Highlights
– Former PM Thaksin returned to Thailand 17 months after being ousted by a military led coup
– Low voter turnout for Senate elections illustrates growing political tensions
– Political situation will likely remain tense for the near-term
On February 28, 2008, former Prime Minister (PM) Thaksin Shinawatra returned to Thailand after 17 months of self-exile. An estimated 2,000 people welcomed him at Bangkok’s international airport, where he was arrested and taken to court to face charges of abuse of power. He was later released on bail of eight million baht (US$267,000).
Thaksin’s return comes just two months after the People Power Party (PPP), the pro-Thaksin party, won the majority of lower house seats in the first polls since the September 2006 military coup. On January 28, 2008, PPP party leader, Samak Sundaravej was selected as the new PM, although many anticipate that he will keep Thaksin as a close advisor.
A Controversial Homecoming
Less than two months after Thaksin’s wife, Pojaman Sinawatra, returned to Thailand, Thaksin himself returned, kissing the ground outside the terminal at the Bangkok airport (Previous Report). After the December 2007 elections, Thaksin announced he would return to Thailand sometime in April 2008, but on February 25, 2008, he revealed that his plans had changed and he would instead return by the end of the month.
Despite a large population of politically active supporters, the former PM has a difficult road ahead of him. He faces several legal battles, including charges related to the purchase of land in central Bangkok and an alleged attempt to conceal assets, violating the stock-trading law.
Low Voter Turnout
Three days after Thaksin’s emotional return elections were held for 76 seats in the Senate. Only 56 percent of the electorate participated in the election, despite early estimates that anticipated more than a 70 percent voter turnout. Voter apathy is likely the result of the new constitution, drafted by the military, in which nearly half of the upper house is appointed, not elected.
Controversial actions, to include filling the upper house with his own supporters and political allies, contributed to Thaksin’s demise. Following his ousting, the military inserted the provision that 74 members of the Senate would be appointed to ensure that power is not concentrated in the hands of the prime minister, but rather the Senate controls significant powers such as firing cabinet ministers and impeaching the prime minister. As such, the members are not permitted to maintain ties to any one political party.
The PPP did not have as strong a victory in the upper house as they did in the lower house polls, which will likely lead to battles between the two houses in the near-term.
Outlook for Thailand
Following his conviction on charges of political fraud in the April 2006 elections, Thaksin was barred from participating in politics for five years. However, the PPP will continue to serve as a proxy party for Thaksin and his dissolved Thai Rak Thai (TRT) party. While many speculate that Thaksin may become an advisor for the new PM, Samak, has vehemently denies these charges. Thaksin also denies the allegation saying he will leave the political scene and focus more on “social work, education and sports.”
Nevertheless, many Thai businesses are worried that Thaksin’s return may weaken the government’s new economic policies. Although he spearheaded many positive economic reforms during his time in office, the political uncertainty before and after the September 2006 coup discouraged foreign investment and ultimately hurt the Thai economy. While Thailand will likely experience an economic slowdown in the near-term as investors continue to exercise caution during volatile political times, it is unlikely to experience the difficulties reminiscent of late-2006.
We believe Thaksin will likely keep his word and resist involving himself in politics for the near-term. However, contrary to his stated intentions, it is more likely he will focus on his impending legal battles. The proceedings begin March 12, 2008, with formal discussion with judges. If he receives permission from the court it is likely Thaksin will soon return to the United Kingdom.
