UPPER NORTH: THAKSIN'S HEARTLAND MAY MOBILIZE IF ECONOMY

C O N F I D E N T I A L SECTION 01 OF 03 CHIANG MAI 000004

SIPDIS

E.O. 12958: DECL: 1/7/2019
TAGS: ECON PGOV EAGR KDEM TH
SUBJECT: UPPER NORTH: THAKSIN'S HEARTLAND MAY MOBILIZE IF ECONOMY
WORSENS

REF: A. 07 CHIANG MAI 187 (NORTHERNERS REMAIN LOYAL TO "THAKSINOMICS")

B. 08 CHIANG MAI 178 (PRO AND ANTI-THAKSIN GROUPS IN CHIANG MAI: A PROFILE)

CHIANG MAI 00000004 001.2 OF 003


CLASSIFIED BY: Kevin Rosier, Consular-Economic Officer,
Consulate General, Chiang Mai.
REASON: 1.4 (b),(d)



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Summary and Comment
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1. (C) Local political leaders and experts from Chiang Rai and
Chiang Mai provinces say that a deeper polarization of "yellow
shirts" and "red shirts" in the upper north may result if the
new Democrat-led government is short-lived, Thaksin remains
active politically from overseas, and economic conditions
worsen. If these conditions are met, former PM Thaksin
Shinawatra loyalists in Thailand's upper north may strengthen
and mobilize in 2009. SEPTEL will report on the views of
villagers in the lower north.


2. (C) Red-leaning northerners, however, may be prepared to let
their loyalty wane if the new government is effective at
maintaining Thaksin-initiated populist policies, a situation
that will take time to develop. While Thaksin-loyalists are
divided on whether to give PM Abhisit's new government a chance,
the minority yellow shirts of the upper north wholeheartedly
welcome the new government, citing the elitist view that most
Thaksin loyalists are not sufficiently educated to know what is
best for them economically. These "yellow shirts" hope that the
new government can counter red shirt movements from the north,
even if that means involving the military.


3. (C) Comment: The fate of the upper north as a
Thaksin-stronghold may lie in the hands of the more moderate
Thaksin loyalists. While these Thais of the upper north still
show support for Thaksin, their priorities in a worsening
economy will likely turn away from political fighting and toward
whatever solutions are available to improve living conditions.
If PM Abhisit's government survives long enough to demonstrate
effectiveness at improving the welfare of voters in the upper
north and undercutting red shirt movements, Thaksin's base in
the region could falter. If, on the other hand, the government
fails, the presently strong red shirt movement of the upper
north may provide more hope to those facing economic hard-times
and come back with yet another strong performance in the next
round of elections. End Summary and Comment.

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Unemployment and Debt Place Burdens on Upper North
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4. (SBU) Though devotion to Thaksin among average upper north
villagers may vary from the most diehard "red shirts" (the color
of dress favored by Thaksin loyalists) to lukewarm fans, their
growing economic problems are common, namely rising unemployment
and debt. Economists have estimated over 1 million unemployed
in Thailand this year. Though many of those losing work are in
Bangkok, these newly unemployed are usually domestic migrants
from Thailand's north or northeast regions. A Chiang Mai
University labor economist says that the 1 million estimate is
low and that without good government policies to fold these
people back into the work force, they may remain unemployed for
awhile. He expects that if the newly unemployed cannot find
work - thereby placing economic burdens on their northern
families as well - this may affect the current political
polarization of yellow and red shirts in northern Thailand.
Specifically, he predicts a strengthening red shirt movement as
a consequence of growing economic hardships and, by extension,
the likelihood of a Thaksin-backed political force winning
decisively in any subsequent set of elections.


5. (SBU) In addition to growing unemployment, media have
reported growing levels of debt among Thai farmers as commodity
prices fall. Upper north villagers report that a large part of
their debt comes from borrowing from the Village Fund, a
Thaksin-initiated program that provides low-interest credit in
villages. As in previous years (ref a),these villagers
nonetheless continue to appreciate the option to borrow from the
Village Fund. Leaders of one village in Chiang Rai province
said that the average debt per household is about $2,800, and
that every household in the village is in debt. When pressed on
whether they resent the program because of their growing debt,
they replied that they would still rather have the fund than not
and that debt is an expected and common burden for families at
their income level.

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The Bright Red Upper North
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6. (SBU) It is well established from election results in 2001,
2005 and 2007 that northern Thailand is a base for former PM
Thaksin Shinawatra, and the upper northern provinces of Chiang
Mai and Chiang Rai are specific strongholds within the region.
A group of Chiang Rai farmers told us during a December 16-18
trip that they will do "whatever it takes" to get Thaksin back
in Thailand and back in power. These farmers complained that
since Thaksin was removed from office by the coup d'etat of
September 2006, their economic welfare has been in decline.
These farmers, who identified themselves as devout red shirts,
said that their loyalty to Thaksin has only grown as economic
conditions have worsened. As a result, they have rallied under
the leadership of red shirt organizers and participate in
protests upon any immediate request. They said that they are
willing to travel to Bangkok, if need be, to do so at their own
expense, and to use violence against person or property, if that
is what red shirt leaders request of them. (Note: This group
explained that cell phone text messaging and radio announcements
are the primary means of communication to mobilize red shirt
members, which is consistent with what redshirt organizers in
Chiang Mai told us, per ref b.)

