Thailand’s Bhumjaithai party leader Anutin Charnvirakul said on Monday (Aug 7) that he has accepted Pheu Thai party’s invitation to form a government.

The populist Pheu Thai party won the second-largest share of votes at the May 14 general election and is trying to form a government after winner Move Forward’s attempts to do so failed in parliament last month.

Bhumjaithai, known for championing the decriminalisation of cannabis, said it would ally with Pheu Thai on three conditions including that the new alliance leaves untouched the country’s strict laws on insulting the monarchy.

Anutin also said his party would remain in the Pheu Thai-led alliance as long as Move Forward were not included, and they did not form a minority government.

Move Forward had campaigned on reforming the controversial lese majeste laws, which many say are used to suppress opposition to the current royalist, military-backed government.

“Pheu Thai and Bhumjaithai party will form the government with the support of other parties,” said Pheu Thai leader Cholnan Srikaew.

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

The new coalition will include more parties, which will be unveiled over the coming days, Cholnan added. The bloc will command a majority of the lawmakers in the 500-member House of Representatives, he said. 

Pheu Thai’s coalition is taking shape after the party broke away from a previous pro-democracy bloc led by Move Forward that won the most seats in the election. Pita Limjaroenrat, Move Forward’s leader, was twice blocked from taking the prime minister’s job by pro-establishment parties and senators, who opposed his party’s pledge to amend the law barring criticism of the royal family. 

Anutin said the alliance of parties from two opposite camps may help heal the polarisation that has plagued modern Thai politics. “Now it’s time that the country gets a new government and move on. We need to end all those disputes and despair,” Anutin said. 

Thailand’s benchmark stock index rallied as much as 0.6 per cent on speculation a new coalition may help end the political gridlock and ended 0.1 per cent higher. The baht initially pared its losses before sliding again to trade 0.4 per cent lower by 5 pm local time. 

Still, any rally in Thai equities will be “limited” as the alliance is not yet assured of enough votes in parliament to get its prime ministerial candidate elected, said Poramet Tongbua, an analyst at Bualuang Securities. Investors will “cautiously monitor” the political developments before making aggressive investments, he said.

Pheu Thai and Bhumjaithai, which placed second and third in the election, together command 212 seats in the Lower House, still well short of a majority and a threshold to seal the prime minister’s post. Pheu Thai has said it will nominate property tycoon Srettha Thavisin for the top job.

It is not yet clear how Pheu Thai will muster the remaining lawmaker support to form a government. Any winning coalition will need the backing of the majority of the 750 lawmakers in a joint sitting of the Lower House and the military-appointed Senate. 

“A coalition with Bhumjaithai doesn’t create any obstacles in winning the backing of the Senate and other parties, unlike one with Move Forward Party,” Cholnan said. “Our chance of a successful government formation with Bhumjaithai is high.”

A new date for the parliament to pick the next prime minister has not yet been set. A vote set for last Friday was cancelled, pending clarity from the Constitutional Court, which last week deferred making a decision about Pita’s renomination petition.

With the political stalemate continuing, former prime minister Thaksin Shinawatra also delayed his plan to return to Thailand this week, signalling Pheu Thai is still some way from reaching a deal to form a government. REUTERS, Bloomberg