The institution has been central to both political and economic development in Thailand but is shrouded in mystery. The power and prestige of the Thai monarchy depend on the income derived from this institution β giving the Crown Property Bureau huge financial and political influence.
How did the institution emerge, evolve, and what role does it continue to play in the Thai economy and Thai politics? According to the Crown Property Bureau website , the institution traces its lineage to the Department of the Treasury under King Chulalongkorn. In , as part of the overall modernization of the Thai administrative system, expenses for royal life were formally separated from the government budget and placed in the hands of the Privy Purse Bureau PPB within the Treasury.
Initially, income was used to fund the overseas education of princes, honoraria for palace officials, the upkeep of concubines and to maintain the public presence of the royal institution. However, as surpluses accrued, members of the royal family began using Privy Purse funds for investments in commercial real estate and infrastructure development. There was no better time for such an investment institution to come to market. Thailand at the turn of the century was a rapidly developing country, a Southeast Asian entrepot in a colonial-era trading economy.
Between to , more than roads were built. Tax revenue skyrocketed with a system of centralized tax collection under the Treasury Department. This not only increased Privy Purse funding, but also increased opportunities for investment.
In addition to accumulating land in Bangkok, the Privy Purse Bureau founded two other organizations: the Siam Commercial Bank, established in as the first Thai bank , and the Siam Cement Company, established in to make investments in various parts of the growing economy. Its lending and land accumulation activities were synergistic, as the land was often obtained through mortgages when non-business minded aristocrats and senior bureaucrats failed to repay their debts to SCB.
