Thai Politics: Could ¡t Be More Stable Than ¡t

Appears?
Andrew Btotz, CFA
15.3.2010
Prime Minister Ablisit Veiiaiiva las remained calm tlrougl Tlailand´s recent political crisis
and as a result it is possible tlat tle Democrat party can remain in power until tle end of
Parliament´s four year term in Dec 2011. As I see it tle Democrat party slould lave no desire
to dissolve tle Parliament early as it is almost assured to lose votes in tle next election. Despite
tlis, it is possible tlat tle party could still lead tle next government if tley can furtler fracture
Tlaksin Blinawatra´s power. A final blow to Tlaksin´s power may seem impossible now, but it
could come in tle form of an early lifting of tle five year ban of tle former Tlai Rak Tlai
executives (excluding Tlaksin Blinawatra) alead of tle next election. A potential deal would be
tlat tle members would need to splinter and form new parties wlicl would be tle final act in
tle dismantling of Tlakins´ power. Witl tle Democrat party potentially in power for its wlole
term Tlai politics may continue to be more stable tlan it appears.
How we got here.
On 2 December 2008 tle Tlai Constitutional Court banned tle People´s Power party, tle
second incarnation of Tlaksin Blinawatra´s original Tlai Rak Tlai party (wlicl itself was
dissolved on 30 May 2007, witl its top 111 party executives banned for five years, ending in
May 2012). MPs wlo were not banned moved to tle tlird incarnation party, tle current Puea
Tlai party, wlicl maintained 39% of tle seats in tle House of Parliament. Despite laving tle
largest block of seats, tle party was outmaneuvered by tle Democrat party, wlicl leld 37% of
tle MPs and formed tle current government.
¡ew believed that the Democrat party could remain in power for long.
In tle early montls of last year, I was making tle argument tlat tle government was more
stable tlan people tlink, a minority position tlat fell on deaf ears. Tlen in April 2009, tle
Ablisit government was able to maintain its position in tle face of very aggressive moves by
tle Red Blirts supporting Tlaksin. Tlis demonstrated tlat tle Democrats could landle street-
led offensives and also tlat le lad tle cooperation of tle Tlai military. Ever since, I lave
advocated tlat tle Democrat party could maintain its power and tlat in tle next election tlere
was a ligl probability tlat tle Democrat party could remain in power.
Thaksin´s power is waning.
From my prior surveys of Tlais as well as general discussions witl nearly everyone I speak to,
it appears tlat Tlaksin Blinawatra´s power is waning. In tle last election (Dec 2007) Tlaksin´s
party won 49% of tle seats in tle louse, tle prior slowing in 2005 was 75%. If tle Democrat
party can last until tle next general election in Dec 2011, it will lave been five years since tle
coup wlicl ousted Tlaksin. During tlat time all means available lave been used to discredit
Tlaksin, culminating in tle recent Bupreme Court guilty verdict. Most Tlais lave more respect
for tle courts tlan tley do for politicians, bureaucrats, or tle military, lence, tle Bupreme
Court´s nearly unanimous verdict carries significant weiglt in tle court of public opinion.
Tlese efforts combined witl a population exlausted by tle five year political soap opera are
driving down Tlaksin´s support.
The Democrat party can hold on to power until the next election.
It is now looking more likely tlat tle Democrat party can lold on to its position until required
to call tle next election at tle end of Parliament´s four year term (Dec 2011). Tle main reason
is tlat, due to tle damage done to lis reputation and wealtl, it is unlikely tlat Tlaksin can
amass enougl supporters to topple tlis government. In addition, tle military las slown tlat it
is willing to cooperate witl tle Democrat party government. Of course, tlis assumes tlat tle
Democrat party does not self-destruct or make any maior mistakes. Tle likelilood of tlings
falling apart is low as tle current Prime Minister, Ablisit Veiiaiiva, las done a very good iob at
maintaining an even keel and not over-reacting to lis political opponents´ calls for blood.
The Democrat party does not want to dissolve the house.
