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Weekly wrap up in Thailand (12- 19 April, 2009)

  Key Political Events of the Week

The past week in Thailand is one that would be recorded in history of the country as the collapse of the much hyped Asean Summit in the resort city of Pattaya lead to a series of events which claimed the lives of 2 and injured at least 130 others.

• Although claims are being made that more people were killed and were secretly cremated, the claims have no proof and with the army chief – Anupong Paojinda, having said he vouches his life with this truth that nobody was killed by the military’s action, the rumors have started to die down.

• The United Front for Democracy against Dictatorship (UDD) lead ‘Red Shirt’ protest was crushed and prompted the leaders to go into hiding and the movement to go underground.

The group declared that it would make Bangkok look like the 3-southern provinces in Thailand and that it would return with a vengeance in the near future.

• Just days after the announcement the leader of the People’s Alliance for Democracy (PAD), Sondhi Limthongkul, was the target of assassination when nearly 100 bullets from M-16 and AK-47 riddled his vehicle. The 3 occupants including Mr. Sondhi were severely injured although Mr. Sondhi survived with major surgery undertaken to remove the bullet in his forehead and his chest.
• Meanwhile most of the UDD leaders have surrendered and are still in custody as they await their trial, although some of the key leaders have managed to remain elusive and have vowed not to give in to the authorities.
• Bangkok continues to remain under ‘Emergency Decree’ as the government claims that the situation in the country has not returned to normalcy yet, and there is no specific date given on when it could be lifted.

   The events that took place

  • 1) Red Shirt protestors lead by the United Front for Democracy against Dictatorship (UDD) called out for a mass rally in Bangkok on March 26, which most political pundits thought would last only 2-3 days like most previous UDD rallies.

    The turnout of the rally was well beyond expectations and even the government’s own acknowledgement was 100,000 while the figures reported independently were at least 50-75% higher thus giving the UDD a major boost for prolonging the rally.
  • 2) The UDD seized the areas around the Government House (although they did not enter the premises, a move that the People’s Alliance for Democracy (PAD) had undertaken). The rallies continued until April 9 when a splinter group of the UDD decided to turn up the heat and blockaded the various intersections in the city thus brining Bangkok to a grinding halt.
  • 3) Part of the UDD group moved to the resort town of Pattaya where the Asean + 3 + 6 summit was to take place. The Red shirt were also followed by the ‘Blue Shirt’ a group reportedly backed by the supporter of the Abhisit Vejjajiva’s government – Newin Chidchob.
  • 4) The two (Red & Blue shirt) groups clashed and thus prompted the Red shirt to send more back up from Bangkok, which eventually took the Red shirt to get out of control and this lead to the breaking into the venue of the summit, thus pushing the summit to be cancelled.
  • 5) The government announced an ‘extreme state of emergency’ to give way for the leaders of the various states to be able to get out of the country. The emergency was lifted 6-hours later after all issues were settled.
  • 6) Then Mr. Abhisit decided to take action against the UDD in Bangkok and held a meeting at the Interior Ministry were a decision was made to implement ‘Extreme Emergency Decree’ in Bangkok as well.
  • 7) The decision prompted Red Shirt to become furious and Mr. Abhisit’s car was smashed and so were the occupants (although Mr. Abhisit had gone in a different vehicle).
  • 8) Troops were brought into the city with tanks and arms and this lead to riots in the streets of Bangkok.
  • 9) The clashes lead to community violence that claimed the lives of 2 Nang Loeng area residents and scores injured.
  • 10) After 2 days and nights of chaos in the city, that saw a gas tanker being threatened to be used as a bomb, the situation returned to normalcy and peace returned to the city.
  • 11) The government decided to be more open towards reconciliation with the Red and has offered to open itself to possible talks to heal the wounds although how it would happen is yet to be seen.
  • 12) The government issues arrest warrants and also cancels the passport of former Prime Minister Thaksin Shinawatra to restrict his movement. But Mr. Thaksin has a few other passports including the one he is using currently from Nicaragua.

 

   Key Economic Events of the Week

On the economic front the key news for the week were as follows

• The National Economic Social Development Board (NESDB) has said that the problems in the political situation in the country would likely delay the country’s economic recovery by at least 12-months.

• The country’s ratings have already been lowered by Standard & Poor’s and Fitch Ratings ratings agency and Moody’s Investors Service is looking to follow suit. S&P lowered Thailand’s local currency rating to ‘A-’

• Equity markets remained vibrant despite the problems as calmness returned to the streets of the city. The markets were open only on Thursday and Friday.

• The government is set to consider the impact of the ‘Emergency Decree’ on the tourism sector today and is likely to approve various measures to stimulate the sector as it is the sector that would most likely be the hardest hit.

  • The tourism sector is set to lose close to 190 billion baht in revenues from the political problems and close to 250,000 people could be made redundant in the sector.
  • Airlines such as Cathay Pacific, Hong Kong Express and Dragon Air are contemplating cancelling their flights to Bangkok amid sharp decline in tourism.

 
• Automobile market saw shrinkage of 33% in the first quarter this year as sales in the market stood at a mere 107,774 cars, with the sports utilities vehicle (SUV) segment being one of the worst performing after the sector saw a shrinkage of as much as 50%.
• The special Cabinet meeting today (April 17, 2009) approved a plan for the Ministry of Finance to borrow an additional 94 billion baht from domestic sources to whether the economic storm. The ministry plans to take out domestic loans from June 2009 mostly through government bonds.
• Manop Pongsathat, a lecturer in architecture at Chulalongkorn University, warned of severe impacts from the recent political riots caused by the United Front for Democracy against Dictatorship (UDD) on Thailand’s economy saying that the country’s economy could see further decline from the problems that the country was facing.
• The Government is set to inject more funds into the stimulus measures in order to bring back some confidence in the country’s economic potentials.
• The losses from the abrupt closure of the Asean Summit and the violence could cost the country around 200 billion baht (100 billion from loss of tourism revenue alone – against 120 billion baht that was lost during the closure of Suvarnabhumi airport by the PAD).

 

   The Week’s Economic events in details

• Although the Bank of Thailand will come up with its latest growth forecast next week, it will not be in a position to reflect the damage done to the economy from the recent political unrest. The political developments will, however, be taken into account in the bank's May forecast, when it expects the lower range of next week's projection to be the order of the day. The central bank said yesterday that the business sector's financing costs would be adversely affected by the unrest, due to the escalating risk premium resulting from downgraded sovereign credit ratings.

• Reports are emerging that the coalition leaders are pressuring Prime Minister Abhisit Vejjajiva for changes in the Cabinet line-up involving two key figures from his Democrat Party, sources in the government say. Leaders from other coalition parties have asked the prime minister to replace Deputy Prime Minister Korbsak Sabhavasu, who is in charge of economic affairs, and Foreign Minister Kasit Piromya, according to the sources.
• The Government is considering what measures are needed to help bring back the industry to health including increasing the stimulus spending that the government has already undertaken.

 

 

Source: ThaiNews Corp. (www.ThaiNews.co.th) is a pioneer online news service provider‚  offering a comprehensive business and political coverage of Thailand in English.