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Thai Military-Backed Government Set to Tighten its Grip on Power

imageForex7 hours ago (Jun 16, 2020 11:00PM ET)

Thai Military-Backed Government Set to Tighten its Grip on Power

(Bloomberg) — The biggest party in Thailand’s pro-military ruling coalition is due to pick a new leader soon, a step that’s expected to strengthen the stability of the government by resolving internal rifts.

Prawit Wongsuwan, a former army chief, is the favorite to head the Palang Pracharath party 15 months after a disputed election ended direct military rule. Prawit is the chief strategist for the party, which was carved out of the junta and formed the coalition after the poll.

Analysts expect an ensuing Cabinet reshuffle to alleviate the factional disputes. Prime Minister Prayuth Chan-Ocha’s previously slim parliamentary majority has also expanded after a pro-democracy party was broken up. That backdrop boosts the coalition’s odds of lasting its four-year term, despite anti-government protests that flared until Covid-19 sparked a lockdown.

“This is about the military and its allies wanting to be fully in charge,” said Kevin Hewison, an emeritus professor at the University of North Carolina at Chapel Hill. The new party leadership and freshened Cabinet may spend more in rural areas to bolster support ahead of the next poll in 2023, he said.

More than half of Palang Pracharath’s executive committee resigned on June 1, forcing Finance Minister Uttama Savanayana out as party leader and triggering speculation about his future. The new committee must be installed by mid-July.

Thanakorn Wangboonkongchana, a spokesman for Palang Pracharath and Uttama’s aide, declined to comment on Prawit or Uttama ahead of the vote on the new executive committee. Other party members have said the restructuring won’t interfere with the government’s work.

Investors don’t expect big policy changes from the coming political shakeup but are waiting to see who gets the key economic portfolios, according to Poramet Tongbua, a Bualuang Securities Pcl strategist in Bangkok.

Former army head Prayuth, 66, seized power in 2014 and ran the junta with Prawit by his side. Palang Pracharath helped bring Prayuth back as premier after the election.

Prawit, 74, was cleared of wrongdoing by the graft agency after being accused of failing to declare 22 luxury watches while serving as a politician. Prawit, a deputy premier in the government, said he borrowed the timepieces from a friend who subsequently died.

Before the virus crisis, Prayuth and his backers in the royalist establishment faced protests from critics who dispute the fairness of the 2019 election.

On Monday, both he and Prawit warned people against trying to undermine the palace, with Prawit saying they will be prosecuted. The comments follow rare but growing public references online to matters or laws related to the country’s powerful monarchy.

Reliant on tourism and exports, Thailand faces one of emerging Asia’s worst economic contractions this year after Covid-19 hurt travel and trade. The Thai stock market’s 13% drop in 2020 exceeds the 7% fall in an Asia-Pacific index.

(C)2020 Bloomberg L.P.

Thai Military-Backed Government Set to Tighten its Grip on Power

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