Tle Democrat party is facing tlree real tlreats to its position wlicl make it likely tlat it will
lose votes in tle next election:
First, former yellow slirt protestors lave formed tle New Politics party and are
getting ready to contest tle next election. My prior surveys lave slown tlat tlis
political group could garner about 5-7% of tle seats in tle House, witl nearly all tlose
votes coming from tle Democrat party.
Becond, tle Democrat party won 83% of tle vote in Bangkok in 2007, given tle
fickleness of Bangkok voters (tley voted 85% in favor of Tlaksin´s Tlai Rak Tlai party
in 2005). Tle Democrat´s dominant position is likely to weaken, iust as Tlaksin´s did.
Tlird, tle smaller coalition parties are building up tleir war clests and preparing to
come out stronger in tle next election.
The Democrat party could govern after the next election.
Despite possibly losing a portion of its current 35% of seats in tle House in a 2011 election, it
is possible tlat tle Democrats could form tle next government. Tlis is first because tle New
Politics party will not get enougl votes to form tle government, and being an arclenemy of
Tlaksin, is almost assured to lave to side witl tle Democrat party. In addition, tle current
smaller coalition parties are likely to see tlat sticking witl tle Democrat party is tle most
reliable patl to power and tlat switcling sides to tle Tlaksin camp would not give tlem a
better position in tle government.
The wild card: Amnesty.
Until tle Dec 2011 election, it is likely tlat tle Democrat party will face periodic but
manageable pressure from Tlaksin´s Red Blirt protestors. Tlis could prompt tle Democrat
party to come up witl a compromise in tle future (similar to tleir original compromise on
clanges to tle Constitution). Also, wlat is best for Tlailand is tlat tle 2011 election be seen as
fair as possible. Reacting to tlis pressure could cause some surprises before tle next election.
One of tle most interesting tlings to watcl is tle 111 banned Tlai Rak Tlai party executives.
Tle ban for tlese members is currently set to be lifted in May 2012, iust five montls after tle
Dec 2011 election. Tlougl it may seem unlikely today it is possible tlat tlere could be a
movement to lift tle ban early for tlese politicians (excluding tle ban on Tlaksin Blinawatra,
given lis recent convictions as well as tle Democrats´ animosity towards and genuine fear of
lim).
Why does lifting the ban early make sense?
Tle reason tlat it could make sense to lift tle ban early on tlese politicians is tlat it may start
to appear ¨undemocratic¨ if tley were excluded from elections for tle next four years after
tleir ban-a total of nine years out of tle game. Tle most important reason to lift tle ban would
be to allow tle more clarismatic and successful party members to form tleir own separate
parties, driving tle final wedge in tle splintering of Tlaksin Blinwatra´s power base. Examples
of clarismatic leaders wlo could lead one or more future parties are: Dr. Kantatli
Buplamongklon, Dr. Bomkid jatusripitak and Claturon Claisang. Of course, tle backroom
deal would be tlat tle ban would be lifted as long as tle former Tlai Rak Tlai members form
at least two new parties (mandating tle splitting of Tlaksin´s power).
So Thai politics might just be more stable than people think.
Bo tlose focused on tle instability of Tlai politics miglt continued to be disappointed as we
watcl tle Democrat party remain in power and potentially lead tle next government. If tle
Democrat party could iust lold on until tle next election tley will lave proven tlat politics are
indeed more stable tlan people lad tlouglt.
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Rcpcrt. Hc is currcntly vicc prcsiJcnt cf thc (FA Sccicty cf ThoilonJ onJ finoncc Jircctcr onJ
cc-cwncr cf (cffccWcrks (c. LtJ., ThoilonJ´s lcoJinc spcciolty ccffcc rcostcr sincc 1ºº5.
None of thls ls a sollcltatlon to buy or sell any securltles whatsoever. The author or hls assoclates could have posltlons ln any securlty at any tlme wlthout notlce. The author's oplnlons
can change wlthout notlce. All materlal ln thls document could be sub|ect to factual errors desplte best eforts towards accuracy.

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