Thai Prime Minister Struggles to Find Way Out of Crisis

Thai Prime Minister Struggles to Find Way Out of Crisis

Yingluck Shinawatra Survives No-Confidence Vote, but Faces Mounting Protests


Updated Nov. 28, 2013 6:31 a.m. ET

BANGKOK—When Thailand’s Prime Minister Yingluck Shinawatra was elected in 2011, it looked for a while that the country’s long-running political crisis was over. She built a fragile détente with the army generals who ousted her brother Thaksin Shinawatra in 2006 and set the country on a path to recovery after severe floods crippled industries and shocked supply chains around the world.On Thursday she won a confidence motion in Thailand’s parliament, buoyed by a strong majority that delivered 297 votes in her favor to 134 against, with two abstentions and five no votes.

But now Ms. Yingluck, 46 years old, is facing a bigger test: Tens of thousands of protesters on the streets of Bangkok clamoring for her removal. And this time, political analysts say, it isn’t clear how she will chart a course to safer ground.

For the fourth consecutive day Thursday, protesters spread out across Bangkok to scrub the country clean of what they say is the corrupting influence of the Shinawatra clan. Led by fiery former opposition lawmaker Suthep Thaugsuban, demonstrators have besieged and cut off several key centers of power, including the finance ministry, the information and technology ministry and an immigration bureau, accusing Ms. Yingluck of running the country solely to serve her brother’s interests—a claim she has repeatedly denied.

Early afternoon, dressed in black and appearing stern, Ms. Yingluck appeared on a nationally-televised broadcast to ask demonstrators to withdraw from government facilities and offer talks on resolving the impasse. “The government is willing to cooperate with stakeholders and work out a plan in a way that is acceptable to all parties,” she said.

People who work with Ms. Yingluck say she has climbed a steep learning curve since becoming prime minister. Before the 2011 election, she had no political experience, and instead spent her time running one of Mr. Thaksin’s property companies. During the election campaign, Mr. Thaksin described his sister as his clone, and their Pheu Thai Party campaigned on a slogan of “Thaksin Thinks, Yingluck Does.” Some diplomats in Bangkok credit her with successfully encouraging foreign companies affected by the 2011 floods to reinvest in the country. She has handled Thailand’s armed forces deftly, too, and has been careful not to interfere in annual military reshuffles or limit the military’s share of the national budget.

When opposition leader Abhisit Vejjajiva indirectly referred to her with a profanity in September, Ms. Yingluck shrugged it off and pledged to work harder.

“She is still the best option the government has got. She is not too strong-willed and doesn’t irritate people,” said Pavin Chachavalpongpun, a political science professor at Kyoto University. “She’s not too strong, and not too weak.”

Ms. Yingluck’s Achilles’ heel, though, is her brother.

A former telecommunications billionaire, Mr. Thaksin introduced Thailand to a brash form of populism when he was elected prime minister in 2001. At first it was a success. Cheap health-care schemes and access to easier credit went down well with voters, and he became Thailand’s first civilian leader to be re-elected. The armed forces and other, staunchly royalist Thais worried over the tycoon’s growing influence in the country, and in 2006 the army seized power while Mr. Thaksin attended a United Nations summit in New York.

The years following the putsch were marked by a chain of chaotic protests. Some of them supported Mr. Thaksin and his goal of re-establishing control of Thailand, but many demonstrators loudly rejected Mr. Thaksin’s goal of returning to the country after he fled to Dubai to evade a corruption conviction that he says was politically motivated.

When Ms. Yingluck’s government attempted in November to ram through a wide-ranging amnesty bill that would enable Mr. Thaksin to return to the country a free man, the uproar was immediate and she faced fierce accusations of serving her brother’s interests. Faced with rising protests, Ms. Yingluck abandoned the amnesty proposal, but her retreat didn’t end the protests. Instead, the rallies continued, leaving Ms. Yingluck fewer and fewer options to resolve the deadlock.

Part of Ms. Yingluck’s challenge is to figure out what Mr. Suthep, the main protest leader, is really seeking.

“What’s odd about this protest is that, despite the numbers it has managed to gather, it has not really spelled out any clear objectives,” points out Thorn Pitidol, another professor at Thammasat University. “To make things really impractical, he also rejects dissolving the parliament or the resignation as possible solutions.”

Ms. Yingluck already has rejected Mr. Suthep’s one main suggestion: the creation of a People’s Assembly to run the country composed of specially-appointed leaders from various walks of life. Some analysts such as Somchai Phagapasvivat at Thammasat University say she might opt to call snap elections to clear the air, at least for the time being, to put the country’s focus back on elections that Ms. Yingluck’s party is still well-placed to win.

The question now is how long Mr. Suthep will be able to sustain his protests, and whether Thailand’s security forces will be able to maintain their composure and avoid the kind of chaos that might prompt the armed forces to step in to restore order.

“Ms. Yingluck will be assessing it day by day at the moment,” Mr. Pavin at Kyoto University said. Dec. 5, King Bhumibol Adulyadej’s birthday and a national holiday is approaching, and this might temper the mood in the coming days, he added.

Beyond then, the conflict isn’t likely to let up. “This isn’t about Yingluck. It’s about Thaksin,” Mr. Pavin said. “That’s not going to change.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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