September 1, 2008 / 4:51 AM / 11 years ago

UPDATE 5-Thai state unions plan strike to force PM out

(Recasts with strike threat, Moody’s statement)

By Pracha Hariraksapitak

BANGKOK, Sept 1 (Reuters) - Thailand’s public sector unions threatened a nationwide strike this week, piling more pressure on Prime Minister Samak Sundaravej to resign as protesters occupied his official compound for a seventh day on Monday.

Union leaders representing 200,000 workers at 43 state enterprises said the strike would start at state utilities on Wednesday and spread to other companies.

“If Samak refuses to quit on Sept. 3, we will go on strike nationwide,” Sirichai Maingam, president of the union at the state power utility, EGAT, told reporters.

The strike threat came hours after a small bomb exploded in a Bangkok police booth, raising fears of further violence in a three-month campaign to unseat the elected government. The blast shattered windows but caused no injuries shortly after 1 a.m. (1800 GMT on Sunday).

Thai shares have fallen more than 23 percent since protests began in May and fell just over one percent on Monday despite some better-than-expected inflation figures. (For more on stocks, bonds and the baht, click [IDn:BKK9192])

Moody’s Investors Service said the turbulence posed a threat to Thailand’s long-term economic stability.

“The escalation of political disturbances has introduced new uncertainties which compound the economic challenges facing Thailand, as well as other Southeast Asian economies, from the deterioration in global economic conditions,” Peter Byrne of the rating agency’s Sovereign Risk Group said in a statement. (Click [ID:nWLA8842])

A senior government source said Monday’s blast was a signal the People’s Alliance for Democracy (PAD) was taking its campaign to another level.

“The PAD has launched a guerrilla war with us,” the source, who asked not to be named, said.

Police echoed his comments, saying they believed it to be the work of agitators trying to depict the police as powerless.

The PAD, a group of businessmen and activists whose campaign against former Prime Minister Thaksin Shinawatra led to his overthrow in a 2006 coup, has always espoused peaceful protest.

However, last week’s raid on a state television station by men armed with knives and golf clubs, as well as the protracted Government House occupation behind razor wire barricades, has brought this into question.

A PAD spokesman denied any responsibility for the bomb.

“We had no reason to do that. It would only scare away protesters, not bring more people to join. We have other effective ‘civil disobedience’ measures to fight the government without planting a bomb,” Parnthep Pourpongpan said.

“I AM NOT AFRAID”

Tensions peaked on Friday when police used teargas and rubber bullets to repel 2,000 protesters trying to storm Bangkok police headquarters. Protesters also shut down three regional airports, all of which have since reopened.

Samak has said repeatedly that he would never bow to the PAD demands, and warned in his weekly radio address on Sunday that his patience was wearing out.

“I am not afraid, but I am concerned about chaos in the nation,” he said. “We cannot let the seizure of Government House continue indefinitely without taking action.”

Nobody knows how the crisis will end but scenarios involve Samak or the PAD caving in, a coup, a police crackdown, a snap election, or even intervention by King Bhumibol Adulyadej.

The revered monarch has stepped into several disputes during his 60-year rule but normally only after bloodshed.

As well as accusing Samak of being an illegitimate proxy of Thaksin, the PAD proclaims itself to be a defender of the king against a supposed Thaksin plan to turn Thailand into a republic.

Both accusations are denied by Samak and Thaksin, who skipped bail on graft charges and fled to London last month.

The PAD campaign against Samak, now in its 100th day, has sucked in support from a variety of state unions, leading to disruptions to rail and port services. Union leaders at state utilities have threatened to cut water and power supplies to government offices and buildings if the authorities use force against the PAD. (Additional reporting by Nopporn Wong-Anan and Ed Cropley) (Writing by Darren Schuettler; Editing by Alan Raybould)

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