministers have
often been preoccupied with narrow political interests. As a
result, the Prem government made no headway against inflation in
1980 as the impact of higher oil import costs, drought-induced
food prices increases, and wage increases pushed inflation to a
20-percent rate, up from 15 percent in 1979. During 1975-78 in-
SECRET
Aooroved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
 Approved For Release 2007/9 RESIA-RDP83B00551 8000200130013-0
flation averaged less than 8 percent annually.
Poor export performance--largely a result
demand for rice, tin, and rubber--earlier this
internal debate over the need for import restr
of weak foreign
year produced an
of the IMF, the government devalued the baht, despite the opposition
of domestic Thai business interests and some within the Central
Bank. Prem was able to deflect most of the ensuing criticism by
blaming the IMF for the move. I 25X1
ictions to stem
the deterioration in the current account. Instead, at the urging
- The Prem government has succeeded in gaining public acceptance
of periodic utility and oil price increases mandated by inter-
national financial institutions in return for development credits
and balance of payments support. The World Bank, in fact, has
stated that the government has made substantial progress toward
achieving realistic domestic oil prices, and the IMF has supported
the Bank's optimistic assessment by agreeing to a two-year $940-
million stand-by credit. In return, the Prem government agreed
to tighten fiscal and monetary policies, and to enact measures
aimed at boosting agricultural productivity and shifting industrial
developmen n emphasis on import substitution to export
promotion. 25X1
Persistent pressure from the IMF and the World Bank should
result in gradual structural changes in the economy, but the
results will be barely visible within the next few years. More-
over, if economic conditions deteriorate to the point where
adhering to the IMF's performance criteria threatens entrenched
business interests, the reform package could be quickly discarded.
In the meantime, the country's strong agricultural resource base
will continue to cushion Thai politicans from their failure to
push harder for export-oriented industrial development. I 5X1
Aprroved For Release 2007/08 . 6A-RDP831300551 R000200130013-0
 Approved For Release 2007/05/ OA R000200130013-0
Military Situation Along The Thai-Kampuchean Border
The military situation along the Thai-Kampuchea border is
generally quiescent. Thai leaders are highly concerned, however,
over the potentially serious external threat posed by the deploy-
ment of umbers of Vietnamese troops along their eastern
border. n 25X1
During the rainy season, Vietnam's 150,000 to 180,000 troops
in Kampuchea have been under steady and occasionally intense
pressure from resistance forces. In areas along the borders of''
Laos and Thailand as well as central and eastern Kampuchea, Viet-
namese forces in largely defensive positions have been unable to
protect their supply and communications lines. Similarly, they
have been unable to close infiltration routes that Pol Pot's
Democratic Kampuchea forces are using to move from Thai sanctuaries
to inside Kampuchea. Now that the rainy season is ending, the
Vietnamese have increased operations throughout much of the country,
and they have begun upgrading their forces along the Laos-Kampuchea
border in a move to counter DK forces active in that area.
One Vietnamese division near the Thai border has also been
strengthened and has resumed its efforts to block DK forces moving
from Thailand into Kampuchea. Elsewhere along the Thai-Kampuchean
frontier, the Vietnamese are continuing their cross-border probing.
s in an effort to keep the pressure on resistance forces 25X1
Vietnamese operations along the border have led to several
incidents involving Thai forces. In mid-September, Vietnamese
forces reportedly attacked a DK force and a Thai special forces
unit, which provides logistical support to the insurgents operating
opposite Thailand's Trat Province. The Vietnamese have also
launched occasional artillery and rocket barrages against insurgent
.positions on both sides of the Thai-Kampuchean frontier and, in
some instances, Thai military positions and villages have been
hit. 0 25X1
 Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
ASEAN AND TIE INDOCHINA REFUGEES: A TOUGHER LINE
25X1
The ASEAN countries most directly affected by the
Indochinese refugee outflow--Thailand, Malaysia, and
Singapore--are beginning to toughen their policies on
accepting refugees. Indonesia and the Philippines are
more sympathetic and are likely to maintain their pres-
ent cooperative first asylum policy as long as countries
of final resettlement--especially the United States--
continue to guarantee acceptance of all refugees.
