institution to oversee private investment.65 The basic idea of this strategy, Suehiro argued, came from the US National Economic Committee, led by Rostow, which proposed the "economic development" strategy as a countermeasure against growing communist movements.66 In applying Rostow's strategy generally in the Southeast Asian region, the US was particularly concerned with the security question. It feared the spread o f communism, certainly far more so than did the Thai government. Thailand was of key strategic importance and therefore became the main aid recipient of the US in the region.67
Even though the First Plan was not formalized until 1961, preparations had begun in the late 1950s. Sarit pre-empted much of the First Plan by putting in place a number o f Revolution Party Proclamations to set the political scene for the implementation of the Plan without challenge from interest and pressure groups. These Revolution Party Proclamations aimed to legitimize the implementation of the First Plan instead of passing through the process of parliament.68
The IS I strategy is reflected in the First National Economic Development Plan (in two phases covering 1961-1963 and 1964-1966) initiated under the Sarit regime (1958-1963) and the Second National Economic Development Plan (1967-1971) under the Thanom-Prapass regime (1963-1973). In order to "raise the standard of living of the people of Thailand" the First Plan set out to achieve an increase in GNP which it expected would be "equitably distributed ... [to] all citizens and not merely a priveleged few derive benefit from it".69 To do this, the Plan proposed to encourage economic
Grit, op. cit.. pp. 118-119. Apichai and Montri added that, following the report of US investment survey team, the Thai government revised the Investment Promotion Act in 1960 and then in 1962. As a consequence, the private investment from the US increased 34 per cent during 1960 and 1964, and 44 per cent during 1965 and 1972 [Apichai and Montri, op. cit.. p. 33].
Suehiro, op. cit.. p. 179.
For example see A. Caldwell, American Economic Aid to Thailand. Lexington: Lexington Books, 1974 and Rotter, op. cit.. pp. 76-79
For instance, the Revolutionary Party Proclamation No. 33 facilitated private and foreign investment (Royal Gazette B.E. 2501 (1958), Part 103); followed by Proclamation No. 47 to promote foreign investment (Royal Gazette B.E. 2502 (1959), Part 7); Proclamation No. 49 repealed the Limited Land Tenure Act of B.E. 2497 (1954) (Royal Gazette B.E. 2502 (1959), Part 8); Proclamation No. 19 of 30 October B.E. 2501 (1958) abolished the Labour Act of B.E. 2499 (1956) as well as the Land Code of B.E. 2497 (1954) [Kotmai Thi-din B.E. 2497]. In addition, following Beitzel, an adviser from the United States Operation Mission (USOM), the revision of the Investment Promotion Act of B.E. 2503 (I960) authorized the Board of Investment (Bol) to conduct overall industrial promotion. This act was later revised in 1962. See Apichai and Montri, op. cit.. pp. 33-34; and Suehiro, op. cit., pp. 179-180.
The National Economic (and Social) Development Board (NEDB/NESDB) The National Economic Development Plan (1961-1966k Second Phase (1964-1966). Bangkok: NEDB, Office of the Prime Minister, 1964, p. 9. The NEDB (later changed to be NESDB in 1972) was set up in 1959 for making and carrying out the development plans. It is under the
growth in the private sector supported by government programmes which would provide means and opportunities for increased production and enable the private sector to further expand on its own initiatives.70 The Second Plan had similar aims of "... strengthening the efficiency and growth of the private sector, maintaining a stable monetary environment, and making more effective use of the substantial investment in national infrastructure under the First Plan".71 As a result of the Plans, Thailand enjoyed an increase of GNP of seven per cent per annum,72 one per cent more than the annual target growth rate of GNP proposed by the first UN "Development Decade" of the 1960s. The ISI strategy, which the Bank argued would help the government remedy the balance of payments and trade problems, remained the predominant strategy for Thai economic development throughout the 1960s.
However, in terms of domestic politics, the ISI strategy seemed secondary to the support o f the US which satisfied both the US security concerns as well as the am bitions of the Thai m ilitary regime of Sarit to remain in power. Besides the elimination of his political enemies, especially the Phibun and Phin-Phao groups, Sarit gained military, political and economy support from the US especially through two programmes of development. One was the programme of Mobile Development Units (M DUs) to help develop the Thai army. The other was the A ccelerated Rural Development (ARD) Programme to help support the civilian administration and develop the Northeast region. These two programmes were extensively financed by the US through its Operation Mission (USOM) and were continued under Thanom who became Prime Minister on Sarit's death in late 1963.73
The Second Plan (1967-1971), drawn up during the Thanom-Prapass regime, also focused attention on national security in response to US advice.74 For example,
supervision o f the National Economic Development Council (NEDC) which was reorganized from the National Economic Council of 1950 [Suehiro, op. cit.. p. 179]. I was unable to locate the first part o f the First Plan (1961-1963) in Australian libraries.
