ASEAN KEY DESTINATIONS
May 27, 2008
A new round of street protests in Thailand between supporters of former Prime Minister Thaksin Shinawatra and his opponents could drag the army back into the forefront of politics and scare off foreign investors, Reuters quoted analysts as saying.
Five months after a general election meant to return a deeply polarised nation back to democracy, about 5,000 opponents of the coalition government, which backs Thaksin, held a rally in the capital on Sunday.
About two dozen people were wounded in clashes between anti-Thaksin protesters and his supporters at the rally, which organisers said was a bid to stop the government from amending the 2007 army-designed constitution to benefit Thaksin.
"If it gets to be a prolonged violent confrontation in the streets that leads to loss of lives, that would be a customary pretext for a coup to restore peace," Thitinan Pongsudhirak, an analyst at Chulalongkorn University, said on Monday. "At this rate, we may be heading in that direction," he said.
The putsch, the first in 15 years, unsettled the economy and foreign investors. One of the reasons cited by the generals for the coup was to prevent bloodshed between rivals and supporters of Thaksin, who insist he is out of politics after returning from exile in February.
Army chief Anupong Paochinda, a 2006 coup leader who has said he will not stage another coup, warned on Monday that Thai police had to prevent the street protests from getting out of hand. "The situation must not escalate or the country will be damaged," Anupong told reporters.
Organisers of Sunday's rally, the same group which led the street campaign against Thaksin, set up camp near Government House on Monday.
They vowed not to leave until members of the six-party ruling coalition withdrew a parliamentary motion to amend the post-coup charter, a move which would ensure that an investigative body probing alleged graft by Thaksin and his allies would continue.
Fears of renewed political strife hit investor sentiment, with Thailand's main stock index ending down just over 2 percent. The market was also unsettled by weak overseas bourses and high oil prices, analysts said.
"This is the instant fallout from the rally, which might put more pressure on the market in the next couple of days," Viriya Lappromrattana, an analyst at Kriatnakin Securities, said.
Bank of Thailand chief economist Amara Sripayak also warned that political roiling could hurt investor sentiment.
"It's not good that while the government is fixing the economy it has to worry about political issues. The uncertainty may prompt foreign investors to wait and see," she told reporters.
Thailand's economic growth slowed in the first quarter as inflation dragged on growth, the state planning agency said on Monday. But the agency left its full-year growth forecast unchanged at 4.5-5.5 percent, after the economy grew 4.8 percent in 2007.