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Cablegate: Centralized Power Remains the Rule As Bangkok Holds The

VZCZCXRO4341
PP RUEHDT RUEHHM
DE RUEHCHI #0128/01 1980602
ZNR UUUUU ZZH
P 170602Z JUL 07
FM AMCONSUL CHIANG MAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0522
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHBK/AMEMBASSY BANGKOK PRIORITY 0749
RUEHCHI/AMCONSUL CHIANG MAI PRIORITY 0571

UNCLAS SECTION 01 OF 02 CHIANG MAI 000128

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON TH
SUBJECT: CENTRALIZED POWER REMAINS THE RULE AS BANGKOK HOLDS THE
PURSE STRINGS

REF: A. A) BANGKOK 3623 (THE END OF CEO BUDGETS)

B. B) CHIANG MAI 41 (CHOKING IN CHIANG MAI)
C. C) (05) CHIANG MAI 233 (DEVELOPMENT DESIGNED IN BANGKOK)

CHIANG MAI 00000128 001.2 OF 002


1. Summary: While modest efforts during the past two decades
to loosen central government control over local jurisdictions
succeeded in devolving a few administrative functions such as
road building to the local level, power has remained
concentrated in Bangkok. Former Prime Minister Thaksin
Shinawatra's policies tightened control over local budgets
through the CEO Governor scheme. With the current interim
government and political parties focused on other issues, local
autonomy and decision making are still a long way off. End
summary

2. Thailand's governmental system is highly centralized, with
governors appointed from the ranks of the Ministry of Interior
(MOI) to preside over each of the 75 provinces. Officials
responsible at the provincial level for issues such as health,
education, and natural resources are also appointed by Bangkok.
Periodic calls to strengthen the capacity of local government
achieved some success in the 1990s and under the 1997
constitution. Elected heads of Provincial Administrative
Organizations (PAOs) were given more power in an effort to
appease demands for direct election of governors and local
executive heads were to be directly elected by mid-2005, with
duties and revenues steadily devolving to local authorities.

3. Thaksin muddied this process when he created the "CEO
Governor" system (ref a). While in theory CEA governors
received increased funds to use at local discretion, in reality
these budgets were subject to instructions from Bangkok and
demands from MPs. According to Chiang Mai University local
government expert Dr. Thanet Charoenmuang, this "de facto
re-centralization" gave Thaksin's party influence over local
budgeting decisions and contributed to TRT's 2005 landslide
victory.

--- Mangoes on Order ---

4. Affirming that "Thaksin had no intention to decentralize,"
Phrae PAO president Dr. Chanchai Silapaouychai described how the
then-Prime Minister ensured that much of the budget went to
projects selected by the party's parliamentarians . In Phrae,
for example, TRT parliamentarian Worawat Eua-apinyakul insisted
that the province spend 60 million baht to build a factory for
drying mangoes. Reminded that mangoes do not grow in Phrae,
the MP responded, "we'll plant them".

5. Another MP-generated project used 30 million baht in CEO
budget funds in a misguided effort to convert Phrae farmers away
from growing the local sticky rice to producing non-local hom
mali rice for export. In the end, the farmers could not get a
good price for their rice because the government could not
guarantee it as authentic hom mali. Meanwhile, the reduced
acreage planted in sticky rice sent prices up, hurting Phrae
consumers forced to pay more for a staple of their diet.

--- Reverse Revenue Sharing ---

6. Heavily dependent on central government subsidies, local
governments must acquiesce to mandates from Bangkok, including
kick back "donations" to government projects. According to Dr.
Thanet, in 2006 every Tambon Administrative Organization (TAO or
Or-Bor-Tor) in Chiang Mai province was told to set aside 6
percent out its annual budget for such contributions, with each
TAO donating an average of USD 150 to the Ministry of
Agriculture's Royal Flora Rajapreuk expo. This three-month
long international expo, which closed Jan. 31, recently returned
to the headlines with renewed complaints about lack of local
participation on future uses of the site.

7. Accountability is another victim of rule from afar and weak
local government. Pressed to explain which administrative
jurisdiction she would go to with pollution concerns, one local
citizen acknowledged she would turn to "an office where I knew
someone." In fact, Chiang Mai relationships and rivalries
often override other factors: one brother of the former mayor
was an influential TRT parliamentarian under the Thaksin
government while another brother served as deputy to the PAO
President, a Thaksin foe.

--- No Plans to Delegate ---

8. While citing these examples from Thaksin's time, both Dr.
Chanchai and his Chiang Mai counterpart, PAO president
Thawatwong Na Chiengmai, expressed little faith that the interim
government is any more willing to delegate power. "If this
government understands power sharing," he said, "they are not
doing anything about it."

9. Such skepticism was further strengthened when Council for

CHIANG MAI 00000128 002.2 OF 002


National Security (CNS) Chief Gen. Sonthi Bunyaratkalin proposed
that the terms of sub-district heads (kamnan) be extended from 5
to 10 years, a move seen as an effort to expand the political
influence of MOI officials at all levels, from village heads
through governors. From a political point of view, the change
would also help counter the parallel structure of thousands of
elected Tambon Administrative Organizations throughout the
country, balancing the power that Thai Rak Thai reportedly still
wields over this competing power structure.

10. Comment: Chiang Mai's pollution crisis in March (ref b)
showed the confused lines of authority that make it easy for
local authorities to dodge accountability while the lack of
local participation in plans for the Night Safari (ref c),
Rajapreuk, and other Thaksin-supported development at the foot
of Doi Suthep saddled the area with failed tourism projects.
Most decision making remains centralized in the capital, far
from local view or influence. With neither those in power nor
those contesting for power particularly interested in changing
the situation, Chiang Mai and other provinces will continue
marching to Bangkok's beat.
CAMP

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