April 15 (Bloomberg) -- Whether Thai Prime Minister Abhisit Vejjajiva stays or goes, the result is likely to be the same: more street protests and more political turmoil in his country.

Abhisit, 44, is struggling to save his four-month-old administration in the face of demonstrators who shut down a regional summit and paralyzed the capital before ending their protests yesterday. He gained power on the strength of a rival group that shut down Bangkok’s airport for eight days last year -- and vows to march again unless its people stay in power.

Two sets of protesters, one wearing red and the other yellow, demarcate a polarization in Thai society that shows no sign of abating. The mutual enmity, rooted in a debate over how much democracy Thailand should have, threatens to trigger further violence in a nation that promotes itself as the Land of Smiles.

“It gets harder and harder to see any way out or reasonable way forward for Thailand,” said Duncan McCargo, a professor of Southeast Asian politics at the University of Leeds. “Both sides have lost sight of reason in their absolute determination to thwart the other.”

The prospect of prolonged unrest threatens to deter foreign investment just as the Thai economy confronts its first annual contraction in 11 years. The government will have to cut its forecast for gross domestic product to shrink 3 percent this year because of the latest conflict, Finance Minister Korn Chatikavanij said yesterday.

Thaksin Shinawatra

The red-shirted protesters who besieged Abhisit’s office for more than two weeks and shut down the summit are led by former Prime Minister Thaksin Shinawatra. They say non-elected actors like judges, bureaucrats and King Bhumibol Adulyadej’s advisers have too much power over elected officials. Parties linked to Thaksin, ousted in a 2006 coup, won the past four national elections. Two of those parties were disbanded under a military-drafted constitution.

Thailand Foreign Ministry revoked Thaksin’s passport on April 12, government spokesman Panitan Wattanayagorn said by telephone today.

“The ministry can recall the passport of an overseas Thai who causes damage to Thailand,” Panitan said. “Unless Thaksin has other passports from other countries, he cannot travel. We have been tracking his traveling from this region to the Middle East, back and forth, in general.”

Arrest Warrants

Thai police yesterday issued arrest warrants for Thaksin and other protest leaders after clashes in Bangkok left two people dead and at least 123 injured.

“As long as the constitution is not democratic, the crisis will continue,” said Chaturon Chaisang, a former Cabinet minister and one of about 140 pro-Thaksin politicians banned by courts in the past two years. “People at the lower levels of Thai society understand democracy far more than before, and they are angry that their voices aren’t being respected.”

The yellow-clad demonstrators who seized the airports say Thaksin, who fled Thailand last year to avoid a corruption case in which he was sentenced to two years in jail, used his billions to buy votes and subvert democratic institutions during his five years in power. They say Thaksin is orchestrating the chaos to clear his name and return to power.

“Thaksin didn’t have a problem with the constitution when his party formed a government last year, but now he says it’s not fair,” said Parnthep Pourpongpan, a spokesman for the yellow-shirted People’s Alliance for Democracy. “He’s just doing this for himself to avoid his jail sentence and come back and take control of the country.”

The Monarch

The yellow shirts also accused Thaksin and the reds of trying to upend Thailand’s monarchy. Insulting the royal family can land offenders in prison for as many as 15 years.

In the past, King Bhumibol, who took the mantle in 1946 and is now the world’s longest reigning monarch, had been looked upon to unify the country in times of crisis. In 1992, after troops fired on pro-democracy demonstrators, millions watched on television as rival leaders prostrated themselves before the king.

There now doesn’t seem to be anyone who can transcend the polarization and negotiate a compromise, a prospect that may lead to a “war of attrition,” said Kevin Hewison, a professor in the Department of Asian Studies at the University of North Carolina.

Considering the Future

“The standoff looks starker by the day,” he said. “People of the countryside and working class want representation so they feel their vote counts. The people who everyone calls the conservative elite, royalists or bureaucratic polity are just somehow fundamentally opposed to that as something that can happen now.”

Abhisit said April 12 he would consider his political future once stability had returned. When the airports were seized last year, he said at the time that “fresh elections would be one way out, if not the only way out, and we will do whatever people give us a mandate to do.”

Abhisit’s party boycotted a 2006 election won by Thaksin’s party that was voided by the courts two weeks after King Bhumibol called on judges to resolve a pending constitutional crisis. Abhisit’s party took 165 of 480 seats in the last election, which the Thaksin-backed People Power Party won with 233 seats.

Electoral Process

“What needs to happen is for there to be an electoral process that is wide open and not meddled in,” said Michael Montesano, a visiting research fellow at the Institute of Southeast Asian Studies in Singapore. “And people have to live with the results.”

Since the 2007 election, protesters have been on the streets for 213 days, courts have removed two pro-Thaksin prime ministers, the airports were seized, rival gangs have taken over streets and four emergency decrees were issued. In many ways, it’s an extension of decades of turmoil.

Thailand has experienced 10 successful coups since absolute monarchy was abolished in 1932. Only two of Thailand’s constitutions since then have mandated fully elected parliaments.

If the prime minister is looking for a metaphor for his beleaguered country, he might find one on the cover of one of his books, which chronicles the failings of his favorite soccer team. It’s entitled, “Newcastle United: Fifty Years of Hurt.”

To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

Last Updated: April 15, 2009 04:55 EDT