Thailand avoids slide into chaos, says ASEAN head

By Susan Fenton and Deborah Kan

HONG KONG (Reuters) - Thailand's court ruling to dismiss Prime Minister Somchai Wongsawat had prevented a slide into chaos but the potential for more instability remained, the head of ASEAN said Wednesday.

"Right now the situation is quite fragile, but definitely the situation is in the process of a more stable, more acceptable and more legitimate government. It will take some time to find a balance," Surin Pitsuwan, head of the 10-nation Association of South East Asian Nations (ASEAN), told Reuters in an interview.

Thailand's Constitutional Court Tuesday dismissed the government of Somchai, whom anti-government protesters accuse of being a puppet of his brother-in-law Thaksin Shinawatra. Thaksin was ousted in a 2006 army coup and is now in exile.

"At least it has put a stop to the slide into chaos, even more chaos," said Surin, in Hong Kong for a meeting of former U.S. President Bill Clinton's Clinton Global Initiative.

Thousands of People's Alliance for Democracy (PAD) protesters packed up and left Bangkok's main international airport Wednesday after an eight-day blockade but Surin, a former Thai foreign minister, said there could be renewed tension.

"If the process ends up with a similar kind of structure (to before) then you can foresee some more tension in future. But if it could produce a credible and capable cabinet or leadership then you can expect stability and accommodation. So it depends on the outcome of the parliamentary process," he said.

Thaksin allies still dominate parliament and are expected to elect a new premier from among their number on December 8 -- the third prime minister in as many months.

ASEAN Tuesday postponed a summit scheduled for December 13-17 in Thailand until March because of the conflict. Surin said the meeting could take place before then, not necessarily in Thailand. Indonesia has offered to host some associated meetings.

"I think an earlier meeting is possible and personally I would welcome that. But this will very much depend on the member states and Thailand as chair," he said.

BAD TIMING

ASEAN comprises the Philippines, Indonesia, Thailand, Laos, Malaysia, Singapore, Brunei, Vietnam, Myanmar and Cambodia. Its dialogue partners China, Japan and South Korea are also due to attend the summit.

Thailand's preoccupation with its political problems was bad timing given the urgent need to address the global financial crisis, Surin said.

"It's certainly put some concern on the way in which we (ASEAN) are moving forward. But on the whole I think ASEAN is still a bright spot on the international landscape," he said.

"Our growth will be affected (by the financial crisis). It will not be as good as before but, still, it's a region that will experience growth," Surin said.

The Thai crisis stranded hundreds of thousands of foreign tourists over the past week as the PAD blockaded Bangkok's two main airports. Surin said three years of political turmoil showed the pressure Thailand was under to adapt to globalization.