SINGAPORE (Reuters) - Confidential U.S. Embassy cables released by WikiLeaks have shed unprecedented light on the biggest political risk faced by investors in Thailand -- the prospect of a royal succession intensifying social conflict.
Strict lese-majeste laws make it hard for investors to make informed predictions, but the issue of succession looms large at a time of deepening tension in Thailand following the worst political violence in its modern history over April and May.
While 83-year-old King Bhumibol Adulyadej, the world’s longest-serving monarch, commands supreme moral authority in Thailand, the leaked cables show doubts among key royal advisers about the suitability of his son and heir, 58-year-old Crown Prince Maha Vajiralongkorn.
General Prem Tinsulanonda, the head of the privy council and a former prime minister, Anand Panyarachun, another former prime minister, and privy councilor Siddhi Savetsila all expressed concern about the prince as the likely heir in private conversations, according to a leaked cable written by former U.S. Ambassador to Thailand Eric John.
“All three had quite negative comments about Crown Prince Vajiralongkorn,” John wrote in a memo dated January 25, 2010, and posted on the Guardian newspaper’s website on Thursday.
There has been no public comment by those quoted in the leaked cable on whether the comments attributed to them are genuine. “We’re not in a position to comment on the authenticity and accuracy of these documents because they did not originate from us,” said Foreign Ministry spokesman Thani Thongpakdihe.
Although talk of the Thai monarchy’s role and possible problems on the horizon are taboo and illegal, the topic is followed closely in Thailand’s financial markets, which fell briefly last year on concerns over the King’s health.
Siddhi, an Air Chief Marshall, acknowledged that “succession would be a difficult transition time for Thailand,” the U.S. ambassador said in the memo.
“While asserting that the Crown Prince will become King, both Siddhi and Anand implied the country would be better off if other arrangements could be made. Siddhi expressed preference for Princess Sirindhorn,” John wrote.
Princess Maha Chakri Sirindhorn is highly respected by Thais, while there is widespread disapproval of the prince’s lifestyle.
“Anand suggested only the King would be in a position to change succession, and acknowledged a low likelihood of that happening.”
Analysts say privately that there could be a prolonged period of turmoil and even civil unrest if the succession does not go smoothly.
“It’s the big issue, there is no doubt about it, and it comes up often in private discussions with our clients but it is not something to be aired in public,” said a Singapore-based regional analyst at an international investment bank, who asked not to be named because of the sensitivity of the subject.
Another major bank said in a report that succession worries impose a political risk discount on Thai assets.
Thailand’s financial markets are among the world’s strongest this year. Stock prices are up more than 40 percent and the Thai baht is trading at 13-year highs, making Thailand among several emerging markets vulnerable to a correction.
Prem, widely believed to have helped orchestrate a 2006 bloodless coup that ousted former Prime Minister Thaksin Shinawatra, said over lunch with John that the prince probably maintained “some sort of relationship” with Thaksin, a divisive figure reviled by Thailand’s establishment.
Thaksin, a telecommunications tycoon particularly popular among Thailand’s poor, was convicted in absentia on corruption-related charges and lives abroad to avoid jail.
He is a figurehead of the red-shirted anti-government protest movement whose supporters clashed with authorities in April and May during nine weeks of protests in which at least 91 people were killed and more than 1,800 wounded.
But Prem doubted the prince would come to Thaksin’s support in the future. “He does not enjoy that sort of relationship,” he was quoted as saying in the leaked January 2010 cable.
Suggestions of ties between Thaksin and the prince are contentious. Thaksin’s supporters have repeatedly clashed with the royalist military, now led by a general known to have the backing of Queen Sirikit. Thaksin and his allies have been accused of republicanism, which they deny.
A separate U.S. cable released this week quoted late former Prime Minister Samak Sundaravej as saying the Queen had encouraged the 2006 coup that toppled Thaksin and plunged Thailand into its current political crisis.
As a constitutional monarchy, the palace is officially above politics, but Samak said the Queen was supporting street protests against his government, dominated by a pro-Thaksin party.
Samak, premier for seven months in 2008, “showed disdain for Queen Sirikit, claiming that she had been responsible for the 2006 coup d‘etat...,” the U.S. ambassador said.
“Samak viewed himself as loyal to the King, but implied that the Queen’s political agenda differened (sic) from her husband‘s,” he added in the cable.
In another cable, a palace insider told the U.S. ambassador the “yellow shirt” protests against Samak’s government and the occupation of his offices had “irritated” the king, who explicitly told the army chief not to launch a coup.
The November 2008 cable described the Queen’s attendance at the October 13, 2008, funeral of a yellow-shirt protester killed during a demonstration as a “significant blunder” that jeopardized the public’s perception of palace neutrality.
Such candor on the monarchy is a rarity in Thailand.
Siddhi noted “that something as simple as excessive motorcade-related traffic jams caused by minor royals was an unnecessary but enduring irritant,” the U.S. ambassador wrote.
The king was admitted to hospital on September 19, 2009, and has been undergoing physical rehabilitation. Some palace insiders say he may be released soon, possibly on Sunday.
Reporting by Andrew Marshall; Editing by John Chalmers