Thai PM buys time with referendum plan

Fri Sep 5, 2008 5:13am EDT

(Writes through with analysts)

By Darren Schuettler

BANGKOK, Sept 5 (Reuters) - Prime Minister Samak Sundaravej has bought some time with a referendum aimed at defusing street protests, but it will do nothing to resolve Thailand's fundamental political conflict, analysts say.

Leaders of the three-month old campaign to oust the 73-year-old premier vowed to continue their campaign, including the 11-day occupation of Samak's official compound in Bangkok.

But with a national referendum looming it becomes much harder to force Samak out through intervention either by the military or the king, who has stepped into disputes in the past.

"I don't see any quick resolution of this situation," Giles Ungphakorn of Bangkok's Chulalongkorn University said, adding Samak had cleverly batted the ball back to the anti-government People's Alliance for Democracy (PAD).

"The PAD's strategy now will be to increase pressure and they will have to discredit the referendum," he said of the motley coalition of royalist businessmen, academics and activists leading the sit-in at Government House.

Samak, who refuses to quit or call a snap election, announced the referendum on Thursday, but the timing and questions to be put to Thailand's 65 million people were not known yet.

The Senate said it would not be rushed into approving a new referendum bill, which could take 90 days. One election commissioner said it may take six months for a vote to be held.

"We feel there are just two ways out -- either the prime minister quits or he calls an election. A proposed referendum wouldn't end the problems," Thanachart Securities said in a research note.

The stock market has fallen more than 26 percent since the PAD launched its campaign at the end of May, while the baht has plunged to a 19-month low against the dollar. The crisis has also hit tourism, with airlines and hotels reporting cancellations.

Rubber exporters said some shipments had been disrupted by anti-government industrial action by rail workers.

PUPPET OR PM?

The PAD, which accuses Samak of being a puppet of former Prime Minister Thaksin Shinawatra, removed in a 2006 coup, launched its street campaign in May, signalling a return to open political warfare in Thailand.

Thaksin, still admired by rural Thais who handed him huge parliamentary majorities in return for his populist programmes, is believed to be pulling political strings from exile in London.

He is despised by Bangkok's middle class, the military and the royalist establishment, who all opposed his modernising agenda. He was also accused of abuse of power and corruption while in office.

"The current drama could take years, if not decades to resolve itself. It is nothing short of a class war with two opposite groups of elites backing their respective sides," Bangkok's Nation newspaper said.

It said Samak was betting that the military "don't have the cheek" to launch another coup before the referendum.

Army chief Anupong Paochinda has said repeatedly that a putsch would not end the country's political crisis.

But Anupong has also refused to use the emergency decree, imposed by Samak after one man was killed and 45 hurt in clashes between pro- and anti-government groups, to evict the PAD.

"The question is whether or not the PAD will have enough patience to wait for this vote or will it continue to provoke the situation," said Kim Eng Securities analyst Vikas Kawatra.

Serious bloodshed on the streets could prompt the military or King Bhumibol Adulyadej to intervene. A move by the latter would be unlikely to favour the government, although it would be nuanced and espouse the need for national harmony and stability.

There has been no major violence in Bangkok since emergency rule was imposed on Tuesday, but the situation remains tense.

A gunman on a motorcycle fired at 100 students marching to protest at Samak's home on Thursday night, wounding two of them.

Thailand's crisis has worried its foreign partners, including the United States which said it hoped emergency rule would not drag on and urged both sides to refrain from violence. (Additonal reporting by Alan Raybould and Ed Cropley; Editing by Jerry Norton)






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