25X1
ASEAN countries believe the time has come to stop
the exodus at the source and want Washington to take
the lead. Their fears are based on the belief that:
-- Current policies pursued by all parties in-
volved--the UN High Commission on Refugees
(UNHCR), first asylum countries, and final
resettlement countries--encourage refugees
to leave by offering permanent relocation in
the West, where life is-infinitely better than
in Vitnam, Laos, or Kampuchea.
-- The debate in the United States over the admit-
tance of Cuban and Haitian refugees may lead
to a halt or cutback.in the US acceptance pro-
gram. If other Western countries did likewise,
ASEAN would become permanently burdened with
large numbers of refugees. This could create
serious domestic problems in Malaysia and Thai-
land, where public sentiment runs strongly
against the presence of refugees.
-- There are no longer any compelling humanitar-
ian reasons to accept refugees because most
are leaving for economic reasons and not be-
cause of political persecution. Given the
appalling state of the economy in Vietnam,
Laos, and Kampuchea, the refugee outflow
could continue indefinitely. 5X1
 Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
nes.s. the -Led
accepguaaran
States and other countries to renew renew
tees-for final resettlement. If the policies areimple-
mented, the effect will be to dampen but not completely
deter the refugee outflow. Vietnamese boat refugees
demonstrated over the past couple of years a remarkable
determination to flee regardless of the dangers involved.
They would, however, be forced to remain longer on the
high seas and be more exposed to the hazards of pirates
and weather. In any event, the number of boat. refugees,
which rose sharply in the first six months of 1981, will
probably decrease from now until early 1982 because of
unsuitable wpAthp-r and tightened security measures inside
Vietnam.
25X1
F I
On the other hand, land refugees from Laos and
Kampuchea seem already to have been deterred by a harden-
ing Thai repatriation and camp relocation policy--aided
by a temporary improvement in internal conditions and by
the blocking of refugee traffic by Vietnamese/Heng Samrin
troops--and the number of overland refugees dropped off
sharply this year. Nevertheless life inside both coun-
tries remains unstable and unpredictable. The borders
with Thailand are longrand porous; even if Bangkok
makes refugee facilities inside Thailand as unattractive
as possible, refugees will continue to flee when com-
pelled by factors suc3'i as the unavailability of food,
disruptive military or guerrilla activity, olitical
repression, and economic mismanagement. 25X1
Thailand
Of the ASEAN countries Thailand has the largest
number of refugees inside its borders and is the most
likely to be affected in case of another refugee crisis.
Bangkok recently announced tough new measures to dimin-
ish the attractiveness of Thailand to those seeking ref-
uge. It says it will approach the Voice of America and
the British Broadcasting Corporation to assist in spread-
ing word of its new policies:
-- It will close several Vietnamese boat refugee
camps on 15 August.
-The ASEAN countries concerned may have floated
their new policies in part to try to
 Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
Thereafter new arrivals will be ineligible for
asylum or resettlement and will be held in a
centralized "austere" camp before being re-
patriated to Vietnam.
-- It will close the Nong Khai camp for Lao ref-
ugees and re ate it in the more remote a'C1
of Ubon.
F
Bangkok apparently has not coordinated its new
policies with its neighboring ASEAN partners. if the
new measures are implemented, Malaysia and Indonesia
will be upset because boat refugees pushed off from
Thailand probably would end up on their shores. xi
Thailand ultimately wishes to repatriate Kampuchean
and Lao refugees to their homelands. Bangkok may fear
that a continuing flow of refugees would leave Kampuchea
and Laos underpopulated, opening the possibility that
these countries could then be settled by colonists from
Vietnam. In the Thai view, this would add to the Doten-
tial for Thai-Vietnamese conflict in the future.
Malaysia
Malaysia sees its problem compounded by the fact
that Thailand map'already have started pushing off ref-
ugee boats, and Sringapore may close its camp later this
year. Kuala Lumpur is looking at new options, although
none is being considered for early implementation:
-- Establishing a moratorium on accepting new
arrivals.
