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New Thai prime minister faces immediate protests

BANGKOK (Reuters) - Opposition leader Abhisit Vejjajiva became Thailand’s third prime minister in as many months on Monday, taking control with a slender majority in parliament and an economy teetering on the brink of recession.

In a sign of the trouble in store for the Oxford-educated economist, 200 supporters of the government sacked by the courts two weeks ago blocked access to parliament after the vote and smashed windows of cars carrying MPs from his Democrat Party.

Chanting “Abhisit, army nominee,” the red-shirted demonstrators denounced the 44-year-old as a front man for the military, which ousted elected leader Thaksin Shinawatra in 2006 and which has been accused of political meddling ever since.

Abhisit was backed by 235 MPs against 198 for the former government’s candidate, but his thin majority is likely to take a hit on January 11 when by-elections are held to replace 29 MPs fired in this month’s court ruling.

Relying on small parties and a breakaway faction of the pro-Thaksin Puea Thai party, he will have little room for maneuver as the global slowdown and the recent blockade of Bangkok’s airports by anti-Thaksin protesters hit the tourism- and export-driven economy.

“Very soon, the impact of the global economic crisis will be felt more seriously in Thailand. The new prime minister needs to prepare immediately for that,” Sompop Manarungsan of Bangkok’s Chulalongkorn University said.

Outgoing Finance Minister Suchart Thada-Thamrongvech has forecast economic contraction of 0.5-1.0 percent in the first quarter of 2009 from a year earlier and zero growth in the second, putting it on the brink of recession.

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“There are no new bookings. You go to the hotels and they are empty,” Luzi Matzig, managing director of travel agency Asian Trails, said of the double blow from the airport shutdowns and economic downturn.

Abhisit declined to talk about policies after the vote, but said last week that reviving growth through increased government spending would be his top priority, although it remains to be seen where he will get the money from.

He has suggested there could be some reallocation of regional spending, but that would be sure to outrage voters in the populous north and northeast, where love of Thaksin and loathing of Abhisit runs deep.


Hours after Abhisit’s election, the Foreign Ministry announced it had revoked Thaksin’s diplomatic passport on Friday, and may also withdraw his regular passport.

Thaksin has spent time in Hong Kong, Beijing and Dubai since Britain canceled his visa in November after his conviction in absentia on conflict of interest charges in Thailand.

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On Saturday, the telecoms billionaire made a recorded video address to 40,000 supporters at a Bangkok sports stadium, calling for national reconciliation after three years of turmoil and urging the military not to meddle in Monday’s parliamentary vote.

“May all sides take one step back and respect the results,” he said. “Please don’t use any institution to intervene. Just let the country move forward. Don’t make people suffer more.”

His supporters have accused the military of launching a “silent coup” by claiming to have royal backing and pushing small parties in the previous government to form a Democrat-led government, a charge the army has denied.

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A member of Thaksin’s inner circle said last week the gloom hanging over the country may well make Abhisit’s win a Pyrrhic victory, destroying his image among businessmen and Bangkok’s middle classes as a safe pair of hands on the economic tiller.

Abhisit is also unlikely to make any headway in solving the fundamental rift in Thai society between the Bangkok elite and the countryside, where voters still hanker after Thaksin and his policies of cheap healthcare and agricultural loans.

“We have been and continue to be quite pessimistic about the prospects of such a resolution occurring in the short- to medium-term,” Economist Intelligence Unit analyst Jacob Hamstra said.

Additional reporting by Nopporn Wong-Anan and Darren Schuettler; Writing by Ed Cropley; Editing by Alan Raybould and Dean Yates