(Corrects description of company in 16th paragraph.)
July 1 (Bloomberg) -- Thailand’s leading contenders in an election two days from now will make their final appeals to voters at dueling rallies in Bangkok tonight as all sides affirmed the intention to abide by the results.
Polls show Pheu Thai, a party comprising allies of exiled former leader Thaksin Shinawatra, is poised to win a fifth straight election, ahead of Prime Minister Abhisit Vejjajiva’s Democrats. The last three victories for Thaksin-linked parties were overturned through court decisions and a coup, an option Army Chief Prayuth Chan-Ocha signaled yesterday that he opposed.
All parties must accept that “who gets the majority vote will have the right to form the government,” Yingluck Shinawatra, Thaksin’s sister and Pheu Thai leader, told reporters yesterday. Abhisit, campaigning in Bangkok, said he foresaw no problems after the vote “as everyone has to respect the rule of law.”
A smooth outcome may reassure investors who sold Thai stocks last month on concern a disputed result would lead to a repeat of violent clashes that claimed more than 100 lives after the 2007 election. While polls show Pheu Thai may win the most seats, it remains unclear whether the opposition party will secure an outright majority and avoid legal challenges or military intervention, according to Goldman Sachs Group Inc.
“The political turbulence has had an impact on the underlying economy and a degree of stability is becoming increasingly crucial going forward,” Goldman economist Mark Tan wrote in a report yesterday.
No Military Intervention
Thai inflation held near a 32-month high in June after food prices increased, the Ministry of Commerce said today. The Bank of Thailand last month raised the nation’s benchmark interest rate for the fourth straight time to 3 percent, and signaled further increases may be needed to curb rising prices.
General Prayuth pledged yesterday that the military would be neutral. Thailand has had 10 coups since 1932, the latest in 2006 against Thaksin, who has remained politically active from overseas since fleeing a jail sentence for abuse of power three years ago.
“In the past, when the country’s problems can’t be solved and the army came out to solve it, that wasn’t right,” Prayuth told reporters. “We have to move forward under a democratic path without any chaos.”
Concerns of post-election violence helped knock 3 percent off the benchmark SET Index in June, the biggest monthly drop since January, with state-owned Thai Airways International Pcl losing 18 percent. Thailand’s baht fell 1.4 percent in that time, declining two months in a row for the first time since the end of protests a year ago that claimed 91 lives.
Thailand’s financial markets are closed today for a public holiday.
Election laws require candidates to halt campaigning at 6 p.m. tomorrow through election day, with violators facing a 10,000 baht ($326) fine and six months in prison. About 100 police officers will monitor comments made on about 1,000 websites, including Twitter and Facebook, according to spokesman Prawut Thavornsiri.
About 70 percent of Thailand’s 67 million people are eligible to vote on July 3, with polls closing at 3 p.m. and unofficial results announced after 8 p.m., according to Election Commission spokesman Paiboon Lekprom. The agency will certify winning candidates within 30 days, after which Parliament will meet to pick a prime minister.
The Asian Network for Free Elections, the only foreign group monitoring the polls, expressed concern that an excessive number of extra ballots were printed in violation of Thailand’s election laws. The Election Commission also has “too wide” a latitude in sanctioning candidates, said Damaso Magbual, one of the lead members of the organization.
The law is “a little bit vague” on the criteria for disqualifying candidates, he told reporters yesterday. “This should really be defined so that it is not used as a tool of repression.”
Pro-Thaksin parties have won at least 49 percent of seats in the past four elections. If they fail to win a majority, they will need to rely on smaller parties that won 17 percent of the vote in 2007 to form a government.
Pheu Thai “should be able to form a workable coalition” if it wins more than 235 seats, or 47 percent in the 500-member House of Representatives, according to Vriens & Partners, a Singapore-based political risk firm.
Margin of Victory
“The margin of Pheu Thai victory will be of great importance in determining the reactions of key players,” Vriens & Partners said in a pre-election report. A thin margin means “the military will be tempted to intervene as it did in 2008, pressuring smaller parties to renew their alliance with the Democrats.”
A poll released June 19 by the Bangkok-based Suan Dusit Rajabhat University showed Pheu Thai with 52 percent of the vote and the Democrats with 34 percent.
Abhisit took power in a 2008 parliamentary vote after coalition members and defectors abandoned Thaksin when a court disbanded his party for election fraud. The decision came amid a seizure of Bangkok’s airports by Thaksin’s opponents that disrupted trade and stranded thousands of tourists.
Both parties are pledging minimum wage increases, cash handouts to the elderly and price support for farmers in a bid to woo poorer voters in the north and northeast that account for more than half of the population. Voters in the regions have stayed loyal to Thaksin after he gave them affordable health care and cheap loans.
“My dad misses Thailand and the Thai people, and we all miss him,” Pintongta Shinawatra, Thaksin’s daughter, said while campaigning yesterday. “This is all we talk about.”
--With assistance from Suttinee Yuvejwattana, Anuchit Nguyen and Supunnabul Suwannakij in Bangkok. Editors: Tony Jordan, Paul Tighe
To contact the reporter on this story: Daniel Ten Kate in Bangkok at firstname.lastname@example.org
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