Government sets in place tight security in bid to avoid repeat of violence in April when army was called to disperse rioters on streets of Bangkok

See original here:

Thousands of Supporters of Former Thai PM Mark Coup Anniversary

The coup-making coalition’s chief mistake was their attempt to turn back the clock to pre-Thaksin Thailand. This mistake has been working its way through the body politic in various manifestations. Corrective measures and pacification campaigns from the sufficiency movement and the military’s “moderation society” to Prime Minister Abhisit Vejjajiva’s “I love Thailand” have been unable to rein in and put a lid on these newly unleashed forces of change.

The coup-makers then appointed a lacklustre interim government and saw to it that the coup-making coalition was given the upper hand under a new set of rules enshrined in the 2007 constitution to pin down the development of democratic institutions.

Most baffling of all was the coup-making coalition’s unwillingness to simply acknowledge that Thaksin had to go because he was a crook, but that his positive legacies in popular stakeholder-ship would be incorporated. Getting rid of parts of the Thaksin regime while retaining some in order to move on would have engendered reconciliation and a way forward.

All things considered, the military is now resurgent. Its budget has increased substantially. It has reversed many of the security sector reforms that were broached in the late 1990s, including more streamlined personnel. Its anachronistic agencies from decades past, particularly the Internal Security Operations Command, have been given new leases of life. Isoc is now the main driver of the moderation society, or “mo-so,” campaign. The top brass are in charge of key policy areas that had been taken away after their disgraceful intervention that led to the crisis in May 1992.

Civil-military relations are increasingly dictated by the brass. Indeed, the generals are back, and this time they will stay and insist on their role as the self-professed protectors and guardians of how Thailand shapes up in the near term.

Thailand is among the region’s more open economies, with exports accounting for around 65% of gross domestic product (GDP) in recent years. Those shipments span the value-added gamut, with the country serving as a production and export hub for multinational automobile manufacturers, while maintaining its traditional position as one of the world’s leading rice, rubber and seafood exporters.
So far Thailand has been hard hit by flagging global demand, particularly in the US and Europe. Exports fell 15.7% year on year in December, the second consecutive month of declining growth, according to Bank of Thailand statistics. The Ministry of Finance’s Fiscal Policy Office meanwhile projected the Thai economy contracted a worse-than-expected 3.5% in the fourth quarter. Independent analysts have carried forward that downbeat analysis, predicting economic and export growth will both be negative territory in 2009.

Thaksin supporters gather for third anniversary of 2006 coup

Lower provisioning requirements for nonperforming loan (NPL) stocks and impressive year-on-year loan growth, which was up 11% for the entire sector, drove those countercyclical gains. While extending new credits, the Thai financial system’s overall NPL rate fell from 9% of total outstanding loans in 2007 to 7% at the end of last year. Meanwhile Thai banks’ Tier 1 capital and capital adequacy ratios (the ratio of capital to risk-weighted assets) are now strong by international standards at 11% and 14% respectively.
It seems likely in the deteriorating global and local economic environment that Thai banks will relinquish some of those recent balance sheet gains. Analysts point to two particular areas of potential volatility, which if aggravated in the year ahead could raise questions about possible systemic risk: the first entails state-owned Krung Thai Bank’s low 40% loan loss coverage ratio for its NPLs; the other Thai Military Bank’s stubbornly high 16.4% NPL ratio.

The same protest group occupied Government House for nearly three months beginning last August, effectively crippling the workings of two different Thaksin-affiliated governments. A modicum of stability has returned with the formation of Abhisit’s coalition government, which is believed to have military backing and has prioritized restoring foreign confidence.

Investor confidence has not yet fully recovered from the military appointed administration’s surprise move in December 2006 to impose and then retract capital controls on foreign equity, bond and currency transactions. A nationalistic motion the following year to amend the Foreign Business Act spooked Japanese investors, many of whom have their Thailand operations structured in a way legislators aimed to ban.
Meanwhile a new government small business loan program for unemployed workers requires that the recipients return to their home provinces to receive the funds. Still there are early indications that the government has not committed enough resources to tide over the rural grass roots sector. Aggrieved farmers in northern Lampang province in late January blocked roads and protested in front of the provincial hall on complaints they had not been involved in a corn mortgage scheme.

Incoming search terms for this article:

Related Stories

• Thai FM discusses plans for south
• PM vows migrant crackdown
• Thailand changes tack on refugees