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Thai interim government – testing the ground

Updated On: Oct 20, 2006

Just after the September 19 coup, there were many speculations that the junta would not reinstate democracy in the kingdom despite promises of an interim government staying for only 12 months. 

Now that the Prime Minister's Office has sounded out a proposition that “the government may have to stay on in office for 17 months in total due to the lengthy process of drafting a charter and organising a general election”, many political watchers are up in arms.

According to the Bangkok Post, acting Thai Rak Thai party leader Chaturon Chaisaeng said if the government reneged on its 12-month tenure promise, it would be seen as unwilling to relinquish power and such illegitimacy “could spell trouble for the administration”. He added that there should be “approval from the people” if this occurred.

The People's Alliance for Democracy (PAD) coordinator Suriyasai Katasila explained the government’s proposal was untenable because the drafting of the new charter would be based on the 1997 constitution, and not “from scratch”. Moreover, if the government really needed more time to complete its tasks, “it must officially explain to the people or the National Legislative Council, setting a definite timeframe for its tasks to be accomplished”. “They just can't extend their stay at a whim or fish for reactions,” he criticized.

The Nation has pointed out that the lifting of the ban on political gatherings of five or more people is little consolation for the freedom of speech and opinion Thais used to enjoy, especially since “mass protests were still prohibited and any party or civic activities could only be held in private venues such as a university auditorium or convention centre”.

This move by the interim regime, supposedly to bolster political participation, is really meant to prevent the resurrection of the Thai Rak Thai party. This is evidenced in that “the ban on political gatherings of five or more people had been violated several times, as some political activists [had] held anti-coup meetings in universities or public venues” but the authorities had not cracked down upon them as “they made no impact on the balance of power” and “arrests could ruin the image of the junta” which is trying to convince people of its legitimacy.

As to the deep South, Thai Prime Minister Surayud Chulanont reaffirmed that Thailand will resolve the unrest peacefully, during his visit to Malaysia. He explained his personal strategy as one which would engage “a lot of people” while “suggestions from [Malaysia] would be appreciated”.

Malaysia PM Abdullah Badawi said, “For Malaysia, we would like to see southern Thailand as an area that is peaceful, where the Thais –many of whom are Muslims –will be able to live in peace without fear.” In addition, Malaysia will render help but will not interfere in Thai domestic affairs.

Interestingly, Gen. Surayud “did not seek the repatriation of 130 Thai Muslims who fled to Malaysia” last August. According to the Star, the two leaders had “agreed that the Thai Muslims [were] welcome to ‘return in peace’ to Thailand”. However, Abdullah said that Malaysia was “willing to host their presence” and that it was “normal for many Thai Muslims who ‘profess allegiance to Malaysia’ to cross over to Malaysia”. Such regular border crossings were not to be interpreted negatively, Abdullah added.

Surayud will visit IndonesiaVietnam and the Philippines in the coming weeks, having visited Cambodia and Laos already.

On the Shin Corp-Temasek issue, the Nation has reported that Thai fund companies are interested in buying the Shin Corp shares Temasek will release to ensure a 49% stake in accord with the Foreign Business Act. Asoke Wongcha-um, senior executive vice president of Kasikorn Asset Management and Maris Tarab, managing director of ING Asset Management said their companies were ready to invest if the price was reasonable and beneficial.

Meanwhile, the latest news from the interim Commerce Ministry could salvage the Shin Corp-Temasek mess, as well as set other foreign investors’ hearts at ease. Commerce Minister Krirk-krai Jirapaet announced that amnesty could be given to “foreign joint ventures in violation of the Foreign Business Act in order to resolve problems with the use of nominees”.

Mr Krirk-krai said he would steer the ministry to “amend various laws to suit the needs of the investors and the free-market economy”. He told the Bangkok Post, “If there's something that is not right about the structure, then we'll adjust it, but if we try to mix politics and business together then we will be stuck, and in this case the biggest loser will be the economy and the investors' confidence in the Thai economy… Once we have the laws ready, then we'll discuss it… [If our] aim is to seek help in development of the country, especially in sectors in which we cannot compete, then why don't [we] give them 51%?”

Many investment bankers have hailed this proposal as forward-looking as presently “13,000 companies have nominee structures and fears of consequences arising from the Shin-Temasek investigations have prompted many investors to put decisions on hold”. Lance Depew, investment manager at Quest Capital, which manages $240 million in assets in Thailand, said, “The legal changes would bring the government's policy in line with reality as in the past the governments had turned a blind eye to the shareholding structures of companies.”

Sources:

Govt. warned not to cling on to power (Bangkok Post, 19 October 2006)

Martial law only eased slightly (Nation, 19 October 2006)PM to end southern unrest 'peacefully' (Bangkok Post, 19 October 2006)KL backs 'peace' for far South (Bangkok Post, 19 October 2006)

Thai PM says he will resolve southern Muslim problem by peaceful means (Star, 19 October 2006)

Local fund companies interested in Shin stock if price is right (Nation, 19 October 2006)

Minister ponders nominee amnesty (Bangkok Post, 19 October 2006)