Thai PM under siege, lengthy protests take toll on economy

BANGKOK Mon Feb 17, 2014 7:16am EST

1 of 4. Soldiers stands guard at the temporary office of Thai Prime Minister Yingluck Shinawatra during a protest in Bangkok February 17, 2014.

Credit: Reuters/Chaiwat Subprasom

Related Topics

BANGKOK (Reuters) - Protesters seeking to oust Prime Minister Yingluck Shinawatra surrounded Thai government headquarters on Monday in response to police efforts to clear them from the streets, as farmers besieged her temporary office to demand payment for rice.

Thailand has been in crisis since November, when Bangkok's middle class and the royalist establishment started a protest aimed at eradicating the influence of Yingluck's brother Thaksin, a populist former premier ousted by the army in 2006 who is seen as the power behind her government.

Data published on Monday showed the economy grew just 0.6 percent in the fourth quarter from the third and, with the country likely to be without a fully functioning government for months, the state planning board slashed its forecast for 2014.

About 10,000 anti-government demonstrators surrounded Government House in Bangkok, taking back control of a road the police had cleared them from on Friday in the first real sign of a pushback by the authorities after months of protests.

These protesters view Yingluck as a proxy for Thaksin, who has lived in exile since 2008 rather than face a jail term for abuse of power handed down in absentia that year.

"We will use quick-dry cement to close the gates of Government House so that the cabinet cannot go in to work," said Nittitorn Lamrue of the Network of Students and People for Thailand's Reform, aligned with the main protest movement.

It was a symbolic gesture, Yingluck having been forced to work elsewhere since January.

The separate protests by rice farmers could turn out to be more damaging for Yingluck.

Rural voters swept her to power in 2011, when her Puea Thai Party pledged to pay rice farmers way above market prices for their harvest. But the program has run into funding problems and some farmers have not been paid for months.

"END OF OUR TETHER"

Television showed farmers climbing over barbed wire fences and barriers at a Defense Ministry compound where Yingluck has set up temporary offices. They pushed back riot police, who retreated from confrontation, but did not enter the building.

"The prime minister is well off but we are not. How are we going to feed our children? I want her to think about us," said one protesting farmer. "Farmers are tough people, they wouldn't normally speak out but they are at the end of their tether."

Farmers' representatives later met ministers, but when Finance Minister Kittirat Na Ranong came out to speak to the crowd he was pelted with plastic bottles.

The government hopes to sell about 1 million tons of rice through tenders this month to replenish its rice fund and is also seeking bank loans to help it pay the farmers.

The Government Savings Bank said on Sunday it had lent 5 billion baht ($153 million) to the Bank for Agriculture and Agricultural Cooperatives (BAAC), which runs the rice scheme.

It did not say what the money would be used for, but some depositors, apparently hearing on social media that it would be used for the rice payments and would therefore help the government, took their money from the bank on Monday.

"Today the bank's clients took out around 30 billion baht. Most clients who withdrew were in Bangkok and the south. Around 10 billion baht was deposited. This doesn't impact the stability of the bank," Worawit Chalimpamontri, president of the savings bank, told a televised news conference.

He said there would be no more interbank lending to the BAAC because the loan was "misused". He did not elaborate.

The 30 billion baht withdrawn represents about 1.6 percent of total deposits, according to Reuters calculations.

DISRUPTED ELECTION

Yingluck called a snap election in December and has since led a caretaker administration with only limited powers.

The election took place on February 2 but it was disrupted in parts of Bangkok and the south, the powerbase of the opposition, and it may be many months before there is a quorum in parliament to elect a new prime minister.

The Election Commission has set April 27 as the date to re-run voting that was disrupted but the government said on Monday it wanted the much earlier date of March 2.

"According to the law, the House of Representatives must convene 30 days after a general election," Pongthep Thepkanjana, a deputy prime minister, said after a meeting between the commission and government.

That date seems improbable, especially as the commission and government can't agree on procedures for fresh voting and the Constitutional Court may be asked to rule.

The anti-government protesters, who are aligned with the main opposition Democrat Party, want electoral rules changed to limit Thaksin's influence before an election is held, although their precise demands remain vague.

They accuse Thaksin of nepotism and corruption and say he used taxpayers' money for generous subsidies and easy loans that have bought him the loyalty of millions of poorer voters in the north and northeast.

Consumer confidence sank in January to its lowest level in more than two years and, with big infrastructure projects on hold because of the political vacuum, the planning agency cut its forecast for economic growth in 2014 to between 3.0 and 4.0 percent from 4.0-5.0 percent seen in November.

"Confidence is low and private sector demand in the domestic economy remains weak given the political deadlock," said Gundy Cahyadi, an economist with DBS Bank in Singapore.

($1 = 32.5900 baht)

(Additional reporting by Panarat Thepgumpanat, Athit Perawongmetha and Orathai Sriring; Writing by Alan Raybould; Editing by Alex Richardson and Robert Birsel)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (6)
Thoob wrote:
I wonder where the new government went wrong. They promised the rice purchase program to essentially buy the votes to be elected, but was there intent to actually pay the farmers, was it a ploy the whole time just to get their votes and hope they were to disorganized to protest, or did something go wrong inside the new political party, and someone either severely underestimated what the payouts were going to be or it is rife with corruption and too many people took too big of a cut and the program lost its funding. One of these scenarios fits the crime, the question is which

Feb 17, 2014 1:24am EST  --  Report as abuse
Eric.Klein wrote:
Protesting farmers should realize that the anti-government protesters are not their friends, and should they win all of the rice purchases will be canceled – including those that have not yet been paid.

Their best bet is to back the current government 100% or they will lose everything – possibly their 1 person 1 vote status.

Feb 17, 2014 5:02am EST  --  Report as abuse
JPHR wrote:
This article is biased in implicitly suggesting that the government bought the rice farmers. It omits to mention that a previous incarnation of the ruling party also introduced for instance affordable basic health care.
When mentioning the bloody crackdown of the previous “Democrat” (actually elitist bordering on racist) administration (brought to power following a coup) it omits the interesting detail that Suthep Thaugsuban was responsible for ordering that.
The role of the Election Commission is highly questionable. Instead of limiting itself to its job, members have issued all sorts of comments on the wider situation and seem intent on protracting the current limbo instead of resolving it asap through the ballot box.

Feb 17, 2014 6:14am EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.