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