Thailand Coup: Politicians Banned From Leaving

Thailand Coup: Politicians Banned From Leaving

The country’s armed forces summon ousted political leaders as an international outcry grows over the military coup.

9:26am UK, Friday 23 May 2014

Thailand’s army has banned 155 people, including politicians and activists, from leaving the country a day after seizing power in a bloodless coup.

General Prayuth Chan-ocha said the military takeover was necessary for the country to “return to normal quickly” following months of deadly protests.

He immediately imposed a 10pm to 5am curfew, suspended the constitution and ordered all cabinet ministers to report to the military.

Political leaders, including Yingluck Shinawatra who was forced from office as caretaker prime minister earlier this year, were told not to leave Thailand “in order to maintain peace and resolve the conflict”.

Reuters news agency said she was seen arriving at an army facility on Friday morning, as Thailand woke up to its first day under military leadership.

The coup – the country’s 19th since the fall of absolute monarchy in 1932 – followedtwo days of meetings between rival political leaders that failed to break the deadlock.

US Secretary of State John Kerry said there was “no justification” for the military takeover. He said it would have “negative implications” for US relations, and demanded early elections.

The Pentagon said it was reviewing military cooperation with Thailand.

General Prayuth said his forces would “provide protection” for foreigners in Thailand, which is visited by around one million Britons a year.

British ambassador to Thailand Mark Kent said: “British citizens should exercise extreme caution and follow travel advice and media updates.”

Malaysia warned its nationals to defer non-essential travel to Thailand.

Japan, Thailand’s biggest investor, stopped short of a travel warning, but called for a “prompt restoration of a democratic political system”, as Toyota and Honda stopped night shifts at their Thai plants because of the curfew.

Thailand has been locked in political crisis since a 2006 military coup that deposed Ms Yingluck’s elder brother Thaksin Shinawatra, a billionaire tycoon who clashed with the royalist establishment.

His Red Shirt supporters had warned that any military overthrow of the government could trigger civil war and all eyes are now on how his movement will respond.

On Thursday, Thai soldiers reportedly fired into the air to disperse thousands of Red Shirts, who gathered in western Bangkok after the coup was announced.

 

Thailand Military Declares a Coup

Army Detains Ministers and Faction Leaders, Imposes Curfew, Orders Protests to Disband

WARANGKANA CHOMCHUEN And JAMES HOOKWAY

Updated May 22, 2014 8:10 p.m. ET

Army Chief Gen. Prayuth Chan-ocha, center, announces on national TV that after the military was taking control. Agence France-Presse/Getty Images

 

BANGKOK—Thailand’s military forcefully removed the nation’s elected government two days after declaring martial law, posing new risks to a U.S. ally that is rapidly losing appeal to the investors and tourists who have fueled its economic growth.

Army leader Gen. Prayuth Chan-ocha formally seized power Thursday, taking over the duties of prime minister after failing to broker an end to a seven-month feud pitting the government against protesters who sought to replace it with a royally appointed administration.

Why is Thailand in turmoil? WSJ’s Jason Bellini has #TheShortAnswer.

Washington officially declared the takeover a coup, which could prompt the U.S. to curtail cooperation and aid programs.

“While we value our long friendship with the Thai people, this act will have negative implications for the U.S.-Thai relationship, especially for our relationship with the Thai military,” Secretary of State John Kerry said. The Pentagon said it was reviewing military ties with Thailand but no decision had been made.

The coup adds another measure of instability to an already rocky time for Southeast Asia. Vietnam and the Philippines are locked in confrontation with China over their competing territorial ambitions in the South China Sea, while Malaysia is reeling from the disappearance of a jetliner and Indonesia is about to elect its first new president in a decade.

After mediated talks fell apart, the Thai military ordered the acting prime minister, Niwattumrong Boonsongpaisan, and his predecessor, Yingluck Shinawatra

, and other government officials to report to an army base.

Leading political figures were detained, and the military declared a 10 p.m.-5 a.m. curfew that sent commuters scurrying home and darkened the Thai capital’s red-light districts.

Thailand’s army chief announced a coup d’état on live national television, two days after saying “this is not a coup” as he declared martial law. The WSJ’s Ramy Inocencio reports on the announcement, the events leading up to it and the last time the kingdom’s military seized power.

The military asked social media operators to stop sharing messages that could provoke violence or fan opposition to the ruling military council, or risk suspension of service.

The coup marked a new level of dysfunction for what was long one of the world’s fastest-growing economies. Protesters took to the streets in November with the mission of ousting a government loyal to the family of tycoon Thaksin Shinawatra, who was himself toppled as prime minister in 2006 and now lives overseas. In its place, the protesters wanted a royally appointed leader installed to rid the country of the Shinawatra family’s populist policies.

