Bloomberg News

Thailand's Premier Thaksin to Meet Opposition Leaders

February 27, 2006

Thailand's Prime Minister Thaksin Shinawatra will meet leaders of the three main political opposition parties today after they threatened to boycott a snap election he called for April 2.

The premier agreed in principle to establish an independent committee to amend Thailand's constitution, and that changes ``should be'' subject to a national referendum, he said in a speech televised live. His political opponents demand that he sign a ``reform agreement'' at the meeting, which will be held at the senate building in Bangkok at 6 p.m. local time.

Members of Thailand's three opposition parties -- Democrat, Chart Thai and Muan Chon -- said earlier today only a personal meeting with Thaksin to agree on political and constitutional reforms can help avoid a political crisis and a boycott of the poll, which he announced amid rising calls for his resignation.

``Only Thaksin and nobody else from his Thai Rak Thai party must attend the meeting today,'' Democrat leader Abhisit Vejjajiva said in a television interview. ``We don't want any agreement without final authority because they may change it later because Thaksin did not agree with it.''

Proposals

Thaksin, whose Thai Rak Thai, or ``Thais Love Thais'' party last year won an unprecedented second term with a record 375 out of 500 seats, dissolved parliament on Feb. 24 and called a new election which allows just five weeks of campaigning under rules which restrict who can be a candidate.

Thaksin called on parties to present their constitutional amendment proposals during the short election campaign in the lead up to the April 2 poll.

``This would represent a social contract, that if one party is elected it will implement its proposals,'' Thaksin said today. ``In the meantime I call on all sides to strictly conform to the democratic process for the peace of the country.''

Thailand's benchmark stock SET Index rose 1.5 percent to 753.10 at the 4:30 p.m. close on expectations political tensions are easing. The baht rose 0.5 percent to 39.21 against the U.S. dollar. The price of the benchmark 5 percent bond due December 2014 rose 0.3441, or 3.4 baht per 1,000 baht face amount, to 98.3650. Its yield fell 5 basis points, or 0.05 percentage point, to 5.235 percent as of 4:50 p.m., according to Deutsche Bank AG. Bond prices move inversely to yields.

Attacks Intensify

Calls for Thaksin, 56, to step down intensified after his family last month sold its stake in communications company Shin Corp. to Singapore's Temasek Holdings Pte, netting a tax-free $1.9 billion. Thaksin also faces attacks over media freedom, ministerial ethics, education reforms, planned sales of shares in public utilities, and Muslim unrest in the south.

The 37 days between dissolving parliament and the poll prevents any existing members of parliament from switching allegiance, or any new candidates joining parties, because Thailand's constitution requires a minimum 90-day party membership before individuals can stand for election.

The date chosen is also close to the April 19 election scheduled for Thailand's 200 senators, who serve six-year terms and are not aligned to political parties.

None of Thaksin's political opponents have explained what constitutional reforms they are proposing. Chart Thai party leader Banharn Silpa-archa called for an independent commission to supervise changes.

Rally

An independent commission would ensure ``the election is more fair and transparent and avoid a future political crisis as we have now,'' he told Channel 3.

Thaksin today was forced to enter his government house offices via a side door as about 2,000 farmers protested at the main entrance, appealing for more debt relief. He refused to answer reporters' questions.

Opponents yesterday held an anti-Thaksin rally downtown that attracted about 43,000 protesters, according to Pinit Maneerut, a police spokesman, with other estimates as high as 100,000. Today hundreds remained at the site, Sanam Luang park, and thousands more have vowed to return each evening until Thaksin resigns. The park was the scene of past protests, including a 1976 military crackdown on a student rally that left dozens dead or wounded.

Rallies attacking Thaksin have been held in the capital Bangkok almost weekly since November, initially led by the prime minister's former friend Sondhi Limthongkul, a media magnate and co-host of a show banned from state television.

Concerns

If the early election proceeds Thaksin ``will be returned to power with a smaller majority,'' James McCormack, Fitch's head of Asian sovereign ratings said in an interview with Bloomberg Television today. ``The concern we have is what it means for economic policy and reforms. That agenda hadn't been moving very quickly forward at all in Thailand and is probably going to slow down as a result of'' the political tensions.

Thaksin enjoys strong support outside of the capital, where only about 10 million of the nation's 65 million people live, analysts said. The rural population has benefited from farmer- friendly policies and cheap loans and medical care for villagers, while Bangkok remains snarled in traffic jams because of delays in building mass transit systems.

Thaksin sweetened his pledges on Feb. 25 -- just hours after calling the snap poll -- announcing his government plans to spend at least 10 billion baht ($253.8 million) to help repay farmers' debts and increase salaries of state employees.

The measures are aimed at helping poorer people cope with rising fuel costs and inflation, Thaksin said in his weekly radio address.

The opposition Democrat party earlier this month acknowledged it would struggle to compete in a snap poll.

``The chance of him winning a new mandate, you have to admit, is high,'' said Korn Chatikavanij, Democrat deputy secretary general and the former head of JPMorgan Chase & Co.'s Thai unit said Feb. 8. ``The Democrats are not really ready for an election. Thaksin genuinely is very popular in the provinces.''

To contact the reporters on this story: Beth Jinks in Bangkok at bjinks1@bloomberg.net

To contact the editor responsible for this story: Bruce Grant at bruceg@bloomberg.net


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