There have been six Plans to date. Subsequent references in the text and footnotes will use the short titles "First Plan", "Second Plan", "Third Plan" etc.
The First Plan, p. 9.
The National Economic (and Social) Development Board (NEDB/NESDB), The Second National Economic Development Plan 09 6 7 -1 9 7 1 1 . Bangkok: NEDB, Office of the Prime Minister, 1967, p. 2.
Ibid., p. 11.
H. Demaine, "Kanpatthana: Thai View of Development", in M. Hobart and R. H. Taylor (eds.), Context. Meaning and Power in Southeast Asia. Ithaca: Cornell University Press, 1986, p. 98. The MDUs and ARDs carried out highway construction and village development projects with the aim of ensuring political support for the government in the zones considered to be subject to communist infiltration from Indochina. See also Thak, Thailand. Ch. 5. 74 The Second Plan, p. 23.
the Plan addressed the activities of the MDUs under the responsibility of the Ministry of Defence operating with US assistance; military Civic Action groups under the Central Security Division of the Communist Suppression Headquarter; the Remote Areas Development Project (especially the southern part of the Northeast areas); and the Hill Tribes Development Project; all designed to counter insurgency in the rural areas.75 In the educational areas, while the First Plan was mainly concerned with the expansion of primary education, the Second Plan focused on the quantitative expansion of secondary, technical, professional and teacher education so as to provide manpower required for economic development. This manpower development planning was organized under the supervision of the joint Thai-USOM preliminary study 1966-1970 and supported by SEATO technical school as stated in the First Plan.76
The plans proposed some important projects in the agricultural sector, but were vague on implementation. The First Plan stressed a recognition of the need to expand agricultural production by improving techniques and encouraging greater self-reliance by the establishment of farmer co-operations and other associations. There was some consideration too of land tenure issues and of the need to improve the agricultural administration.77 The Second Plan addressed land survey projects for which the Accelerated Rural Development Programme would take the responsibility, and which were to be implemented by 1988.78
The outcome of the First and Second Plans from 1961 and 1971 were varied. Although the Second Plan stated that "the allocation of land is a major bottle-neck to successful rural development efforts" there seems to have been little real concern for rural development as the state's first priority, as industrialization grew rapidly at the expense of agriculture. For instance, the agricultural share in the GDP dropped from 37 per cent in 19617^ to 29.8 per cent in 19718^ whereas the industrial share in the GDP
75 76 77 78 79 80
Ibid., p. 73. In 1965, the Communist Suppression Operations Command (CSOC) was established by Deputy Prime Minister Prapass Charusatien to co-ordinate military, police and civil counter-insurgency operations and to work in the area of community development programmes [H.U. Luther, Peasants and State in Contemporary Thailand: From Regional Revolt to National Revolution. Hamburg: Mitteilungen des Instituts fur Asienkunde, 1978, p. 108]. The CSOC was later changed to be the Internal Security Operations Command (ISOC). The First Plan, p. 44.
Ibid., pp. 47, 48, 51, 70, 71, 78, 79. The Second Plan, p. 89.
The First Plan, p. 34.
increased from 19 per cent in 196181 to 26.2 per cent of in 1971.82 The relative decline of agriculture, which absorbed four-fifths of the labour force, created a great deal of problems for farmers including increasing debt and landlessness, migration from rural areas to the cities, as well as problems of urbanization. While the Plans proposed that the development of the industrial sector was intended to absorb unemployment, their success was very limited. The Board of Investment (Bol) could provide only 9,000 jobs annually whereas the labour force increased by about 2.5 million.8^ Suehiro pointed out that the government promoted the development of large-scale firms owned by foreigners and domestic manufacturing merchant class, but overlooked the development of the small-scale domestic firms. He also argued that the small, traditional domestic firms contributed to employment creation more than the big industries encouraged under the plans.84
Demaine has shown, too, that the infrastructure-development programmes were undertaken without discussion with the common people and without regard for their needs. These programmes were often ill-managed and poorly co-ordinated with other development sectors and there were a number of cases in which farmers lost their lands for road construction or new industrial areas without compensation from the government. Much of the regional construction and service sector activities went to support the thirteen (some large) American military bases then set up in Thailand.85
The aim of development as stated in the First and Second Plans to increase the standard of living of the people of Thailand failed and, instead, huge social problems emerged in various forms during this period despite the increase in GNP.86 The failure of the development plans had much to do with the emphasis on the counter-insurgency programmes. Thak and Muscat argued that there was a constant shift of priorities for