Abhisit Pledges to Help Families Cope With Food Costs Before Election Test

Thai Prime Minister Abhisit Vejjajiva promised policies to help families cope with rising fuel and food costs that threaten to undermine his party’s gains ahead of this year’s national elections.

Abhisit’s Democrat party leads in every region of the country except for the northeast, he said in an interview with Bloomberg Television in Bangkok today, without citing a specific poll. Abhisit has said he’ll dissolve Parliament in early May to trigger an election about six months before his term ends.

The Democrat party aims “to help put money in people’s pockets so that they can cope with rising prices,” Abhisit said. “Families are struggling despite the economic recovery to keep up with prices, and it’s better to have a government with a fresh mandate to really tackle them.”

Abhisit, 46, took power in a 2008 parliamentary vote after a court disbanded the ruling party linked to fugitive ex-Premier Thaksin Shinawatra, triggering protests from his supporters that have claimed about 100 lives. The Democrats have narrowed the gap on their main rivals in by-elections since the 2007 nationwide vote while overseeing Thailand’s fastest economic growth in 15 years.

The prime minister is “dreaming” if he thinks the Democrats will win the most seats, said Pichai Naripthaphan, a former deputy finance minister and a member of the pro-Thaksin Puea Thai party. Internal polls show his party winning as many as 300 of 500 parliamentary seats up for grabs, Pichai said.

Photographer: Brent Lewin/Bloomberg

Abhisit Vejjajiva, Thailand's prime minister, speaks during Thailand Focus 2011 in Bangkok. Close

Abhisit Vejjajiva, Thailand's prime minister, speaks during Thailand Focus 2011 in Bangkok.

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Photographer: Brent Lewin/Bloomberg

Abhisit Vejjajiva, Thailand's prime minister, speaks during Thailand Focus 2011 in Bangkok.

‘People’s Will’

“Things are going in our favor,” he said by phone. “Nobody can go against the people’s will.”

The Puea Thai party has not yet declared a candidate for prime minister and so far there are few polls on the election. Abhisit’s performance rating dropped in February, according to a survey by Suan Dusit Rajabhat University in Bangkok, which asks respondents to rate subjects on a scale of between one and 10.

Abhisit fell to 5.07 from 5.83 the previous month and his government dropped to 4.87 from 5.53, according to the nationwide poll of 5,584 people taken Feb. 22-26 that did not provide a margin of error.

Government Popularity

Consumer confidence fell for the first time in three months in February after oil and food prices surged. Thailand’s central bank raised its benchmark interest rate on March 9 for the second time in three months and signaled further increases, joining Asian central banks battling to counter the highest oil costs since 2008.

“I don’t think you can take anything for granted with elections in Thailand,” said Supavud Saicheua, managing director of Phatra Securities Pcl, Thailand’s second-biggest brokerage by market value. “Higher oil prices and higher product prices, rising interest rates and several accusations of corruption have affected the popularity of this government.”

The government has sought to cushion the impact with subsidies for fuel and electricity and price controls on consumer products including cooking oil, detergent and fertilizer. Abhisit pledged in February to raise the minimum wage by 25 percent over two years and boost civil service pay if elected, adding to increases set to take effect this year.

‘Tax Reduction’

“In packaging the rise in minimum wage with increasing skills of our workers and also reducing business costs through other policies such as tax reduction, Thailand will remain very competitive,” Abhisit said.

Since Abhisit took power in December 2008 amidst the global financial crisis, Thailand’s SET index has gained 137 percent, the third best performer in Asia after Sri Lanka and Indonesia. Thailand’s economy, the second biggest in Southeast Asia, contracted 2.3 percent in 2009 before rebounding to grow 7.8 percent last year, the fastest pace since 1995.

Thailand, a manufacturing base for automakers including General Motors Co. (GM) and Toyota Motor Corp., saw foreign direct investment in 2010 fall 29 percent to $3.5 billion. Indonesia saw a 28 percent increase to $6.2 billion and Malaysia inflows more than doubled to $3.3 billion, according to statistics from the Association of Southeast Asian Nations.

Rural Voters

Abhisit has offered cash to the elderly, crop price guarantees and help in dealing with loan sharks to win over rural voters and lead his party to win the most seats in an election since 1992. Low cost health care and loans started by Thaksin won him support in poorer northern areas that helped his allies win the past four nationwide votes.

In 2007, Abhisit’s party won 6 of 176 seats in the north and northeast, home to about 40 percent of the country’s 67 million people. Per capita income in those areas is about a third of that in Bangkok, where he won 75 percent of seats.

Abhisit has called on the military, which ousted Thaksin in a 2006 coup, to disperse his supporters who have cordoned off city blocks in Bangkok over the last two years. Protests in the capital’s business district last year led to violence that killed 95 people.

Since the 2007 election, the Democrat party has increased its lawmakers in Parliament to 172 from 165 through by- elections, while pro-Thaksin Puea Thai has seen its tally fall to 187 from 233 because of defections and disqualifications. Thaksin has lived abroad since fleeing a jail sentence for abuse of power in 2008.

“If you look at the recent polls, we are actually ahead in the north,” Abhisit said. “The only region where we are behind is the northeast, where obviously it will take a bit of time before we can really make progress and gains in the area.”

To contact the reporters on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net; Haslinda Amin in Bangkok at hamin1@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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