Mr. Thaksin’s sister, Ms. Yingluck, who was elected prime minister in 2011 in a landslide election, was removed earlier this month by a court ruling stemming from improperly removing a senior bureaucrat from his job three years ago.

Political disruptions curbed Thailand’s economic growth rate last year to 2.9%. That was well behind the 7.2% posted by the Philippines, 5.8% in Indonesia and 5.4% in Vietnam.

This year could be worse: In the first quarter, the economy shrank 2.1% compared with the last three months of 2013. Growth in per capita GDP, which rose from $100 in 1961 to $4,800 in the early 2000s, has slowed dramatically. Foreign direct investment has fallen to levels below competitors such as Indonesia.

Traffic problems that gripped Bangkok in the 1980s have recently returned largely because of a lack of investment in roads, a failure in stark evidence Thursday when commuters rushing to get home ahead of the curfew jammed Bangkok’s main arteries after the capital’s train was forced to close early.

The tourism industry, which has had a resilience that earned the country the nickname “Teflon Thailand,” saw the number of visitors shrink by almost 400,000 in the first four months of the year, a decline of about 5% from the same time last year. The number of visitors is expected to fall a further 10% to 12% in May from the previous year, Thailand’s tourism department said. The industry accounts for around 9% of gross domestic product— some $35 billion last year—the second-highest percentage in Asia after Hong Kong.

“When you have political instability that’s affecting your tourism numbers, that’s going to reduce your national income and that will spill over to weakening consumption,” CLSA economist Tony Nafte said. “The impact from tourism is one of the key contributors to the economy’s overall decline.”

Companies that once insisted they were committed to Thailand, despite its periodic disruptions, are increasingly saying they are losing faith.

Auto makers including Toyota MotorCorp. 7203.TO +1.01% and Honda Motor Co. 7267.TO +1.07% say they are delaying or rethinking plans for new investments in the country as national car sales plummet, though much of their production is geared toward the export market.

The auto and auto parts industries already laid off about 10,000 people this month, a trade group said. Some analysts expect 30,000 auto workers to lose their jobs this year if the political upheaval persists. In April, auto production fell more than a quarter from a year earlier to 126,730 cars, while sales declined more than a third to 73,242 cars.

“Thailand has to get its act together,” Anthony Chay, president of Thai operations at Siemens, SIE.XE +0.80%a potential bidder for a high-speed rail project stalled by political wrangling, said before the coup unfolded. Many of the firm’s 1,200 workers are working on other projects such as servicing Bangkok’s mass transit system.

In a televised address, Gen. Prayuth and other army leaders billed the coup as a chance to reset politics and enact reforms they say are needed to ensure respect for democracy. But they offered no road map for resolving the standoff between the largely urban middle class and elite protesters and Mr. Thaksin’s populist backers, many of whom hail from the rural heartland.

Gen. Prayuth is in a difficult spot. He will have a short timeline from supporters of the ousted government to call new elections or risk a potentially violent backlash. But the other protesters, who urged him for months to stage a coup, will want him or an interim prime minister to ensure that any future electoral arrangements produce a power structure more favorable to them.

Thursday’s was the 19th coup attempt since Thailand ended absolute monarchy in 1932. But takeovers had become rare in the last two decades, until the coup that toppled Mr. Thaksin, who built the strongest political machine the country has known and is considered brash by many Thais.

Many Bangkok residents were calm after the takeover.

“Since the conflict between the two groups remains unresolved, having someone to step in and put an end to it is good,” said Tueanjit Putipongpokai, 29 years old, who said she was hoping to take some photos with soldiers. “I don’t think the situation can be any worse than it has already been although I didn’t expect the coup to take place this soon.”

The constitution was suspended except for articles concerning the monarchy.

While the stock market was closed when the military confirmed its coup, the baht moved lower against the U.S. dollar and changed hands late Thursday at 32.54 per dollar compared with 32.47 a day earlier.

Thailand’s financial markets have remained resilient, but investors are not taking the country’s ability to bounce back from crisis for granted. The benchmark stock index is 8% higher year-to-date, one of Asia’s top performers. Investors say Thailand’s long-term economic prospects are solid. The stock market shed nearly 3% in the two weeks after a coup in 2006, only to rebound more than 5% in the following month.

“The initial reaction is probably going to be negative,” said Julian Mayo, co-chief investment officer at Charlemagne Capital UK Ltd., an emerging markets investor that manages around $2.6 billion globally. “We are following it closely,” he said, but added that coups in Thailand are not uncommon. “You need to be a skeptic to invest in emerging markets,” he said.

 

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 (www.heroinnovator.com), 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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