SINCE the introduction of Thailand’s constitutional monarchy in 1932, the country’s armed forces have been the most powerful force in Thai political life. Coups d’état that replace elected governments have gained legitimacy as part of the political process. The monarchy has endorsed all successful coups, including one in May 2014 that ousted Yingluck Shinawatra, who had won a landslide victory in a general election in 2011. She is the sister of Thaksin Shinawatra, who was himself ousted in a coup in 2006 and who is, from self-imposed exile in Dubai, the power and money behind Ms Yingluck’s Pheu Thai party. The current prime minister, General Prayuth Chan-ocha, is the 29th since 1932 and the 12th military strongman to hold the post. Breaking this cycle will not be easy given Thailand’s political and geographic schisms. The old establishment, including chunks of the royalist Democrat Party, which dominates politics in the south and in western parts of Bangkok, welcomes the “double coup” that ousted the Shinawatras as a necessary step to free the country from the grip of a populist authoritarian. Mr Thaksin’s supporters, who hold sway in the populous provinces of the north and north-east of the country, portray the return to military rule as the last effort of a privileged class to preserve the old order.

Thailand’s volatile politics have not prevented it from transforming itself from an agricultural economy into a modern industrial state. The economy grew at a near double-digit pace from 1982 until its collapse during the 1997-98 Asian financial crisis. Since the 2006 coup, annual GDP growth has been far more modest but foreign direct investment (FDI) has kept coming. The World Bank ranks Thailand 26th out of 189 countries on the ease of doing business. Thailand is the only upper-middle-income country in mainland South-East Asia and the only one with an uninterrupted power supply. Its GDP is bigger than the economies of Cambodia, Laos, Myanmar and Vietnam combined. If Thailand’s economy could be said to belong to any foreign country, it would be Japan. After floods devastated Thailand in 2011, Japanese firms poured in nearly $30 billion to rebuild their favourite production base in Asia. That is more investment in three years than everything that American firms have poured in since the Vietnam war, plus everything Chinese firms have ever invested on top.

Thailand’s record since 1997 in improving its citizens’ standards of living has been unimpressive, fuelling political divisions. Many explanations have been proposed for this sluggish performance: a “middle-income trap”, a turf war among Thai elites over resources, an ageing population and a broken education system. What the official figures ignore are incomes from Thailand’s massive shadow economy, which, as a share of GDP, is bigger than any other in Asia. According to the World Bank, only half of all income shows up in Thailand’s national-accounts data.

Unlike its neighbours Myanmar and Cambodia, Thailand is facing the social and economic consequences of a rapidly ageing society. Today, three out of ten Thais are in the labour force, compared with eight out of ten in 1970. In some ways, the country is a victim of its own success. The fertility rate has plummeted from six in 1970 to 1.5 today and life expectancy has surged. Thailand is short of workers as a result. The reported unemployment rate is less than 1%. Millions of migrant workers from Myanmar and Cambodia keep things going. Future growth will have to come from capital accumulation or increases in productivity. That raises political questions. Only one in ten Thais, mainly members of the middle classes, pay tax currently. To provide better education and health services politicians might have to tax the middle classes far more heavily. Such thorny choices are likely to deepen the political divisions that bedevil Thailand.