Leading Article: Thailand's road to democracy

WHEN the Thai army killed more than 40 pro-democracy demonstrators in May, some people feared that the country was moving into an era of military repression. Now that elections have produced a narrow majority for a coalition of the four main democratic parties, the killings may instead come to be seen as the last kick of a dying system. It is possible that Thailand is finally setting out on the road to stable democratic rule.

If this is the case, much of the credit must go to the interim prime minister, Anand Panyarachun, a Western-educated diplomat turned businessman with long-standing American connections. He was recalled to public office after the slaughter in an attempt to assuage popular anger with the military. Mr Anand quietly purged the most corrupt and politically involved commanders, compelled the armed forces to relax their grip on lucrative nationalised industries, and licensed television and radio stations to compete with those under military control.

Thailand is one of the so-called Seven Dragons of east Asia, countries whose economies have grown in spectacular fashion in recent years while the developed nations faltered. In the early stages of their advance, those nations were spectacularly corrupt and often politically repressive. At worst, corruption appeared not to have harmed the process of growth; at best, it helped to fuel the engine. As for the lack of democracy, Thailand was often quoted as proof that full democratic freedom was not necessary for the growth of a market economy.

These propositions may arguably be true of the early stages of economic development. But at a certain level of economic sophistication, a large and powerful entrepreneurial middle class emerges. It is interested in a rational and predictable legal framework and a public infrastructure to support its activities. It demands a responsive yet coherent and stable system of government able to cope with long-term problems. It can tolerate individual acts of corruption, but irrational central intervention in economic decision-making and coups motivated by greed are deemed disruptive.

After the Thai military takeover of February 1991, the United States was demonstrably furious and net direct investment dropped by 22 per cent. Mr Anand was one of those who came to believe that his country's time for change had arrived. Thailand's rickety political system was no longer merely anachronistic - it was economically inhibiting and socially destructive. He described his summer of reform as a period of 'structural adjustment', opening up the political system to match the openness of the economic system.

The new administration takes over at a difficult time. Thailand's economy is slowing down and its current account deficit is rising. Tough and unpopular decisions are called for. Many people want to know more about the May killings and would like to see the perpetrators punished. The military has shown a tendency to defend its own, and to bounce back when the popularity of politicians wanes. Chuan Leekpai, the prime minister-elect, is one of the few politicians with a reputation for probity and courage (most are perceived as being as corrupt as the military). To these virtues he must add guile, if he is to avoid the attention of the armed forces - who will continue to hover in the wings.