Weary Thailand Inc awaits a functional government
[BANGKOK] When Pita Limjaroenrat failed last week to secure majority support in Thailand’s parliament to become the country’s next Prime Minister, it was not only a setback for the progressive and liberal agenda of his Move Forward Party (MFP) but it also dashed any hopes of a swift return to political stability.
Pita, the 42-year-old leader of the MFP, will try again at the second vote in Bangkok this Wednesday (Jul 19), but analysts doubt the outcome will be any different.
At the first vote on Jul 13, he won 324 out of 749 votes (500 members of parliament and 249 senators), well below the 375 he needs. Pita had the backing of 311 MPs, but tellingly only 13 senators supported him.
Under the Constitution, the Senate – an unelected body appointed in 2019 by a special committee set up by the Thai military – must also vote on the selection of the prime minister.
Prior to the vote, several members of the Senate had expressed their disapproval of MFP’s controversial plan to amend Section 112 of the Criminal Code, or Thailand’s onerous lese majeste law that imposes up to 15 years imprisonment and heavy fines on anyone found guilty of defaming, insulting or threatening the king, queen or heir apparent.
Even after losing the first round of voting, Pita vowed to “press on with amending Section 112 as I have promised”, which effectively undermined any remaining hope he had of winning Senatorial approval.
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MFP was the surprise winner of the May 14 general election, receiving some 14 million votes, which gave the party 151 seats in Thailand’s Lower House of Parliament. The next most successful party – Pheu Thai, the defacto party of self-exiled former prime minister Thaksin Shinawatra – won about 11 million votes, giving them 141 seats.
The two leading parties have since formed a coalition of eight parties which has unanimously backed Pita’s bid to be prime minister, while Thailand’s elites have done their best to undermine it.
Besides the Senate opposition, Pita faces at least two court cases against him that could eventually disqualify him as a candidate for the prime minister.
In addition to the plans to amend Section 112, MFP has also vowed to end military conscription, raise minimum wage and undermine business monopolies in Thailand, antagonising the junta and large business groups with the ultra-royalists.
“There is a degree of panic among the elites,” said Chris Baker, historian and co-author of several books on contemporary Thai politics together with his wife, academic Pasuk Phongpaichit. “They are trying to find any method to stop MFP, but that is easy. It is the second part that is difficult – how to deal with MFP without provoking chaos.”
There were waves of student-led protests in Bangkok against the government of Prime Minister Prayut Chan-o-cha after the Future Forward Party – the forerunner of MFP – was disbanded in 2020 after a court ruled that it violated election laws.
The protests, which broke the traditional taboo against criticising the monarchy, were put down with force and many of the party’s leaders were arrested on lese majeste charges.
Similar protests could be expected in the coming weeks if MFP is blocked from power. Should Pita lose another bid to win the premiership, a new candidate for prime minister will need to be found. What’s more, it’s also likely that a new coalition of parties headed by Pheu Thai will need to be formed that could be more suited to the conservative Senate.
All this will take time, and a lengthy transition will probably delay the disbursement of the fiscal year (FY) 2024 budget which starts on Oct 1. There are other important things like the approval of major public infrastructure projects in the pipeline, as well as any major foreign direct investment (FDI) projects seeking approval from the Board of Investment (BOI), all of which require the green light by the prime minister.
“In our baseline scenario, we expect that the budget process for FY 2024 will be delayed by three to four months, so we will be able to start disbursements in February next year,” said Arnunchanog Sakondhavat, a senior economist at the National Economic and Social Development Council, a government planning agency.
The political uncertainty, delayed budgets and power vacuum at the top bode ill for Thailand’s investment climate for the rest of 2023 and next year.
In the first six months of 2023, applications for investment promotion at the BOI rose 70 per cent year-on-year in value to 364 billion baht (S$13.9 billion), but the pace is likely to falter in the second half due to the mounting uncertainties.
Foreign business leaders said they are ready to work with whatever coalition eventually comes to power, under whichever prime minister. All they want is to have a stable government in place so that business can carry on, they said.
“The return to a functioning government is the top priority for foreign business,” said Paul Scales, a board member of the Joint Foreign Chambers of Commerce in Thailand. “Uncertainty erodes confidence and it will hinder investment.”
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