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p. 5 of 23 BACK | NEXT I. Country Performance Assessment A. Economic Performance Assessment B. Poverty Assessment C. Assessment of Socio-Environmental Performance D. Governance: Sound Development Management E. Implementation Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Thailand : I. Country Performance Assessment

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D. Governance: Sound Development Management¹

19. Thailand is undergoing its most fundamental political changes since the 1932 Revolution that replaced the absolute monarchy with a constitutional system. The hallmark of these changes is the October 1997 Constitution, which reflects broad Thai aspirations for greater democratization and more responsive and responsible government. In contrast to its predecessors, most of which were prepared under military regimes, the new constitution is unusual for the extent of public consultation that took place which, for the first time, involved ordinary Thai people in its drafting. The establishment of an independent election commission, the provision that politicians and their families must declare their assets and liabilities both before and after taking office, allowing citizens to petition an anti-graft body to probe politicians suspected of corruption, the filling of some seats through proportional representation, greater control over vote counting, the stipulation that senators and provincial village chiefs be elected instead of appointed, and a requirement that cabinet members resign their parliamentary seats are among the key proposals that have raised controversy in view of their impact on traditional politics.

20. The 1997 Constitution is more democratic than any preceding one in both its development and its vision. Its passage, due in some part to the public dissatisfaction with the problems associated with the 1997 economic crisis, was expected to end the "old politics" of money and influence. Important reforms included strengthening the roles of the Prime Minister and of the legislative process, administrative and fiscal decentralization, increased citizen participation through elections and other consultative processes, the legal creation of new and transformed accountability agencies, and the passage of the National Education Act. More recently, a set of 11 bills was passed by the Thai Parliament in 1999 as part of the nation's response to the economic crisis. These bills lay the framework for improved functioning of the economy, modernized bankruptcy (reorganization and restructuring) procedures, and establishing strong regulatory frameworks for banks and other financial institutions. In addition, Senate elections were held in March 2000, and two rounds of new elections were held in as many as 78 constituencies out of 200 where there was suspicion of electoral fraud.

21. Elected officials in Thailand face a political history that has witnessed periods of democratic government alternating with longer periods of military intervention and authoritarianism. The emergence of a professional military less inclined to become involved in political affairs and the growing strength of civil society are among the positive political developments of the past decade. The next generation of challenges is to establish an equilibrium not only between state entities such as Parliament, the judiciary, the executive, and the military, but also between state and non-state actors, including the business sector, non-governmental organizations, and the community at large.

22. The 1997 Constitution includes a formal role for civil society in shaping national policy, a role that will be highlighted during preparation of the 9th Plan. Over the next year, “town meetings” between large- and small-groups of Government officials, academia, NGOs, and representatives of the private sector and civil society organizations (CSO) will be conducted in virtually every province in Thailand. These meetings will generate essential inputs for preparation of the plan. The Government has also approved a National Economic and Social Council (comprised of individuals representing a cross section of Thai society, to provide informal feedback on proposed policy and legal reforms), proposed legislation to establish a Community Organization Development Institute, and drafted a bill to improve the enabling environment as well as its own support for civil society organizations involved in social safety net issues. Note CSOs are frequently called upon by the Government to monitor Government-funded projects, and CSO representatives are increasingly named to key government committees.

23. In addition, the Government is showing its commitment to building a pro-poor state by transferring a number of powers to local levels of government, which should result in the following:

• Local governments can better tap local knowledge on the needs of the poor, and give communities the flexibility to design projects that meet these needs.
• They offer a better chance for developing the capacities of the poor to participate in public life.
• They allow citizens to keep a close watch on the proper use of public funds.

24. Yet these benefits will only be realized with a major strengthening of capacities at the central and local levels. At the central level, the mechanics of how to channel and monitor the increased transfers to local governments have not been fully worked out yet, nor has legislation been passed to determine what functions will be financed at local levels through increased local resources. The National Decentralization Committee needs to tackle over-regulation and problems of jurisdictional conflicts, which have in the past plagued local government development. Drafting a Decentralization Action Plan - due by November 2000 - will require considerable specialist inputs. The implementation details of new regulatory laws needs to be worked out with the help of specialists, to avoid leaving the new, inexperienced regulatory bodies prey to manipulation by vested interests. At the local level, local government organizations will need considerable capacity building assistance to improve management performance, raise additional resources, upgrade the quality of basic services, ensure accountability, and control rent-seeking. Revenue enhancement opportunities available to local governments include: enhanced tax administration, increased user charges for services (water, garbage collection and licensing), and empowering local rather than central authorities to license local businesses, all supported by improved information technology.

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