Thailand in political limbo with vote re-runs seen in April

Thailand in political limbo with vote re-runs seen in April

7:48am EST

By Amy Sawitta Lefevre

BANGKOK (Reuters) – Thailand’s Election Commission said on Tuesday it would try to complete this month’s disrupted poll in late April, leaving the country facing another two-and-a-half months in political limbo under a caretaker government with limited powers.

Protesters have been trying since November to oust Prime Minister Yingluck Shinawatra, whom they see as a stand-in for her brother, Thaksin Shinawatra, the self-exiled former premier who clashed with the establishment and was ousted in a 2006 coup.

Yingluck called a general election on February 2 to try to end the demonstrations, but protesters succeeded in disrupting the vote in about a fifth of constituencies, meaning there is not yet a quorum to open parliament and install a new government.

“Voting for constituencies where elections could not take place on February 2 will take place on April 27,” Election Commissioner Somchai Srisutthiyakorn told reporters.

The protesters, who are mainly drawn from Bangkok and the south and are backed by the royalist establishment, say former telecoms tycoon Thaksin has commandeered a fragile democracy with populist policies to woo poor voters in rural areas, ensuring victory for his parties in every election since 2001.

The protest group, the People’s Democratic Reform Committee (PDRC), wants Yingluck to step aside, with political and electoral reforms drawn up by a “people’s council”, which they hope would rid Thailand of Thaksin’s influence for good.

Members of the group prevented voting in much of the south and in parts of Bangkok, strongholds of the opposition Democratic Party, which boycotted the vote and threw in its lot with the protesters.


Much of normal government business has been paralyzed since the protesters took over parts of Bangkok in November, and the drift has been compounded since Yingluck dissolved parliament in December and became head of a caretaker administration.

The authority of a caretaker government to initiate new spending and political programs is limited, and there is confusion in Bangkok about the constitutional powers of different branches of government.

Highlighting the uncertainty, Election Commissioner Somchai had told Reuters earlier that there were doubts over the legality of restaging voting and the whole election might have to be voided and re-run.

The drift and deadlock has also started to affect spending plans, raising concerns that it could drag on the economy.

The World Bank highlighted worries about delays to much-needed infrastructure policies, although it still sees the economy growing 4 percent this year – a more optimistic reading than Thailand’s central bank, which has slashed its growth forecast to 3 percent and warned it could be worse if the protests drag on.

Yingluck’s Puea Thai Party is strong in the populous, rural regions of the north and northeast and helped win votes there in the 2011 general election with a subsidy program that offered farmers a price way above the market for rice.

However, that program has run into funding problems and hundreds of thousands of farmers have been waiting months for payment from the state. Some are now protesting in Bangkok, although separately from the political demonstrations.

In recent weeks, big banks have refused to extend bridging loans to help fund the program, unconvinced the government has the authority to seek them, while China has cancelled a government-to-government rice deal due to a corruption probe.

Finance Minister Kittirat Na Ranong said the farmers would get paid but appealed for time to arrange bank financing.

“The government believes it could complete the rice loan in a few days’ time,” he told reporters ahead of a cabinet meeting. “We need to reassure financial institutions that the rice loan will not breach the law.”

Under an interim administration the Election Commission is in charge of approving certain government spending from the central budget.


After the cabinet meeting, Commerce Minister Niwatthamrong Bunsongphaisan said the cabinet had approved taking 712 million baht ($22 million) from the state budget to pay some farmers.

“We expect the Election Commission will approve it very soon because it’s a problem for farmers,” he told reporters.

But commissioner Somchai said the election body does not have the authority to approve budgetary changes that may affect an incoming government, adding that banks dared not lend out money to the government.

“Every single bank is afraid because they know if they lend to the government for its rice scheme they would be violating the constitution,” Somchai said. “What worries them even more is that their clients may panic and start withdrawing their savings from the bank.”

Some form of rice-support scheme has existed in Thailand for decades, rolled over into successive crops under governments of all leanings. But that may end this month, adding to the anger of farmers.

“We are just a caretaker government, which has no power to extend any policy. The rice-buying scheme will end automatically on February 28,” Varathep Rattanakorn, a minister in the prime minister’s office, told Reuters.

The rice program was one of the populist policies associated with Thaksin, who has lived abroad since 2008 to avoid a two-year jail term on a graft conviction he said was politically motivated.


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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