For a fascinating study of the extent of Thailand’s royal wealth see the two part article appearing in Asia Sentinel. This is an important study of the operation of the Crown Property Bureau. Here is an extract:
… fear of upsetting the monarchy goes a long way to explain why so little has been written about the Crown Property Bureau. King Bhumibol Adulyadej’s golden robe shields the bureau from public criticism, allowing it to oversee a modern form of feudalism with little scrutiny.
More than any institution over the past hundred years, the CPB has shaped Bangkok and in recent years it has only picked up speed. Since recovering from huge debts incurred during the 1997 financial crisis, the CPB has aggressively sought to boost profits from its prime Bangkok land plots, often pushing out poorer shop owners and tenants that have lived on the land for generations.
The ceaseless development of huge malls, hotels and office buildings is rarely debated as the bureau avoids public criticism. When its officials do speak, they simply tout the king’s theory of a sufficiency economy, which preaches moderation, reasonableness and immunity. As the bureau has found, however, the best immunity from an economic downturn is to make sure its birthright properties are yielding large amounts of cash.
18 responses so far ↓
1 nganadeeleg // Mar 2, 2007 at 10:00 am
No name shown for the author – I wonder who the correspondent was?
I would like to see more transparency, so the line between what is royal family personal wealth and what is national/state wealth is more clear cut.
Without such transparency, opponents of the palace get a free kick just by mentioning CPB.
2 anonymous // Mar 2, 2007 at 12:44 pm
These articles are in fact terribly disappointing: sloppily composed, devoid of quantitative data, and overhyped. Not even close to the standard set by Phaisan Sicharatchanya in his classic piece on the same topic for the FEER some two decades ago. The role of CPB greed in destroying parts of Bangkok is a serious matter; it requires far more serious treatment than these articles offer. The influence of this “Michael Selby” character, mentioned just once in the articles, requires real investigation. So does the conduct of Chirayu around the time of the 1997 crisis. And what of the CPB’s rural landholdings, on which Phaisan shed valuable light? Did the Asia Sentinel’s correspondent pay a visit to the Commerce Ministry, whose registration files would show far, far more about the CPB’s activities than the fairly obvious ramblings offered here? Too, there is the immense irony of the CPB’s plan to level the Silom Club. For, in the rear of the club’s main room, hanging just over the entrance to the “members only” locker room, is a portraint of the club’s founder. None other than Chao Phraya Sithammathibet, whose role in making the monarchy and the king what they are today Paul Handley has explained. That “the king’s conglomerate” may now level the club speaks, I think, for itself.
3 chris baker // Mar 2, 2007 at 11:51 pm
2. Anonymous, putting figures on this stuff is very difficult because the CPB is not transparent. Your other comments are right on, and the vignette on the Silom Club is lovely,
These articles are not bad, based on what is available in English. The tone is sensationalist, and there are a couple of slips, but given the sources, well….
But the Thai sources now go a bit deeper. In the last few years, there have been a couple of MA theses, and a handful of good archive-based academic articles.
All of this is now summarized in Thai in one of the chapters of Pasuk’s two-volume Thun Thai. We are now working on an English version, but it’s going to take a bit of time because we are trying to go a bit deeper.
The sensationalist tone of the Asia Sentinel articles is predictable (My God! The king is rich! Rich people exploit others!), but the real importance of the Thai monarchy’s wealth is much more interesting.
The investments made in the fifth reign mean that the Thai monarchy is not dependent on landed estates (like most European monarchies) or on the year-to-year tax revenue. In the European case, landed wealth was vulnerable to peasant discontent, and tax revenues were resented by businessmen and the middle class. But the CPB does not have these problems. Sure, it’s the biggest slum landlord, but it’s very careful to keep these rents way below market value. The very special nature of this monarchy has a lot to do with its financial base.
The important fact is that is that it is probably the biggest corporate group in the Thai economy. That means its interests are by and large the same as other corporate groups. So…
4 Srithanonchai // Mar 3, 2007 at 12:30 am
When the CPB had our beloved old Siam Intercontinental Hotel (a low-rise architectual gem with a green lung in a concrete jungle) destroyed to make way for this bad-taste monster of a shopping centre called Siam Paragon (not anywhere near “The Pride of Bangkok” as it is advertised), a Thai friend of mine sadly remarked, “Well, the royal familiy cost a lot of money.” By the way, isn’t MBK on Chula land (like Siam Square)? Anyway, no democracy can function when vital political-business areas are kept beyond scrutiny (as Sulak so correctly remarked in Fa Diew Kun, only to meet with the accusation of lese majeste). And true, it would be very important to investigate the CPB’s up-country landholdings and business dealings.
