May 27 (Bloomberg) -- Thai military leader Prayuth Chan-Ocha threatened to stamp out anti-coup protests and pledged to pay rice farmers $2.8 billion under a state subsidy program to head off a recession in Southeast Asia’s second-biggest economy.
Prayuth made the announcement in a speech in Bangkok yesterday, after he was officially endorsed as the nation’s leader by royal command. In the hours after the ceremony, demonstrators gathered at Victory Monument in central Bangkok to denounce the May 22 coup in defiance of martial law that was imposed two days before the putsch.
Prayuth said he will name a prime minister and legislative council to implement electoral reforms and measures aimed at bolstering the economy, which shrank 0.6 percent in the first quarter as political unrest that started in October discourages consumer spending and damps industrial output and tourism. The junta said it will honor payments to rice farmers, accelerate spending on infrastructure and support free trade.
“The council’s priority is to maintain peace and order,” Prayuth said in the televised address, four days after overthrowing the government. “We will set up new organizations to reform every aspect that causes problems and conflicts.”
A night-time curfew will remain in force until tensions ease and protesters on both sides of the nation’s political divide will face legal action, Prayuth said. Small anti-coup protests have sprung up across the capital in recent days. Demonstrators faced off with soldiers yesterday at Victory Monument, a major protest site earlier this year for opponents of the government of Prime Minister Yingluck Shinawatra, which was toppled by the coup.
“The council will do our best to avoid clashes through negotiation,” Nattawat Chancharoen, an army spokesman, said in nationally televised statement. “If protests don’t end, security forces will have to strictly enforce the law.”
The operator of Bangkok’s elevated rail system suspended services to stations around Victory Monument as protesters gathered to oppose the coup. The demonstration ended peacefully.
The army has been surprised by opposition to the coup in Bangkok, said Kevin Hewison, director of the Asia Research Centre at Murdoch University in Perth. “Prayuth seems to have underestimated the level of support for democracy and electoral politics as well as the rejection of military authoritarianism.”
Thailand’s benchmark SET Index of stocks has fallen 1.2 percent since the May 22 military intervention, paring this year’s gain to 6.9 percent. The baht has weakened by 0.3 percent against the dollar since the coup.
“The market has been quite resilient,” Stock Exchange of Thailand President Charamporn Jotikasthira said today in a Bloomberg Television interview from Bangkok. “What happened in the past several months, we were in a political deadlock and as a result we were not able to move the economic engine properly. So we just have to reset the system and get back to normal as soon as possible.”
Prayuth seized power last week after months of street protests against the government headed by Yingluck, whose brother Thaksin Shinawatra was ousted in a coup in 2006. Even after Yingluck was forced to step down by the Constitutional Court on May 7, her opponents continued to push for the removal of the entire government in a bid to erase the Shinawatra family’s influence on politics, raising the risk of a backlash from the mostly rural voters who elected Yingluck in 2011.
Yingluck was detained and later released by the junta, army spokesman Winthai Suvaree said yesterday. Leaders of a pro-government group known as the Red Shirts may be detained for as long as seven days, he said. Suthep Thaugsuban, who led a six-month street campaign to oust Yingluck, was released by the army yesterday.
To kickstart the economy, the junta has pledged to remove trade barriers and assess the feasibility of expanding the nation’s rail network, said Somchai Sujjapongse, head of the Fiscal Policy Office at the Ministry of Finance, after a meeting yesterday with Air Chief Marshal Prajin Juntong, who was appointed by the military to oversee economic ministries.
The junta will also review a 350 billion baht water-management program that was initiated by the previous government and then stalled by the nation’s courts. An infrastructure spending plan proposed by Yingluck’s administration, which included a proposal for a high-speed rail network, was blocked by the Constitutional Court.
Before the coup, anti-government protesters had been demanding an unelected council run the country to wipe out the influence of Thaksin and Yingluck, whom they accuse of corruption and using the appeal of economically damaging populist policies to win the last five elections. After Thaksin’s overthrow, it was more than a year before elections were held and civilian rule was restored.
In his address, the army chief said that “everyone was suffering” as a result of the past six months of political uncertainty, and that it was time to “restore political and social stability, as well as confidence.”
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