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Chiang Rai Corn Farmers Demonstrate Ability to Mobilize
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7. (SBU) A recent example of how current economic hardships can
impact political mobilization in the upper north was the protest
by Chiang Rai corn farmers who blockaded the main routes into
and out of the city on December 16 and 17. The previous
government under former PMs Samak and Somchai instituted price
guarantees for corn farmers, a Thaksin-era legacy. The policy
allowed for the RTG to purchase up to 500,000 tons of corn at
the guaranteed price of 15 cents per pound, six cents per pound
higher than the market price.


8. (SBU) With such a significant difference between the
government and market prices, suppliers quickly maxed out the
500,000 ton cap and were unwilling to re-enter the current
market of low prices resulting from the global economic
downturn. Instead, under the leadership of the red shirt
movement, the farmers mobilized to block access into and out of
Chiang Rai city. Although the price guarantee was a policy
initiated by a Thaksin-backed government, red shirt leaders
managed to associate the lack of an expanded volume of corn
purchased by the government at the guaranteed price with the
newly forming Democrat Party-led government, shifting any blame
from former PMs Samak and Somchai to current PM Abhisit. The
result was a two-day protest that illustrates how economic
complaints can quickly mobilize Thaksin-loyalists in the upper
north.

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Yet Thaksin's Upper North Base Could Falter If . . .
-------------- --------------


9. (C) Although the climate in the upper north is ripe for
pro-Thaksin mobilization, there is no guarantee that voters will
always turn to him (or his political partners) for economic
salvation. Voter fatigue over political infighting and local
government loyalty to PM Abhisit are two ways that the upper
north Thaksin base could wane this year.

-- The Wait-and-See Mentality --


10. (C) Although most upper north voters are Thaksin-supporters,
most are tired of political fighting and want to see a
government that is stable and effective. One kamnan, a local
government district official who covers multiple villages, said
that voters in his Chiang Rai constituency are satisfied enough
with the new government and at least want to see it have the
chance to govern. He said that as long as villagers are poor,
they will hope for Thaksin to return and fix their economic
problems; however, he said that with many voters being
disappointed with the performance of the previous Samak- and
Somchai-led governments, this loyalty to Thaksin may be
dwindling.


11. (SBU) A group of female villagers in Chiang Rai said that
although they hope that Thaksin returns to clear his name, they
have a "wait-and-see" approach to the new government because
they are tired of the political fighting in Thailand. They said
that while they appreciate Thaksin's populist policies such as
low-cost health care and the Village Fund, they would only be
angry if the new government removed the programs rather than let
them be. The women said that they hope for Thaksin's return not
to save them from their economic problems, but to clear his name
as a "hometown boy" who does not deserve the embarrassment he
has faced.


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12. (C) In a suburban village of Chiang Mai, the Village Head
said that while economic conditions have worsened locally,
villagers want for nothing. She said that the only villagers
not working are day laborers who believe that current low wages
make working not worth their time. The Deputy Mayor of this
village's municipality said that incomes are falling in the
area, but unemployment has not risen much yet. He expects that
it will not be until April that villagers will see the impact of
the economic crisis at the grassroots level. The village head
said that villagers are aware of the current red-yellow
polarization in Thailand but prefer to identify themselves as
neutral. She said that her village also has a "wait-and-see"
attitude about PM Abhisit and his new government.


13. (SBU) In Sankamphaeng, located near Chiang Mai city, village
leaders said that if economic conditions worsen this year,
villagers will shift focus away from politics towards earning
money for their families. They said much will depend on the new
government's ability to handle the economic crisis, which they
are prepared to observe.

-- Local Government Loyalties --


14. (C) In addition to this benefit-of-the-doubt attitude toward
the new government by many villagers, local government loyalty
to the new national government under PM Abhisit may also weaken
Thaksin's upper north base. The President of the Kamnan and
Village Head Association of the 17 northern provinces claimed
all members who are local government leaders are on board with
the new government and ready to let it lead, especially because
of the poor performance of former PM Samak.


15. (C) The Association President, who is also a kamnan in
Chiang Rai, explained that there have been Qent changes to
tQ rules for kamnans and village heads, which may allow local
leaders to shift loyalty away from constituents. Currently,
voters choose village heads by election; and village heads
select a kamnan. Whereas previously both terms were for five
years with no limit to the number of terms, under new
regulations the village head and kamnan terms are for life until
mandatory retirement at 60 years of age. The result could be a
range of local government leaders who have no motivation to
represent their constituencies given that they are no longer
required to run for re-election.


16. (U) This cable is the first in a two-part series covering
the impact of the economic crisis on politics in the upper and
lower north of Thailand. This cable was coordinated with
Embassy Bangkok.
MORROW