5 Bangkok Pundit // Mar 3, 2007 at 4:38 am
“These articles are in fact terribly disappointing: sloppily composed, devoid of quantitative data, and overhyped. ”
This reminds me of the criticism of Handley’s book. How can one obtain any quantitative data about the CPB without arising any kind of suspicion? Do you really think the writer of the piece would still be writing about such things if he paid a visit to the Ministry of Commerce’s office asking about the CPB? Lese Majeste carries a prison sentence.
Perhaps, you should ask, why doesn’t a Bangkok newspaper conduct an investigative report into the CPB like a real newspaper would do?
6 anonymous // Mar 3, 2007 at 2:59 pm
In response to Bangkok Pundit, all that I can say is, “Have another look at the Phaisan article.” It offered data. Not the whole picture, to be sure, but enough to make the corporate logic of the CPB clear. I vividly recall, for example, its numbers on the proportion of CPB staff managing real estate–including rural lands–as opposed to share investments, at a time when the CPB’s income came largely from the latter. This is the sort of insight that can come from rigorous research … And, of course, there is no need to “ask about” the CPB at the Commerce Ministry. You take the bus from Victory Monument to Sanam Bin Nam, go the Department of Business Devlopment, pay the fee, and examine the registration files–including share-holder lists–of firms in which you are interested. Nothing on these files is marked “CPB”. People do research like this all the time. So my earlier point has no similarity with criticisms of Paul Handley, who went the extra mile and did the research needed to make his points thoroughly and convincingly. Too bad that the Asia Sentinel did not emulate him. The significance of all this requires it, as some of the other matters raised in my earlier post suggest. For example, there are paper trails for Chirayu and Selby. And the cultivation of trusted sources in Bangkok financial circles would yield much additional insight into their activities during the past decade. Your point about the failure of the local press to tackle this topic is fair, not least as it could be done rather obliquely–as by sharing a bit of data and leaving it to readers to draw their own conclusions …
7 Dhammaratsadorn // Mar 3, 2007 at 4:04 pm
Is the CPB “crony capitalism”?
8 polo // Mar 4, 2007 at 3:18 pm
For some reason Anonymous, Baker seem interested in playing down the AsiaSentinel article. First of all, the Phaisan/FEER article was never more of an outline of the CPB, saying its existed and owned Siam Cement and Siam Commercial Bank and some land. As an uninterpretive introduction, ok. But nothing to write home about. As for the new academic studies, from what I heard they are more historical.
The Asia Sentinel piece offers a new perspective on how the CPB is rushing to develop its land holdings, one shopping center and luxury hotel after another. What’s the rush for the money? What’s the social justification for the type of projects? What’s the value-added to the country? How do they add to the urban mess of Bangkok? Doesn’t the CPB have any constructive idea for Thailand on the science and technology end?
As for Anonymous’ hangup about Chirayut and Selby: It’s unlikely any document research is going to find out dirty stuff about Chirayut; he’s probably fairly clean. Selby was in the 1980s a fixer for Bangkok bank and was brought to the CPB by Bangkok bank’s VIchit Surapongchai. He and the other bankers at CPB are the guys to figure out. Selby probably just engineers the deals they decide on.
And Baker says: “That means its interests are by and large the same as other corporate groups. So…” Is this really true? Does it really have the same interests? What does it have planned for its property income — to buy more property and expand its holdings? To invest in long-term industry? To buy stocks onthe SET? M&A? Diversify overseas? There has to be some creativity to make any of those choices, and all are politically sensitive. Do they have any real strategy at all or are they on auto-pilot to maximise income generation without risk, and to whose benefit?
9 Suriyon Raiwa (ex-"anonymous") // Mar 5, 2007 at 3:26 pm
Thanks, Polo. This is very interesting. You are right in what you say about the “new” angle of the Asia Sentinel pieces. Just didn’t strike me as all that new for anyone who has been around Bangkok in recent years. But maybe I am too harsh. I have never looked into this, and vague assumptions are often wrong. But my own vague assumption is that the CPB has no developmental vision. I have assumed that the the key question is your “What’s the rush for the money?” and that after the financial crisis the CPB made a conscious decision to realize more revenue from its landholdings. (Another reason that I consider the Phaisan piece a useful base-line.) The Bangkok rumor mill has suggested that the need to do so resulted not least from Chirayu’s mismanagement (or worse) during the 1990s. Hence my suggestion that his role be examined more carefully. And I guess that Wichit needs scrutiny, too. Bottom line, pending better research, is that there *is* indeed this acceleration in the CPB’s blind greed in recent years. And I think that it is at least worth considering that, like so much both in Thailand and across the region, some of this is a long-term consequence of the 1997 financial crisis and a certain approach to recovering from losses then suffered and to insuring against such losses in future. But your questions suggest that we are many, many well researched articles away from getting to the bottom of all this.
