Asia

Thai anti-government protesters march, consumer confidence slumps

09 Jan 2014 - {{hitsCtrl.values.hits}}

Protesters trying to topple Thailand's prime minister marched in Bangkok again on Thursday, testing support for a planned "shutdown" of the capital next week, and a survey showed consumer confidence slumped last month because of the crisis.

Caretaker Prime Minister Yingluck Shinawatra has called an election for February 2 but the protesters, aware she would probably win on the back of support in the rural north and northeast, want her to step down and be replaced by an appointed "people's council" to push through electoral reforms.

The protests took off in November when the government tried to force through a political amnesty bill that would have let former premier Thaksin Shinawatra, Yingluck's brother, return from self-exile without serving jail time for corruption.

On Thursday, the protesters marched from their camp at Democracy Monument in the historic quarter, drumming up support for Monday when they plan to blockade main roads and prevent government ministries from functioning.

The turmoil is the latest twist in a conflict pitting Bangkok's middle class and royalist establishment against the mostly rural supporters of Yingluck and Thaksin, who was ousted as prime minister in a military coup in 2006.

The demonstrations have been mostly peaceful but sporadic violence has flared since late November and protest leader Suthep Thaugsuban has shown no sign of compromise.

The survey from the University of the Thai Chamber of Commerce showed consumer confidence fell for the ninth month in December and was at its lowest level since the beginning of 2012, when the country was recovering from devastating floods.

"The political situation is still unclear, keeping pressure on consumer confidence. It may not recover until early in the second quarter, at the soonest," Professor of Economics Thanavath Phonvichai told a news conference, adding the economy might only grow 1.0 to 2.0 percent in the first quarter.

Consumer spending helped prop up the economy in 2013 when exports remained weak, so the drop in confidence, along with cancellations by tourists and a delay to huge infrastructure projects, looks likely to hurt growth this year.

A deputy prime minister said on Monday gross domestic product could grow just 3.0 to 3.5 percent this year rather than a projected 4.0 to 5.0 percent if 2 trillion baht ($60.50 billion) in public works was delayed by the political vacuum.

The infrastructure projects are also being contested in the courts by the opposition Democrat Party, which says they would be open to corruption because of the way Yingluck's government was managing them outside the normal budgetary process.

The Supreme Court may rule on Thursday on a separate 350 billion baht flood-management program, already suspended by the courts because of the need for environmental studies.

Other judicial problems are piling up for Yingluck and her Puea Thai Party.

On Tuesday, the National Anti-Corruption Commission (NACC) decided to press charges against 308 former lawmakers, mostly from Puea Thai, for trying to change the constitution to make the Senate a fully elected chamber. The Constitutional Court ruled such an amendment illegal in November.

The charges could have implications for the lawmakers' participation in the February 2 election, or whether they could remain in parliament if they won seats.

On Wednesday, the Constitutional Court also ruled it had been illegal to try to alter another part of the constitution to make it easier for the government to sign international agreements without seeking approval from parliament.

The NACC could take up the case and, in theory, cabinet members could face a ban from politics.

It is unclear how quickly the case will proceed but Puea Thai officials have expressed concern at the speed with which such matters are being processed, in contrast to cases against opposition figures including protest leader Suthep Thaugsuban that have languished in the courts for years.

COUP RUMOURS

The judiciary has intervened several times in the past to throw out governments allied to Thaksin while rumors of a coup are rife although the army has tried to stay neutral this time.

Thaksin is reviled by a royalist establishment, including top generals, that feels threatened by his rise and a middle class that resents what it sees as its taxes being spent on wasteful populist policies that amount to vote-buying.

One such policy - a rice-buying scheme under which the government buys grain from farmers at way above the market price - has backfired spectacularly because it has priced Thai rice out of the export market it used to dominate.

Some rice farmers have joined the protests because they have not been paid for months and the state bank running the scheme will try to get funds to keep it going by selling a bond next week. A similar sale flopped in November.

The protesters say Thaksin runs Yingluck's government from Dubai and they want to eradicate the political influence of his family by altering electoral arrangements in ways they have not specified, along with other political reforms.

Any delay in electing a new government would have economic consequences because her caretaker cabinet is not supposed to make policy decisions that commit the next administration.

Financial markets have suffered and the baht recently hit a four-year low, but it has now stabilized around 33 per dollar and the stock market has also tried to rally, helped by foreign buying in fairly thin trading.

The main index, which had at one stage this week fallen around 14 percent since the start of November, rose 1.1 percent by 0430 GMT on Thursday. ($1 = 33.0600 baht)

(Additional reporting by Viparat Jantraprap; Writing by Alan Raybould; Editing by Robert Birsel)

(Source : Reuters)

Asia

Thai anti-government protesters march, consumer confidence slumps

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