Thailand’s coup: In for the long haul; As crackdown follows coup, the generals may stick around for as long as they think it takes to restructure politics and the economy, and manage the royal succession

Thailand’s coup: In for the long haul; As crackdown follows coup, the generals may stick around for as long as they think it takes to restructure politics and the economy, and manage the royal succession

May 31st 2014 | BANGKOK | From the print edition

IT IS official. On May 26th General Prayuth Chan-ocha secured the royal imprimatur for his coup four days earlier. Dressed in a white army uniform, sword at his side, General Prayuth knelt before a portrait of King Bhumibol Adulyadej as he formally took up his royal appointment as head of the National Council for Peace and Order, the junta that now runs the country. That the frail 86-year-old king was not there in person hinted at anxieties over the royal succession that have played their part in recent political ructions as well as in the coup itself.

General Prayuth has since disbanded the Senate, the only remaining semblance of constitutional government. In its tone and actions, the coup is a throwback to a time when patronage and deference were Thailand’s organising forces. A curfew has been imposed. The army has summonsed hundreds. Those detained are released only on condition that they do not speak out. Politicians and intellectuals have fled the country or gone underground. One military decree rules that no one should voice opinions that will further “divide the public”. The army has shut television and radio stations and muzzled the press. It is, says Human Rights Watch in New York, a concerted effort by the military regime “to enforce acquiescence”. It comes on top of Thailand’s draconian lèse-majesté laws that forbid any discussion of the monarchy, including the succession.

In particular, the army has gone after members of the previous government or those thought sympathetic to it. Until February it was led by Yingluck Shinawatra, who won a general election in a landslide in 2011. She is the sister of Thaksin Shinawatra, himself ousted in a coup in 2006 and, from self-imposed exile in Dubai, the power and money behind Ms Yingluck’s Pheu Thai party. Among those rounded up are former cabinet ministers and “red-shirt” activists and organisers, especially in the north and north-east of the country, the Shinawatras’ heartland. Sixteen senior police officers have been removed, along with a dozen provincial governors. Prominent politicians have been well-treated, but more obscure activists have been held in solitary confinement.

Among many ordinary Thais in Bangkok the coup is popular—for now. Residents were fed up with the political bickering that paralysed the capital for months. It began last year with protests against a bill that would have granted Mr Thaksin amnesty for corruption charges that hang over him. When the Senate unanimously voted the bill down, the protesters’ leader, Suthep Thaugsuban, formerly from the establishment Democrat Party, scented blood. He sought to bring the government down by setting up street camps, occupying government offices and shutting down key areas of the capital. He said he wanted an appointed government to draw up political reforms that would forever preclude the “Thaksin regime” from winning office again in elections. About 28 people have been killed in confrontations between Mr Suthep’s lot, the People’s Democratic Reform Committee (PDRC) and the pro-government red shirts.

In the days before the coup, Mr Suthep’s programme appeared to be flailing. Although the courts had first ruled as invalid an election in February called by Ms Yingluck and then ordered her to step down for supposedly abusing her power, the Pheu Thai caretaker government that survived her refused to resign. The political impasse continued. But then General Prayuth declared martial law on May 20th. He locked all the political protagonists inside the Army Club to knock heads together.

In effect, he offered Pheu Thai a deal that the leader of the Democrat Party, Abhisit Vejjajiva, had recently peddled: have a popular referendum on political reforms and then hold elections. One account of what took place suggests that the general asked a Pheu Thai leader whether the government would resign to make this happen. The leader, after Mr Thaksin had been consulted by phone, replied: “As of this minute, no.” At which, General Prayuth replied: “As of this minute, I’m taking over.”

The move represents a massive failure of the political classes. It is a disaster not just for the Thaksinites but also for the Democrats, even if they are not languishing in jail. In opposition, Mr Abhisit surrendered the initiative to Mr Suthep’s mob politics. One politician reflects: “How did we allow this outcome to take place?…We really blew it. It’s a…failure of politicians that so many people can come to terms with a coup.”

Only Mr Suthep and the PDRC are smiling. He is the street-level embodiment of the establishment and the court surrounding King Bhumibol. He sees the Shinawatras not only as corrupt but also as an existential threat to the nation. His campaign has drawn much of its urgency from the knowledge that the king’s reign is drawing to a close. There is much speculation that Mr Thaksin is close to the king’s 61-year-old son and heir, Prince Maha Vajiralongkorn. A martinet, he is immensely unpopular among Thais. The crown prince and his entourage sat out the coup at an English country hotel—not the first time he has taken his pleasures elsewhere as a political crisis unfolded at home.

The idea of Mr Thaksin being cosy with the crown prince horrifies Mr Suthep and probably the generals. As one analyst puts it, “they wanted to be in power to manage the succession.” It seems unlikely that the generals would actively seek another royal to succeed the king when the time comes. But, crucially, they will be in charge of the process, not Mr Thaksin. And so the junta is finishing off what the PDRC started.

What next? The coup may bring stability in the short term. And though the generals remain in charge, they have shown the nous to recruit former politicians with reformist experience—some from Mr Thaksin’s early governments. Yet Chaturon Chaisaeng, a minister under Ms Yingluck, suggests that the army will use support for reforms as a pretext to “redesign the system so that the parties they don’t like cannot run the government.”

After the last coup in 2006, the generals stayed for a year. But a growing concern is that they may dig in for longer this time. The soldiers made a mess of ruling last time, yet their own assessment is that they did not stay long enough to sort out everything that is wrong with Thailand—not just the pesky politics, but the economy, infrastructure and the tax system as well. General Prayuth, says one person who knows him well, is a reluctant coup-leader, but “he’s the kind of character who will want to finish the job.”

And that is where things can go wrong. If, for instance, the generals launch ambitious infrastructure and other plans, corruption could flourish and dissatisfaction rise. As a top politician says, the longer the junta stays in power, “the greater the chance—and it’s exponential—of this ending badly.” Mr Chaturon was making the same point, calling before assembled journalists for democracy and the rule of law and predicting that army rule would entail “more conflict, more violence”, when the soldiers burst in and arrested him. Despite the mess that prevailed before, this is no way to run a modern country.

 

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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