-- Setting a firm date after which all new boat
arrivals will be pushed off.
-- After a certain date repatriating to Vietnam
A, 1 s at present in Malaysian camps.
25X1
Singapore
Singapore has never been a country of first asylum;
it has only accepted for transit purposes those Viet-
namese refugees from camps in Malaysia, Thailand, or
 Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
Indonesia, and from ships that pick up refugees on the
high seas, who have been guaranteed passage to countries
of final resettlement. Singapore recently told a UNHCR
offrcial that it-will close down the Hawkins Road transit
camp as of 31 December and thereafter get out of the ref-
ugee business altogether. Apparently it will allow the
UNHCR to arrange private accommodation for small numbers
of refugees who ar teed transit to final reset-
tlement countries.) I 25X1
Indonesia and the Philippines
Jakarta and Manila are likely to continue their
present liberal first asylum policy as long as the
United States and other Western countries guarantee to
take all refugees for final resettlement. Indonesia
and the Philippines have been more sympathetic to the
plight of the refugees than have Thailand, Malaysia, or
Singapore. In Indonesia the refugee camps are located
on remote outer islands and have little direct impact
on the Indonesian people. Similarly, because the com-
paratively small numbers of boat refugees who arrive in
the Philippines directly from Vietnam do so in the south,
the refugee issue is not a public controversy. Both
countries will continue to operate their refugee proc-
essing centers--Galang in Indonesia and Bataan in the
Philippines--although hJakarta has refused to expand the
c
apacity on Galang frbm 10,000 to between 15,000 and
20,000 for fear the move might attract more refugees.
Vietnam
The expulsion of refugees from Vietnam remains a
devastating weapon for Hanoi if it wants to destabilize
ASEAN countries. There are still thousands of potential
refugees in Vietnam, both Vietnamese and ethnic Chinese,
who would leave the country if given the chance. A
current joke in Vietnam claims that "if telephone and
elect il es could grow feet they would try to leave
too."u
Hanoi could use the refugee weapon for political
blackmail. A Vietnamese Deputy Foreign Minister re-
portedly remarked to a Hanoi-based diplomat last month
that Vietnam would not accept repatriation of refugees
except as part of an overall political settlement in the
 Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
region--presumably meaning recognition of the Heng Samrin
regime in Phnom Penh and the cessation of outside aid to
Khmer resistance groups. The United States, other West-
ern countries, and ASEAN can do little either politically
or economically to bring immediate pressure to bear on
Vietnam to accept its refugees back or to stop the
exodus. 0 25X1
Nevertheless, Hanoi is apparently trying to enforce
increased measures to prevent illegal departures. In-
ternal security officers have stepped up land and sea
patrols, penetration of groups likely to try to flee,
and surveillance of corrupt cadres, boat pilots, and
marine mechanics. Escape is becoming more dangerous;
escapees who are caught are given three years in prison,
and some escape organizers have been given life sentences
or executed. 25X1
Corruption in Vietnam, however, remains rampant,
and escapees can get out if they have the money and
determination. Flourishing escape organizations in
Vietnam use middlemen in the United States, Hong'Kong,
and elsewhe.'-e to collect money from overseas Vietnamese
or ethnic Chinese to purchase places on boats for friends
and relatives. False documents can also be purchased for
Vietnamese wishing to land journey across
25X1
Kampuchea to Thair'land.
1
W
It is difficult to differentiate between "political"
and "economic" refugees except perhaps by means,of an
arbitrary, capricious definition. Recent random surveys
of Vietnamese boat arrivals in Malaysia and Hong Kong
suggest the refugees fled because of a mix of factors:
-- Increasing numbers of highly motivated, anti-
Communist former officials of the pre-1975.
government in South Vietnam are being re-
leased from "reeducation" camps and want to
get out of the country.
-- Many young men in the south want to avoid con-
scription. Many would be assigned after mini-
mal training to serve in Kampuchea under north-ern officers. Most have no desire to partici-
pate in Hanoi's expansionist adventure in
Kampuchea.
 Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
-- Economic conditions are deteriorating. Many
refugees leave because they hear over the
radio--from the VOA, the BBC, and the Austra-
lian Broadcasting Corporation--and also from
relatives and friends already resettled over-
seas that the prospects for economic betterment
and political freedom in the especially
the United States, are good. 25X1
The orderly departures program for relatives of
those already resettled, set up at the 1979 international
refugee conference in Geneva, is still in effect but pro-
ceeds slowly. A charter plane leaves once per week out
of Ho Chi Minh City. The approximately 1,000 persons who
leave monthly in this t in
the refugee problem.
 Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
THAILAND: COMMUNIST INSURGENCY FACES DECLINE
0
The pro-Chinese Communist Party of Thailand (CPT),
while still able to carry out terrorist activities, faces
declining support from both internal and external sources.
Bangkok's cooperation with Beijing against Hanoi and
China's decision two years ago to stop supplying the CPT
have drastically lessened the party's ideological impe-
tus as well as its material stores. Furthermore, the
external Communist threat created by the presence of
Vietnamese troops on the Thai-Kampuchean border has
reduced sympathy among rural residents for antigovern-
ment insurgents.
The government claims there are about 10,000 Com-
munist insurgents in Thailand, but this. figure has not
changed for years and is probably too high. The CPT is
organized on regional lines, with little national-level
coordination, and its leaders probably have no idea of
the total number themselves. Although most members are
ethnically at least part Chinese, they range from ideo-
logically motivated university students to bandits seek-
ing a legitimizing banner.
The number of defections from Communist ranks cur-
rently is at an all-time high. The abysmal living condi-
tions of the insurgents is a major factor, as is the
ideological identity crisis caused by China's de facto
alliance with the Thai Government. Last June, CPT
representatives--in an attempt to bestow political
legitimacy on the outlawed party--asked the government'
to allow their organization to cooperate in a united
front against the Vietnamese. The proposal was rejected
out of hand. instead, the government reiterated its
demand that the Communists surrender and accelerated its
armed operations against them.
The CPT poses no immediate threat to the stability
of the Thai Government but is viewed as a "festering
sore"--unsightly and potentially dangerous if left
 Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
untreated. Counter-insurgency continues to be the primary
concern of Thai security forces. The government fears the
development of a pro-Vietnamese wing of the CPT, even though
the predominantly Chinese ethnic background of most of
Thailand's Communists militates against this. Bangkok
also fears the party will shift to recruiting urban ter-
rorists. Although the recent discovery of arms caches
in Bangkok suggests that this situation deserves watching,
urban residents so far seem resistant to the Communist lure.
In the rural areas, an increasingly enlightened ap-
proach by the government to provincial administration is
lessening the popular appeal of Communist doctrine. Offi-
cials are urged to avoid the imperious and exploitative
attitudes of the past and to develop an understanding of
local problems. Although the regime's new ideal still has
a long way to go to achieve reality, the gesture toward
better relations seems genuinely appreciated.
Counterinsurgency techniques developed under General
Prem--who appears sensitive to regional difficulties--
have also helped the government advance its campaign. Of
particular'value is the "carrot and stick" approach,'al-
ternating military pressure with leniency in welcoming
insurgents back into toe fold. Rank-and-file insurgents
are urged to.surrender and generally are treated gently..
Usually only a perfunctory period of surveillance precedes
their return to society. More renowned Communists may
.almost become celebrities, sometimes working for the
government afterward. Although there is considerable
recidivism--one provincial official estimated that 80 per-
cent of all who give themselves up eventually go back
to the jungle--the public relations value to the govern-
ment is high, plus there is a net decrease in the number
of Communists.
A dedicated hard core of insurgents is likely never-
theless to persist despite anything the government does.
They will remain capable of engaging troops in firefights
in remote areas and conducting terrorist activities such
as railway and urban bombings. Desperate acts of terrorist
violence, however, while straining the country's security
services, are likely to further discredit the Communists
in the eyes of the people.
Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
 Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0
Approved For Release 2007/05/08: CIA-RDP83B00551 R000200130013-0