The effects of the financial crisis on the military in Thailand

Abstract

This thesis investigates the effects of the Thai financial crisis on the Thai military from the fiscal budget allocation aspect. The thesis explores the changes in the expenditure reduction pattern during four years of the recent financial crisis in Thailand. The thesis finds that the budget allocation in Thailand follows the historical expenditure reduction pattern found by Norman L. Hicks. The defense budget bears a high burden from the fiscal budget reduction during the financial crisis as found in the Hicks' study. This budget allocation pattern creates short-term and long-term effects on the Thai military. The short-term effects mainly come from the real term reduction in the defense budget, while the long-term effects draw from the decline in defense budget as a proportion of the GNP and the central government budget, in addition to the decline in the GNP. These effects deteriorate the capability, readiness, and the modernization process of the Thai armed forces. The thesis concludes that the effects of the Thai financial crisis tend to cause the Thai armed forces to restructure their organizations