Thai Lawmakers Key to Next Move After Army Acts: Southeast Asia

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Royal Thai Army soldiers keep watch from a military vehicle near the Central World shopping mall in central Bangkok. Close

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Photographer: Dario Pignatelli/Bloomberg

Royal Thai Army soldiers keep watch from a military vehicle near the Central World shopping mall in central Bangkok.

The general behind yesterday’s declaration of martial law in Thailand says he hasn’t launched a coup. Whether he’s proved right will depend on the nation’s judges and appointed senators.

Army Chief Prayuth Chan-Ocha sent troops into Bangkok in the middle of the night, shutting down some media outlets and making the military the final arbiter over all aspects of what it deems issues of national security. In a country that has weathered 11 coups since 1932, he didn’t suspend the constitution, dissolve the Cabinet, impose a curfew or arrest members of the pro-government Red Shirt movement.

“The cautious acceptance of martial law from Red Shirt leaders, caretaker-government ministers and the acting Senate president suggests it’s viewed as a circuit-breaker, a better option than what was widely seen as escalating violence,” said Michael Connors, an associate professor at the Malaysia campus of the University of Nottingham. “However, each side has warned the military not to go beyond the security mandate of the law, and each will still push for stated political objectives but under tighter control.”

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The declaration of martial law was intended to ease violence that has killed 28 since November. Whether that peace is lasting or a pause before possible civil war will depend on actions of the military, courts and senators in coming days. Should the army back plans to install an appointed government, Thailand will face tough questions from the international community and risk an escalation of the unrest that has marred Southeast Asia’s second-largest economy for most of the past decade.

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Thai Army Chief Prayuth Chan-Ocha, center, arrives for a meeting at the Army Club in Bangkok on May 20, 2014. Close

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Photographer: Pornchai Kittiwongsakul/AFP/Getty Images

Thai Army Chief Prayuth Chan-Ocha, center, arrives for a meeting at the Army Club in Bangkok on May 20, 2014.

‘Very Precarious’

“What we are seeing in the first day of martial law has not been promising,” Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Chulalongkorn University, said in an interview with Bloomberg Television. “I was thinking that maybe they had a plan that the military would come in and try to find a resolution to this crisis, find a way forward, go toward elections, but we are not seeing that. So I think that things could turn very precarious and downward very quickly.”

Thailand’s benchmark SET Index (SET) rose 0.3 percent to 1,398.11 as of 11:17 a.m. in Bangkok, after falling 1.1 percent yesterday following the martial law announcement. The baht was little changed at 32.530 per dollar.

Thailand's Troubled Democracy

The army’s intervention comes as a group of senators pushes forward with a plan to install an interim government as early as this week, a key demand of royalist anti-government protesters who have been calling for the nation’s political rules to be rewritten to remove the influence of former Prime Minister Thaksin Shinawatra. He maintains influence over the government despite being ousted in a 2006 coup after being accused of corruption and disrespect for the monarchy.

Democratic Solution

The nation is currently governed by a caretaker administration in place since December when fresh elections were called by then-Prime Minister Yingluck Shinawatra, Thaksin’s sister. She was ousted earlier this month by a court on an abuse of power charge. The government says letting voters decide is the only democratic solution to the impasse.

“While it remains impossible to say if the Reds will turn to widespread violence, the prospect of increasing attacks and retaliatory attacks is very real,” said Michael Montesano, a visiting research fellow at the Institute of Southeast Asian Studies in Singapore.

The country’s Election Commission will meet today to consider a proposal from caretaker Prime Minister Niwattumrong Boonsongpaisan for an Aug. 3 vote, Commissioner Somchai Srisuttiyakorn told reporters yesterday. The commission suspended plans for a ballot in July because of the unrest and the results of a February vote were invalidated by the Constitutional Court.

Populist Policies

While elections repeatedly yield victories for Thaksin-linked parties -- they have won the past five -- his royalist opponents deride the legitimacy of the resulting governments, saying they have bought the support of poor rural voters with economically damaging populist policies.

