Bloomberg News

Yingluck Pressured as Thailand Ministries Seized

November 25, 2013

Anti-government Protesters

Anti-government protesters occupy the Finance ministry and the Foreign Ministry in a bid to oust the current government of Prime Minister Yingluck Shinawatra in Bangkok on Nov. 25, 2013. Photographer: Paula Bronstein/Getty Images

Thai protesters occupied compounds housing two government ministries, escalating a monthlong effort to oust Prime Minister Yingluck Shinawatra and dismantle the network of her brother, former premier Thaksin Shinawatra.

Suthep Thaugsuban, who oversaw a deadly crackdown on Thaksin’s supporters in 2010 when the opposition Democrat party was in power, urged demonstrators to seize more government offices and called on civil servants to join what he called a “people’s revolution.”

Yingluck and members of her ruling Pheu Thai party face a two-day confidence debate in parliament starting today after the opposition accused them of corruption and trying to pass laws to exonerate Thaksin of crimes he allegedly committed in office. The premier said the protests may dent confidence and economic growth in a country that has been wracked by political violence since Thaksin was removed in a 2006 coup.

“The protesters still lack the backing of forces with the willingness and ability to topple the government quickly,” said Michael Montesano, visiting research fellow at the Institute of Southeast Asian Studies in Singapore. “If disorder spreads, we will see how long those forces are willing to stand aside.”

Yingluck’s administration has struggled to contain weeks of protests against a bill that would have provided amnesty for most political offenses stretching back to the coup, and a separate move to make the senate fully elected. The purpose of the demonstrations has switched from opposing those legislative efforts to ending “suffering under the rule of Thaksin and his people,” Suthep said.

Symbolic Occupation

Demonstrators continued their symbolic occupation of government offices today after erecting a permanent protest stage in the finance ministry’s car park overnight. No major clashes have been reported and authorities plan to negotiate with protesters to get them to leave the compounds, police spokesman Piya Uthayo said yesterday.

Small groups of people broke into the finance ministry, Budget Bureau, foreign ministry and government public relations department, Yingluck, 46, said in a speech late yesterday.

The government extended the use of the Internal Security Act to provinces near Bangkok including Nonthaburi and some districts of Samut Prakarn and Pathumthani until Dec. 31, Yingluck said. The ISA, which has been in effect around Parliament House since Oct. 9, lets authorities close roads, make arrests and take action against any security threats.

No Violence

“Even though we will enforce the law, I want to confirm that we will not use violence,” she said. Yingluck said today that she’s willing to talk to Suthep, who was deputy prime minister when the Democrat party held power.

The army, which ousted Yingluck’s brother while he was attending a United Nations summit in New York in 2006, hasn’t made public comments on the latest protests. Crown Prince Maha Vajiralongkorn, the heir to Thailand’s king, this week urged Thais to heal divisions through dialogue, according to a report on the website of the Thai-language Khaosod newspaper.

Global funds pulled a net $209 million from Thai bonds and equities yesterday, bringing this month’s net sales to $2.3 billion, official data show.

The SET Index (SET) of stocks has fallen 7 percent in the past month, the most in Asia after the Philippines, according to data compiled by Bloomberg. The baht dropped 0.3 percent to 32.085 per dollar as of 9:41 a.m. in Bangkok, falling for a sixth straight day. It reached 32.11 earlier, the weakest level in 11 weeks.

The U.S. expressed concern over the protests. “We urge all sides to refrain from violence, exercise restraint, and respect the rule of law,” State Department spokeswoman Jen Psaki said in an e-mailed statement.

Rural Majority

The battle is the latest between allies of Thaksin who have won the past five elections, and royalists who backed his ouster and claim that parties linked to him govern with a “tyranny of the majority.” Since the military putsch, courts have voided an election won by Thaksin’s party, disbanded two parties linked to him, disqualified about 200 of his allies from politics, sentenced him to jail and seized 46 billion baht ($1.4 billion) of his wealth.

In 2008, protesters pushing for a mostly appointed parliament seized government offices and Bangkok’s airports in a bid to oust Thaksin’s allies, and an army crackdown on a protest by Thaksin supporters in 2010 left more than 90 people dead.

The political upheaval has revealed rifts in Thai society, particularly between the traditional elite and the increasingly vocal rural majority from which Thaksin’s allies pull their electoral mandate. Yingluck’s Pheu Thai party and its coalition partners command a majority in parliament.

Economic Slowdown

The government raised the minimum wage last year and introduced a program in 2011 to buy rice at above-market prices to boost rural incomes. Thailand’s skillful macroeconomic management, strong fundamentals, high international reserves, and moderate public debt levels have blunted the impact of recent shocks and are underpinning a recovery, the International Monetary Fund said Nov. 12.

Southeast Asia’s second-biggest economy expanded 1.3 percent in the third quarter from the preceding three months, and the government’s economic forecaster Nov. 18 cut its forecast for full-year growth to 3 percent from a range of 3.8 percent to 4.3 percent. The Bank of Thailand has held the benchmark interest rate at 2.5 percent in the last three meetings and will probably leave the rate unchanged tomorrow, according to a Bloomberg survey.

“I initially liked the higher wages,” Kanaphat Thanakawiwat, a 42-year-old mother of three from Samutsakorn province on Bangkok’s outskirts, said after entering the finance ministry compound yesterday. “But now I feel the higher wage policy has been bad for the economy. My wage doesn’t rise fast enough to cover the rising cost of living.”

To contact the reporters on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net; Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net


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