Thailand is set for more political upheaval after Pita Limjaroenrat was barred by parliament from running for prime minister Wednesday, angering his supporters and opening the door for his coalition partners to seek the top job.
(Bloomberg) — Thailand is set for more political upheaval after Pita Limjaroenrat was barred by parliament from running for prime minister Wednesday, angering his supporters and opening the door for his coalition partners to seek the top job.
Thailand’s parliament will convene on July 27 to vote again on the country’s new prime minister. Pita, the leader of the party that won the May general election, was blocked from heading the next government with lawmakers deciding he cannot be nominated again — his first attempt to get parliament’s backing last week failed as conservative parties and the military-appointed Senate voted against him.
The moves leave Pita with near-zero chance of leading the country, although the eight-party pro-democracy coalition his Move Forward Party cobbled together after the May 14 polls still has a shot at ending the nearly decade-long military-backed rule. Pheu Thai, the second-biggest party in the alliance, is waiting to discuss with partners on the strategy for the next vote, Srettha Thavisin, a prime ministerial candidate of the party, told reporters Thursday.
While Pita has already said he’s willing to let Pheu Thai lead government formation efforts, he’s yet to officially concede that he’s exhausted all his chances.
“Today, we’re still bound by the MoU,” Srettha said, referring to the post-poll pact with Move Forward and suggestion that time is of essence. How it proceeds “depends on the negotiation team,” he said, while clarifying that it was still too early to say if his party will form a new alliance.
Local equities had their longest winning streak since the start of the year, with the SET Index rising for a fifth straight day on hopes that a Pheu Thai candidate in place of Pita would have a better chance of forming government.
100,000-strong March
Shortly before parliament blocked Pita’s bid Wednesday, a court had suspended Pita as a lawmaker, pending a final verdict on his disqualification over alleged breach of election rules. Pita urged his supporters to fight alongside him. Protesters gathered outside of the parliament gates Wednesday, with police officers in flak jackets lined up on the other side.
Supporters also started arriving at Rajadamnoen Road in front of Bangkok’s Democracy Monument since Wednesday night. The protest leader Arnon Nampa called on sympathizers outside of Bangkok to join them, with a plan to hold a 100,000-strong march to the government house to condemn Pita’s ouster from the race.
The developments bear uncanny similarities to earlier ones against Thanathorn Juangroongruangkit, leader of Move Forward’s predecessor party. Thanathorn was found guilty by the same court for holding media shares and disqualified as a lawmaker. His party, known as Future Forward, was later dissolved in another case, igniting a mass protest movement in 2020 that led to unprecedented calls for monarchy reforms.
What is certain is a period of political limbo, leaving caretaker Prime Minister Prayuth Chan-Ocha, who came to power in a 2014 coup, in charge in the interim and policy making stalled.
The key risk will be a delay in endorsing the nation’s annual budget for the fiscal year starting Oct. 1, which could hurt spending in an economy already reeling from slowing exports. Protests are also a risk to tourism, the only growth engine currently operating at full steam.
“We do not rule out the possibility that PM selection will spill over into August,” said Tim Leelahaphan, a Bangkok-based economist at Standard Chartered Bank Plc. “We expect political noise to rise further even after PM selection concludes, as it remains to be seen how voters will perceive the selected PM.”
Although investors previously wagered that the political deadlock in Thailand may come to an end soon, concerns over the delay in forming a government more than two months after the elections as well as approving the budget are pushing up borrowing costs for companies.
The yield of 5-year BBB-rated local currency notes in Thailand has jumped nearly 10 basis points in July, while that of similar notes in Indonesia and Malaysia fell around 5 and 7 basis points, respectively, according to data compiled by Bloomberg.
Coalition Math
With Wednesday’s vote indicating that a candidate might get only one shot at becoming prime minister, Pheu Thai might risk its chance should it continue to stick with Move Forward — whose pledge to reform the so-called lese majeste law that punishes anyone defaming or insulting the royals is opposed by the conservative camp.
“The one-time nomination is a new precedent,” Srettha said Thursday. “The next prime minister vote must then be approached carefully.”
He noted that 250-member Senate vote was crucial for a win, and that it’s clear that the next party to nominate a prime minister must not have Article 112 in its agenda. Srettha was referring to Pita’s campaign promise on the royal insult law.
Also, the Constitutional Court hearing a separate case regarding Move Forward’s disbandment only strengthens the case for Pheu Thai to explore options.
“This is a very good and legitimate excuse for forming bigger, new alliances to garner enough votes for prime minister approval,” said Napon Jatusripitak, visiting fellow at ISEAS-Yusof Ishak Institute.
Pheu Thai may be tempted to align with conservative groups such as Bhumjaithai Party of cannabis champion Anutin Charnvirakul or Palang Pracharath Party of former army chief Prawit Wongsuwan. Anutin told reporters Thursday that he hasn’t been approached by Pheu Thai yet.
While Move Forward has 150 seats in the 500-member lower House of Representatives after Pita’s suspension, Pheu Thai has 141. As regards the conservatives, Bhumjaithai has 71 seats, Palang Pracharath 40, United Thai Nation 36 and Democrat Party 25. The winner needs to have more than half the votes in the combined National Assembly, whose strength is currently at 748.
Asked whether Pheu Thai will stick with Move Forward, Srettha said: “do the math.”
–With assistance from Napat Kongsawad, Suttinee Yuvejwattana, Pathom Sangwongwanich, Anuchit Nguyen, Margo Towie, Ian Sayson and Harry Suhartono.
(Updates with Pheu Thai leader’s comments from the third paragraph,)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.