Serious Unrest Beginning to Impact Thai Economy

Thailand’s political situation has become increasingly volatile with protests calling for the removal of Prime Minister Yingluck Shinawatra. The protests are backed by royalist nationalists, led by former member of the Democrat Party and deputy prime minister, Suthep Thaugsuban.

 

According to Maplecroft’s Thailand Country Risk Report, the Kingdom's economy is also beginning to feel the effects of the current political crisis. Consumer spending has dampened and the government shutdown will delay progress in infrastructure investment. Furthermore, Thailand has entered a recession for the third time in 16 years, with the Thai baht depreciating significantly against the US dollar over much of 2013.

 

The anti-government demonstrations have been ongoing since the passage of a controversial amnesty bill in the House of Representatives on 1 November 2013. The bill, introduced by the ruling Pheu Thai party, would have granted amnesty to anyone implicated in Thailand’s political turmoil since 2006 – including protest leader Suthep, who faces charges for his role in authorising military force in the crackdown on mass anti-government demonstrations in 2010.

 

The bill would also have allowed Yingluck’s brother, former prime minister Thaksin Shinawatra, to return to the country following a self-imposed exile since being charged with corruption in 2008.

 

Although the amnesty bill was rejected by the senate, Suthep utilised the anti-government momentum from the fallout caused by the bill to form the Civil Movement for Democracy (CMD) to attempt to remove the Pheu Thai-led government.

 

While the protests have remained mostly non-violent, the shadow of the violence in 2010 looms over the current situation. The longer the political turmoil continues the greater the risk of violent confrontation between pro- and anti-government supporters. Thus far, red-shirt supporters of the government have refrained from staging mass demonstrations in Bangkok. However, they have vowed to counter any attempts by the CMD to interfere with the February elections.

 

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