Thaksin’s Friends Are in Power

thai-ppp

On Friday, lawmakers will likely elect PPP leader Samak Sundaravej as the country’s third prime minister in three years

Thaksin Shinawatra has proven to be hard guy to get rid of. The generals who thought they had ended Thaksin’s populist grip on Thailand with a coup in September 2006 couldn’t do much more except look on as the exiled former premier’s allies in the People Power Party returned to power in an elected parliament on Monday.

Although the party nearly won an outright majority in last month’s election with 233 seats, its path to power remained uncertain until the Supreme Court Friday tossed out a lawsuit from a Democrat Party member that aimed to void the poll results and dissolve the PPP. The next day the PPP announced a coalition with five other parties that would give it 315 seats. The Democrat Party, which finished second in the polls, is alone in opposition.

The resurgence of the Thaksin forces and their control of the parliament – albeit in a far weaker position than pre-coup – means that the generals who ousted him will likely have to begin the path toward some form of reconciliation. Already the emergence of a softer line from the coup leaders is evident.

On Friday, lawmakers will likely elect PPP leader Samak Sundaravej as the country’s third prime minister in three years and 25th since the absolute monarchy ended in 1932. He will replace military-appointed Prime Minister Surayud Chulanont, who will likely return to his position on King Bhumibol Adulyadej’s privy council.

Many analysts doubt that the brash right-winger Samak can help the country achieve reconciliation after the last few tumultuous years, and the business community has given him a lukewarm response so far. Samak remains under investigation for corruption while he served as Bangkok’s mayor and is a known enemy of Prem Tinsulanonda, a widely respected former prime minister and head of the privy council. Some PPP members also accuse Prem of masterminding the coup that ousted Thaksin.

Samak’s government will be significantly weaker than the one led by Thaksin and his Thai Rak Thai party two years ago. In successive elections, Thai Rak Thai proved to be the most popular political party in Thai history – and a perceived threat to the old Thai establishment as its power began to rival that of the monarchy. The military-appointed government pushed through a new constitution that limits the political space considerably in favor of non-elected actors. It also weakens the hand of the executive, which could make it difficult for the PPP to implement its agenda – particularly with five coalition partners to keep on board.

“The government will be under a lot of pressure to deliver, as people are sick of the coup leaders,” said Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Chulalongkorn University. “Pent-up expectations will pressure policy performance, and overhang from election fraud cases could constrain the coalition. If PPP can manage to control the key macroeconomic ministries it will bring limited clarity on economic policy, although it will certainly be better than under Surayud’s government.”

For all the uncertainty that could potentially derail the PPP, the generals and the pro-Thaksin camp appear to be meandering toward an agreement that will tentatively move the country forward. Small signs of a deal between the coup leaders and Thaksin, who remains in exile, are popping up, although both sides will move cautiously.

“We sense a change in attitude” from the coup group, PPP deputy secretary-general Noppadol Pattama said in an interview Monday.

Topping PPP’s agenda will be changes to the junta-drafted constitution and the implementation of Thaksin’s populist economic agenda. However, the party expects resistance from the Senate, nearly half of which will be appointed by a panel friendly to the military.

“We will look to amend the constitution to make it more democratic,” Noppadol said. The PPP wants the entire Senate to be elected and to change the voting system back to one vote per constituency instead of the multiple voting system installed after the coup, he added. Both provisions were originally in the 1997 constitution torn up by the generals when they ousted Thaksin.

Within the first 100 days, PPP plans to put its stamp on economic policy. The junta’s efforts to water down Thaksin’s populist agenda and implement the king’s vague “sufficiency economy” philosophy mostly caused confusion that led to falls in both consumption and investment.

Although the return of an elected legislature should reassure some investors, the economic challenges are still great. Fears over a recession in the US and rising energy prices are boosting inflation, which could give policymakers less room to stimulate the economy.

“PPP will set up the government with a lot of party stalwarts, and then try to negotiate the minefield that lies ahead,” said a PPP economic adviser. “The first step is to regain the trust and confidence of investors. We hope to implement the megaprojects and the populist program, which will be payback to voters in the north and northeast.”

The front runner for finance minister now appears to be Surapong Suebwonglee, a former student leader in the 1970s who is not known for his financial acumen.

“The Senate will go against us all the way,” the adviser said. “There is no point bringing in a name brand as finance minister if he won’t do the hard things like bringing the baht to 35 [to the dollar, from about 31] and firing the central bank governor. The kind of program we are proposing is a major restructuring and we face many obstacles.”

Many analysts are looking for signs of a détente between Thaksin and the coup group. The most tangible indication so far was the return of Pojaman Shinawatra, Thaksin’s wife, to face corruption charges.

“Pojaman would not have returned unless some deal had been struck,” said a senior PPP member, speaking on condition of anonymity.

Many party members see Pojaman’s return as a test run for when Thaksin eventually comes back, perhaps in a few months if all goes smoothly for PPP. Pojaman also allows the Thaksin to claim credit for PPP’s election win and can help solve any infighting within the PPP as she is his clear representative.

Some reports suggested Pojaman has already met with the new army chief Anupong Paochinda, and indeed the general has said he’s willing to talk to her “for the sake of national reconciliation.” Thaksin has told reporters he wants to prostrate himself at the king’s feet, a show of respect essential for his return.

Many analysts are watching to see how PPP handles the defense portfolio. Some reports have tipped Samak to concurrently serve as prime minister and defense minister, although the army has made it clear it prefers former army chief General Prawit Wongsuwan. Interestingly, earlier this month the army nominated General Lertrat Rattanawanich to be its Senate candidate even though he was sidelined after the coup for his close relationship to Thaksin.

Already key cases against Thaksin have been dropped, including one involving the bloody 2003 War on Drugs. Surayud announced on Sunday that an independent inquiry into the three-month drug war, which resulted in more than 2,500 extrajudicial killings, found no evidence to prosecute Thaksin or his cabinet.

The Thai-language Matichon newspaper reported Monday that an appeals panel overturned a Revenue Department order that required Thaksin’s brother-in-law to pay more than 546 million baht in unpaid taxes. This could signal that it’s possible for Thaksin to get the nearly $2 billion in proceeds from his family’s sale of Shin Corp to Singapore’s Temasek Holdings that has been frozen was frozen by the assets panel.

The junta-created Assets Scrutiny Committee also may face the chopping block as many expect a deal between Thaksin and the coup group to do away with most cases against the former premier. Kaewsan Atibodhi, the committee’s secretary-general, said he hopes to bring 15 cases to the attorney general for prosecution within the next three months.

“We still have three months to bargain with the attorney general – if we have a chance to do so,” he said in an interview. “It depends on the attorney general’s judgment whether they think it is proper to drop some cases.”

Even so, he said, the panel has the authority under the law that created it to bring cases directly to the courts if the attorney general tosses them out, a move that could provoke a battle in the parliament with Thaksin’s allies.

The next few months will reveal whether the two opposing forces can call the coup a draw and put the country on a path to stability. The way forward remains hazy.

“Thaksin can’t come back and expect a free slate; he must face some charges, otherwise the system will be a joke,” said Thitinan from Chulalongkorn University. “But the coup-makers must also realize that they lost. They must make a compromise; otherwise we’ll have a protracted struggle that goes on and on.”