Thai Political Feud Will Be Resolved This Year, Thaksin Says

Thaksin Shinawatra, deposed as Thai premier in a 2006 coup, said his sister’s seven-month-old government will avoid the same fate due to her good ties with the army and expressed hope he’d return from exile this year.

“As long as there is no issue related to the monarchy, as long as there is no issue about internal security, the military will stay in the barracks,” Thaksin, whose sister Yingluck Shinawatra became prime minister in August, said in an interview yesterday in Seoul. “My sister works hard for the people, she respects the monarchy very much and she can work with the military without conflict.”

Yingluck’s push to rewrite the constitution risks sparking violence like in 2008 when a similar effort by Thaksin’s allies led to protests by his yellow-shirted opponents who shut down parts of Bangkok and seized its airports. Yingluck, a political novice before standing in July elections, is seeking to reassure foreign investors after floods last year swamped thousands of factories and caused the economy to shrink for the first time since 2009.

Changing the constitution to make it more democratic has “almost consensus” support among Thailand’s 66 million people, Thaksin said in an interview that spanned calls for diversifying some of the nation’s foreign-exchange reserves to advocating lower interest rates to spur growth.

“History will not repeat itself,” Thaksin said, referring to street battles that have claimed more than 100 lives since his ouster. Thailand “will move toward reconciliation” as early as this year, he said.

Detente

The proposal to create a 99-member Constitution Drafting Assembly passed 399 to 199 on Feb. 24, the first of three required votes in the National Assembly. The People’s Alliance for Democracy, which led anti-Thaksin protests in 2006 and 2008, plans to meet on March 10 to decide whether to return to the streets in a bid to block its passage.

Events in recent weeks point to a detente between Thaksin and his opponents, including the presence of top royal adviser Prem Tinsulanonda, who Thaksin earlier accused of backing the coup, at a dinner hosted by Yingluck, according to Michael Montesano, a visiting research fellow at the Institute of Southeast Asian Studies in Singapore. Court decisions upholding government spending plans and convicting anti-Thaksin protest leader Sondhi Limthongkul of fraud are further evidence, he said.

“There’s been a string of indications that the groups we expected to see undermining this government are not doing so,” Montesano said. “For once, Thaksin’s sweeping statements are perhaps not all bluster.”

Poor Voters

Thaksin, 62, became a billionaire after winning a mobile- phone concession in 1990 for what became Thailand’s biggest operator. He soon entered politics and appealed to voters in the poorer northeast region with cheap health care and small loans, a platform that underpinned his tenure as prime minister from 2001 until his ouster.

Thaksin has lived overseas since fleeing a two-year jail sentence in 2008 for helping his wife buy land from the government. A court seized 46.4 billion baht ($1.5 billion) of his family’s money in 2010, two weeks before his supporters started protests that shut down Bangkok’s commercial center and ended in a military crackdown and arson attacks.

“I’ve done nothing wrong,” Thaksin said when asked if he’d ever spend a day in jail to foster reconciliation.

Campaign Promises

In July, Yingluck’s Pheu Thai won 265 seats in the 500-seat parliament on pledges to raise the minimum wage, buy rice at above-market rates and give students tablet computers. It was the fifth straight election win since 2001 for allies of Thaksin.

Yingluck “will start delivering campaign promises and the economy will move accordingly,” Thaksin said. “The flood maybe slowed down her performance a little bit, but now I think she performs very well -- better than I expected.”

Thailand’s consumer confidence rose for a third straight month in February, the latest indicator of a recovery after the nation’s worst floods in almost 70 years disrupted supply chains for companies such as Apple Inc. (AAPL) and Toyota Motor Corp. The state planning agency forecasts the economy may expand as much as 6.5 percent this year after the deluge slowed annual growth to 0.1 percent in 2011.

Strong Rebound

“Despite the floods, our economic fundamentals continue to be strong,” Yingluck said today during a visit to Tokyo. She said she expects the economy “to rebound strongly” and that the forecast for growth this year is between 5.5 percent and 6.5 percent.

She said the government was investing in barriers around industrial estates to protect factories from flooding. “This will ensure industrial supply chains and logistics will not be disrupted,” Yingluck said.

Since King Bhumibol Adulyadej confirmed Yingluck as premier on Aug. 8, Thailand’s SET Index (SET) has risen 7 percent, more than benchmarks in Malaysia, Indonesia and Singapore. The baht has declined percent in that time.

Thaksin criticized Thailand’s central bank, saying policy makers were overly concerned about inflation and should keep interest rates low to boost growth. Foreign reserves of $181 billion are “unnecessarily high” and should be invested in large-scale infrastructure projects, he said.

“Sometimes government officials don’t want to take any risks,” he said, adding that he respects the central bank’s autonomy.

Thaksin considers himself an encyclopedia that Yingluck “can open anytime she wants to.” He said he has no ambition to serve again as prime minister and will seek to become her adviser if he returns to Thailand.

“A Thaksin government without Thaksin is absolutely perfect at the moment,” said Chris Baker, a Bangkok-based political analyst and author of a biography on Thaksin. “Yingluck is doing a brilliant job of empathetic, slightly low- key leadership. We are back on the path before the coup. The one thing that can throw this is if Thaksin tries to return.”

To contact the reporters on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net; Rishaad Salamat in London at rishaad@bloomberg.net

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

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