The Red Shirts accuse the military, the courts and watchdog agencies of bias, pointing to the 2006 coup as well as the removal of three Thaksin-linked prime ministers since then in court decisions. They say the traditional elite in Bangkok don’t respect the votes of long-ignored farmers in the nation’s rural heartlands.

Any move to appoint a new government risks a repeat of violence seen in 2010, when a military crackdown on Thaksin supporters calling for fresh elections when a Thaksin-allied party was in opposition killed more than 90 people. The Red Shirts are currently rallying on Bangkok’s outskirts.

Slow Coup

“If they overthrow the constitution, we will fight to the end,” Red Shirt leader Jatuporn Prompan said yesterday after Prayuth’s announcement. “If the situation eases, we are ready to stop, but only if it’s under democracy.”

Thaksin’s lawyer, Robert Amsterdam, called the imposition of martial law the “continuation of a slow-motion coup.”

“The ultimate end will be a referral to the Senate for an interim government,” he said yesterday by phone.

The leader of the anti-government protesters Suthep Thaugsuban, who oversaw the 2010 crackdown when he was a deputy prime minister, said his group’s rallies would continue.

“Despite the imposition of martial law, the constitution still exists,” he told supporters yesterday. “So we still have rights and freedom under the constitution to fight and hold demonstrations against this dictatorial government.”

Prayuth and other top generals appear to be trying to avoid a full intervention after the military’s last foray into politics failed in 2006, when a junta led by the chiefs of the army, navy, air force, police and the supreme commander tore up the constitution and took over the country.

‘Did Damage’

“The military did damage to itself by seizing state power by means of a coup in 2006, installing a government that underperformed, and seeing to the drafting of a constitution that failed to prevent Thaksinite forces from returning to power in the very next elections,” Montesano said. “It seems to be determined to avoid further such damage.”​

Prayuth now has the ability to push forward the plans of acting leader Niwattumrong, who says any reforms without an election are unacceptable, or those of the group of senators seen as sympathetic to the anti-government cause, which is the more likely scenario, said Paul Chambers, director of research at the Institute of Southeast Asian Affairs at Chiang Mai University.

‘Maintain Security’

“They’re not going to package it as a coup,” said Chambers, editor of the book “Knights of the Realm: Thailand’s Military and Police, Then and Now.” “The martial law act will be repackaged as simply trying to maintain security because six months of chaos has destroyed Thailand.”

The senators, representing half of the upper house, have said they’ll seek the cooperation of parties and the government to find a solution “with full participation of the Thai people.” The Senate is the only legislative body still functioning after the lower house was dissolved in December for an election that was declared void by a court.

The key will be whether the palace gives legitimacy to any appointed government, as it did the 2006 coup makers, Chambers said.

“Once the king endorses that new interim prime minister, it’s curtains for the current prime minister,” he said. “No one is going to fight what the king endorses.”

Echoing the divergence in potential political scenarios, analysts are split on the outlook for Thailand’s currency. JPMorgan Chase & Co. recommends investors stay “tactically overweight” on the baht because the army’s move will shorten the duration of the crisis. Morgan Stanley said the currency may plunge to 37 per dollar by the end of the year.

Next Monarch

“Whether or not the military comes out or whether we have or don’t have martial law, our economy is falling into the abyss,” Senator Kamnoon Sidhisamarn told reporters yesterday.

Beyond politics, the ongoing crisis is partly fueled by a struggle for influence over the next monarch, with some royalists worried that Thaksin has tried to gain favor with the crown prince, Chambers said. King Bhumibol Adulyadej, the world’s longest reigning monarch, is now 86 and ailing.

“A lot of established figures are worried that they’re going to lose their economic influence,” Chambers said. “So they don’t give a damn what the international community thinks or even if the economy takes a downspin because their personal finances will really take a downspin if Thaksin is close to the next monarch.”

To contact the reporters on this story: Chris Blake in Bangkok at cblake28@bloomberg.net; Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Chris Blake, Tony Jordan

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