Crafting Thailand's new social contract

Abstract

This paper assesses the rise of the Thaksin Shinawatra government in Thailand. It examines this in terms of the social impacts and political ramifications of the Asian economic crisis. It is argued that the economic crisis threatened the economic and political power of domestic capital and smashed the developmental social contract that had underpinned growth since the 1960s. The social and economic policies of Thaksin's government are intimately related to domestic capital's struggle to re-establish its competitiveness and profitability. In order to ‘buy’ the social and political order required for this restructuring, the Thaksin government saw the need to construct a new social contract involving a number of policies that establish a higher level of social protection than ever considered possible in the past. The cases of soft loans to villages and a universal healthcare scheme are considered.