Thai Prime Minister Yingluck Shinawatra rejected a request from the Election Commission to postpone the Feb. 2 election, saying a delay wouldn’t end three months of protests against her government.
The commission urged the government to defer the poll for three to four months after one person was killed during early voting two days ago and anti-government groups vowed to disrupt the poll this weekend.
“Delaying the election won’t solve any problems,” Deputy Prime Minister Pongthep Thepkanjana told reporters in Bangkok today. “People who are creating the problems didn’t say they would stop if we delay the vote. A long postponement could seriously damage the nation.”
Yingluck has faced daily street protests led by Suthep Thaugsuban, a former opposition politician who is demanding she quit and allow an unelected council to rewrite electoral rules and erase the influence of her brother, Thaksin Shinawatra. Allies of Thaksin have won the past five elections, including two since he was ousted by the military in a 2006 coup.
The SET Index of stocks fell 1.3 percent to 1,271.79 at the close in Bangkok, extending declines after a protester was shot outside the venue for today’s meeting between Yingluck and the Election Commission. The gauge has slumped 12 percent since the unrest began, the most among Asian benchmarks, and the baht has fallen more than 5 percent against the dollar.
“Investors are really concerned,” Viwat Techapoonpol, an investment strategist at Tisco Securities Co. in Bangkok, said by phone. “The vote will further prolong the current political crisis, which will significantly affect economic growth. This political risk has driven most investors to reduce their investments in the Thai stock market before the economic slowdown further hurts company earnings.”
The central bank unexpectedly held its key interest rate last week, even as it cut its growth forecast for 2014. The nation’s economic fundamentals are strong enough to weather “short-term risks,” Governor Prasarn Trairatvorakul said.
The government imposed a state of emergency in Bangkok Jan. 22 after an escalation of violence that has killed 10 people and injured more than 570 since protests began Oct. 31, according to figures compiled by the Bangkok Emergency Medical Center. Suthep has refused offers from Yingluck to negotiate and has vowed to maintain a blockade of major Bangkok intersections that began Jan. 13 until she resigns.
Yingluck’s administration also faces legal challenges, including an investigation by the National Anti-Corruption Commission into losses from a state rice subsidy program, which could lead to her being impeached.
The government has spent $21 billion in the past two crop years starting October 2011 buying rice from farmers at above-market rates. The program accumulated losses of 200 billion baht ($6.1 billion) a year, according to estimates from the World Bank.
The Election Commission argued that candidates in some southern provinces were unable to register for the poll because of a blockade by protesters, which means parliament won’t achieve the quorum needed even if the election goes ahead.
“Parliament can’t be opened for at least three to four months after the election if we are lucky, or longer if we are not,” Commissioner Somchai Srisuthiyakorn told reporters today after the meeting with Yingluck. “The EC will go ahead with the election because the government has a different view.”
The Constitutional Court ruled Jan. 24 that the vote can be delayed and that Yingluck and the commission have the power to set a new date. The government has said there is no precedent for setting a new election date unless a court annuls the results of a poll, and its only option is to proceed.
About two million people who couldn’t access polling stations on Jan. 26 for advance voting in 83 constituencies because of protests will need to vote again after the general election, Somchai said.
“The EC will do the best we can,” Somchai said. “We have warned the government that violence may occur and there may be problems with the election result. The government needs to take responsibility for this.”