PAST THAIS WITH BRITAIN

Michael Sheridan says our experience

should warn today's bankers how not to deal with a subtle people

Bangkok WHEN the boffins from the International Monetary Fund are whisked up and down the seething artery of Sukhumvit Road, in the centre of Bangkok, they doubtless mark well its bankrupt skyscrapers, its struggling tailors and thriving bars of easy repute, but perhaps they fail to notice the gracious compound nearby that houses Her Britannic Majesty's representatives in the Thai capital.

At a time when the Fund and all its works are frequently compared to the agents of a new colonialism, they might do well to ponder the lessons in power and money that were learned at great cost behind the compound's walls two genera- tions ago. When bluff outsiders try to dominate the subtle and patient Thais, they discovered, great and unintended consequences can occur.

It was a legation then, with its villas, its war memorial, its gardens, its shady bow- ers and deferential Thai servants. For the foreigners, life in old Siam pursued a pace that appeared colonial in every respect, except that, formally speaking, the country was never colonised and retains to this day the proud claim of independence.

When you rummage in the bookshops off Sukhumvit Road and plunge into the historiography of the place, it becomes perfectly clear that early this century the British behaved as if they governed Thai- land in all but name. One may take leave to doubt whether the IMF men had the Anglo-Thai Treaty of 1909 as a compulso- ry text in their MBA courses, but they may rest assured that it resides in the memo- ries of their Thai interlocutors as if it was their last IOU.

Today, it seems almost incredible that a handful of self-assured British administra- tors could presume to dictate to Thai kings and prescribe austerity to prime ministers. Under the new order of 1909, however, the British had added the south- ern Thai provinces to their Malayan hold- ings and set the scene for economic domination of the Thai kingdom.

By the 1930s, according to an admirable study by Richard Aldrich of Nottingham University, which I found in a Sukhumvit bookstore, British Empire ports in the Orient received 70 per cent of Thai exports, Malaya handled 70 per cent of the Thai rice crop and a cartel of British com- panies there smelted most Thai tin.

Then there was the proconsular figure of the financial adviser. As if Eddie George were to star in a remake of The King and I, a succession of British advisers were appointed by the Thais to manage their financial affairs. For Thailand it was a means of acquiring foreign, therefore mod- ernising, expertise. In their own understat- ed manner, the British adeptly turned this administrative privilege into an instrument of control.

Reading the past complaints and despairing censures of these men makes one all too conscious of how timeless are the cares of the financially orthodox. Their tasks were to keep Thailand solvent (thus protecting British commercial interests), to avoid frivolous expenditure on arms (except when Vickers armoured vehicles were on offer), to keep French Indochina at bay and to keep the Americans out at all costs.

Their record of success was a sorry one. Sir Edward Cook, who served from 1925 to 1930, had arrived fresh from a sensational divorce in India (a local diplomat remarked, 'God knows, in Bangkok he need have no fears!') and proceeded to persuade the Thais to make a fateful shift to the gold standard in 1929. He departed in a whiff of brimstone to curb the carefree fiscal policies of prewar Egypt.

Sir Edward's successor, Edmund Hall- Patch, was left to deal with the Thais' anguish in 1931 when Britain abandoned the gold standard — 'a bombshell,' wrote Cecil Dormer, the British minister.

He stormed in to see the bewildered Thai king and read the monarch a lecture on balanced budgets, then resigned in a huff when the king gave in to his panicked financial ministers. Thailand, too, left the gold standard in May 1932 and, not coinci- dentally, an officers' coup ended the abso- lute monarchy one month later.

British powers of recuperation in those days were such, however, that the Thais uncomplainingly accepted another adviser of gloomy Presbyterian rectitude: James Baxter. He did not hesitate to administer corporal punishment to spendthrifts. A left-leaning politician, Pridi, fell to his aus- tere strictures. Conservative budgets were imposed. Thailand weathered a series of coups and counter-coups, a crisis in the rubber market was overcome by a compro- mise, and, to almost everybody's satisfac- tion, American influence was all but banished.

For all his autocratic instincts, Baxter dimly perceived that perhaps the time was out of joint for economic imperialists. `Siam has got the nationalist fever,' he ruminated in 1935. 'It feels enslaved because its tical is linked to sterling, because its reserves are in sterling and held in London.' Like a game of conse- quences, the next years unfolded in a way that ought to remind global bureaucrats that history does not work like pure eco- nomic theory.

Behind the walls of the legation com- pound sat an enigmatic figure, the British minister, Sir Josiah Crosby, a pedantic bachelor whose cultivated appreciation of the pleasures of Bangkok led British mili- tary commanders to conclude that he had gone 'completely native'. By the time that our men in Bangkok awoke to the realisa- tion that their enemy was not J.P. Morgan but Emperor Hirohito, the Japanese had already penetrated the Thai establishment, which was rotten to the core. Cheap Japanese commercial terms and inquisitive Neighbours from hell. No. 29, Alastair Campbell Japanese commercial travellers provided the imperial forces with a bridgehead in Thailand that Sir Josiah and the man from the bank proved powerless to repel.

Baxter's orthodoxy had helped to banish Pridi and to secure the kingdom against what he imagined to be the paramount threat posed by the Third International. It also ensured the ascent of Phibul, a crafty nationalist who proved the nearest thing to a military dictator Thailand has ever pro- duced. Sir Josiah, for his part, became so immersed in the intricate delicacies of Thai diplomacy that it was only when the first decoded intercepts were handed to him at a conference in Singapore that he discovered Phibul was deceiving him with the Japanese. The Thais wanted their lost territories and their economic dignity back and Tokyo appeared to provide them with the means.

It is melancholy but consistent to record that Sir Josiah's last intervention in history came in 1941 with a frantic telegram urging Sir Robert Brooke-Popham, in Singapore, not to launch a plan called Operation Matador, which was drawn up to secure the strategic beaches of southern Thailand against the Japanese invaders heading for Malaya. Thai neutrality, said Sir Josiah, must not be violated. With its failure to launch Matador, Britain lost a significant chance to prevent the fall of Singapore, the event that ended European predominance in the Far East.

A mind as sharp as that of Michel Camdessus, the 'socialist from France' who heads the IMF, ought to appreciate the resonances. But perhaps M. Camdessus is not a man who has time to stop in the local bookshops on his travels.

The author is the Far East correspondent of the Sunday Times.