10 Bangkok Pundit // Mar 5, 2007 at 9:35 pm
Anonymous:
“Have another look at the Phaisan article.
I did. For anyone interested the article is available here.
The Phaisan/Paisal piece has a lot of historical data. I was surprised at the size of CPB’s upcountry land holdings and yes, the chart is excellent. I agree with Polo who states:
“The Asia Sentinel piece offers a new perspective on how the CPB is rushing to develop its land holdings, one shopping center and luxury hotel after another.”
Given the prominence that the sufficiency economy philosophy has had and also the expressed concern about excessive consumerism there has been very little in the Bangkok Press looking at CPB and its role. Is this because there is nothing to it or concern about lese majeste/indirectly criticising HM the King? For me it is because people are wary of the later not the former. The Asia Sentinel piece is far from perfect, but there are many tidbits of information there.
11 Srithanonchai // Mar 6, 2007 at 1:48 am
The CPB destroying the Siam Intercontinental and putting the Siam Paragon in its place surely is a bizarre way of supporting the principle of modesty highlighted by the sufficiency economy. Or look at of what will happen with the Suan Lumb Night Bazar, etc. etc. If even the core royal enterprise can’t be made to follow the king’s approach, why should anybody else care (except UNDP, the bureaucracy, and the Royalists of course–at least verbally)?
Could the MA curriculum on the sufficiency economy, mentioned in an earlier post by sombody else, include the CPB as a critical case study about how one should NOT “implement” the king’s ideas? Or should one merely use it as an example of hypocrisy?
12 patiwat // Mar 6, 2007 at 11:51 am
Thanks for the link, BP.
If anybody is interested in this sort of topic (family business empires), there was a great thick overview on it written by the late Peter Beal. Peter lived in Thailand for over 35 years, was very well linked in the American Chamber of Commerce, and was also a professional business researcher. His book contained a tremendous wealth of information on the business empires of Thailand’s 50 most prominent families (CPB included).
13 Srithanonchai // Mar 6, 2007 at 3:46 pm
Patiwat: Can you please provide the bibliographical details of he book? Thank you.
14 patiwat // Mar 6, 2007 at 7:21 pm
Sorry, my old company had one tattered copy that had been thumbed to death. It was lost during an office move. I suspect the book was published by the consulting/research company that Peter founded. Since Peter was active in AMCHAM, they might have kept a copy as well.
15 Suriyon Raiwa // Mar 6, 2007 at 7:28 pm
Yes, many thanks for that link to Phaisan, Bangkok Pundit. Is that book that Patiwat mentions what used to be the Tara Siam directory? If so, here is the link to the latest edition, which sells for US$1700: http://www.biz-lib.com/ZBGTB.html . Note that there is a ten-page section on the CPB. Previous editions of this book have drawn largely on data from Ministry of Commerce registration files, the same ones that I mentioned earlier. At the same time, those earlier compilations also reflected the clear influence of someone who *really* knew his way around the Thai business scene.
16 patiwat // Mar 6, 2007 at 8:50 pm
Suriyon Raiwa, yep, that’s it. Although my copy was blue and was from before the crisis.
No excuses: if you want to understand anything about how business and society works in Thailand, you need that book. It’s nearly a thousand pages long and is written very fairly, i.e., with no political agenda. It wasn’t designed for political science researchers – it was designed for business people. Used to play a silly game with my buddies going through that book, comparing who knew/dated/studied-with/was-related-to the families listed – the winner would get bragging rights to being the most connected person in the company.
The only issue I had with it was that the name spellings weren’t always consistent with what was reported in the media. But any book with the same scope would face the same problem.
With on-line directories like Business On-Line (later purchased by Reuters), doing research on Commerce Ministry filings became much easier. But still, the research and attention to detail invested in the Tara Siam directory is unmatched. Rest In Peace, Peter Beal – you created a masterpiece.
17 polo // Mar 7, 2007 at 5:31 am
Beal didn’t work for Tara Siam, he worked for a rival, and I think his study of the family businesses of Thailand done in 2 or 3 volumes dates to the mid-1980s and was his own work. As he knew, lots of people copied hist work.
At the time he also did a massive chart linking all the Sophonpanich family businesses that looked as complex as a computer chip.
Later he was responsible for some (if not all) of the Thai players on the the Forbes billionaires list, including the one time in the late 1990s Forbes decided to include King Bhumibol.
He was also a super-keen jazz buff, full of great stories.
RIP
18 New Mandala » The practice of sufficiency economy // Mar 16, 2007 at 10:24 pm
[...] Given the recent conversations here on New Mandala about sufficiency economy and the Crown Property Bureau the letter is worth reading in full. Thompson writes: Wednesday’s edition of the Bangkok [...]
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