1997 was for Thailand a hectic year of crises and opportunities. Its economy was the first in East and Southeast Asia to exhibit the financial crisis after years of exceptional boom, a crisis which forced the Chavalit Yongchaiyudh government belatedly to put the baht on a “managed float” on 2 July, a float which soon proved to be unmanageable. The nation's foreign reserves were badly drained and an International Monetary Fund (IMF) rescue package became a necessity. Yet the crisis, in shocking people to their senses, opened up opportunities, particularly on the political front. The brand-new Constitution which the Constitution Drafting Assembly, autonomous of Parliament, was drafting for the first eight months of the year was approved by Parliament on 27 September amidst fears that its rejection would catapult a political crisis to add to the economic one and lead to spiralling instability. Continuous vigilance by civil society forces made sure that the charter's contents put on track a political reform agenda wherein civil liberties are better safeguarded, more public participation in decision-making is allowed, new and more competent people can enter national politics, politicians are held more accountable, government becomes more transparent and cleaner, and decentralization is begun.

Civil society activities were also important in forcing the reluctant Chavalit to resign on 6 November. A tense period of political uncertainty followed, with some calls for the suspension of parliamentary politics so that technocrats could hold the reins of government to deliver the country out of the economic quagmire. However, parliamentary and democratic procedures prevailed. The Democrat Party (DP) managed to beat the attempt by outgoing parties to return to power, and Chuan Leekpai, its leader, formed a coalition on 14 November. At year end his government was riding on widespread public support.

The Assembly of the Poor's Encampment

The year 1997 in fact began with a major happening which vividly reflected another, deeper, adverse effect of the boom years in which export-led industrialization was pursued with little heed to the natural environment and the livelihood of those at the bottom of the agricultural sector.