Thousands of Thais Protest Bangkok’s Inaction in Crisis – NYT, October 22, 1997
[Thanks to Tom pointing this out.]
…”Thousands of people rallied in the streets of Bangkok for a second day today, furious at their Government’s vacillation in the face of a severe economic crisis. Farmers and factory workers in sandals, bankers and stock brokers in neckties — people from both sides of Thailand’s sharp economic divide mingled in the hot sun to demand the resignation of Prime Minister Chavalit Yongchaiyudh.”
“The demonstration today followed an extraordinary rally by businessmen that closed off Silom Road, home to many banks and financial institutions. It was the largest rally by the middle class since mass protests in 1992 that led to widespread violence and caused the fall of a Government…”
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I remember well and believe the whole world should reflect on a moment when an economic meltdown that could have plunged a region into a decade of stagnation went the other way. The ‘Tom Yum Goong’ crisis was probably the best managed downturn in economic history, because the antidote — implemented swiftly and without mercy — was to LET THEM FAIL. The IMF and World Bank wouldn’t let the Thai government continue to prop up reckless financial institutions and rapacious speculators — and the whole region would emerge the stronger for it in the decades to come. So, instead of continuing to kick the can down the road for the 2ND YEAR, dragging the rest of the world into their morass, why can’t the EU and ECB do what needs to be done and let irresponsible lenders fail, and thoughtless borrowers deal with the consequences? You didn’t hear any of the engineers of the ’97 “austerity packages” (ironically, many of the same folks who were behind the 2008 US bank bailouts) hem and haw about the risks to regional stability (nor change course when it was clear Suharto was a goner), or fret about crooked developers going bust (or to jail), or agonize over what would become of rice farmers and street vendors. They brought in the scalpel, cut the toxic assets out of the system, forced tens of millions of people to pull up their pants and save. And turned an economic meltdown into the road to one of the biggest booms in middle class growth (and in Thailand, a phenomenal spike in SME activity that has profoundly transformed the culture) in Southeast Asia’s history. With that kick in the ass, Thailand, did an exemplary job of coming out of the crisis. Policymakers in Paris, Frankfurt and Berlin ought to take note: what they are doing now is just damming up what is going to be a devastating flood when the sluice gates burst.