November 14, 2010 / 8:16 AM / 9 years ago

Exclusive - Thai PM lauds Suu Kyi release, future unclear

YOKOHAMA, Japan (Reuters) - Thai Prime Minister Abhisit Vejjajiva said the release of Myanmar democracy champion Aung San Suu Kyi is a positive sign but it remains to be seen what it will lead to and the situation in Thailand’s neighbor bears watching closely.

Abhisit also said in an interview on Sunday that Thailand was willing to take more measures to control capital inflows if needed but stressed that it was not in the business of seeking a certain level for its baht currency.

Myanmar’s military rulers freed Nobel laureate Suu Kyi on Saturday after her latest house arrest term expired. The move is expected to revive debate over Western sanctions against the reclusive, resource-rich country.

“Exactly what this will lead to I think remains to be seen because there are a number of factors, transitions according to the constitution, elections, the clashes with the minorities that have taken place over the last week,” Abhisit told Reuters.

He added that he did not know yet exactly what kind of political role Suu Kyi would play.

“But I think it will become clear in coming days. In any case, I think the transition period may be two to three months, and will be something we have to watch very closely.”

Abhisit, who was in Yokohama, south of Tokyo, to attend a summit of the Asia-Pacific Economic Cooperation (APEC) forum, added that the Western powers’ reaction to Suu Kyi’s release would be one of caution.

“They will obviously welcome the move. But whether that will actually lead to change or a review of policies and long-term reactions is another matter.”

NO FOREX TARGET

Abhisit expressed no great concern about the strength of the Thai baht, which has risen more than 11 percent against the dollar this year, but said Thailand was willing to take more steps to control the influx of capital if they became necessary.

“They are not necessary as of now, but if there are excessive flows in the future, and if those flows warrant additional measures, we are willing to take them.

“But on the whole we are not in the business of either setting an exchange rate target or intervening to achieve a certain level. We just want to make sure there is no excessive volatility or speculation.”

The prime minister expressed confidence that the Thai economy would grow more than 7 percent this year, even after taking into account the negative effects of recent flooding.

“For the next year, I think it will slow down a little, but I think it would be a good, healthy rate of growth,” he said.

Thailand’s politics are bitterly polarized with no end in sight to a long-running crisis that has hurt tourism and dented business confidence.

Abhisit said the situation had calmed down somewhat over the past month or two, however, as his government continued to pursue reconciliation.

It is also launching a number of structural reforms to reduce income gaps, which many feel are an underlying factor behind divisions in the country, he added.

He also said he hoped to lift the state of emergency in four remaining provinces in the near future.

“I think we’ve seen encouraging trends over the last month or two. If this continues, and I encourage both sides to continue to preserve this stable environment, then the elections could be early next year.”

While there may be minor changes to the cabinet at times, there have been no discussions about a major cabinet reshuffle, he added.

Additional reporting by Dan Sloan; Editing by Edmund Klamann

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