Assessing The Political Turmoil

BMI View: We assess three scenarios that could play out over the coming months as the political situation in Thailand continues to intensify. We see increasing risks that Prime Minister Yingluck and her administration could resort to a violent clampdown on protestors by enforcing the Internal Security Act. We view this scenario as the most likely outcome given that this is also one of the very few viable options that the government has to bring a swift end to the protests. Our worst-case scenario suggests a potential military coup to overthrow the government, adding to Thailand's long and tumultuous history that has seen 18 coups since the country became a constitutional monarchy in 1932.

Thailand's political situation is deteriorating rapidly following a failed attempt by Prime Minister Yingluck Shinawatra and the ruling Puea Thai Party (PTP) to enact an amnesty law for political offenders - a move that is widely viewed as part of a broader plan to bring ousted former Prime Minister Thaksin Shinawatra back to power. Although widespread protests had already begun when the PTP first attempted to pass the amnesty law, the intensity of the protests only escalated after the party took an even more aggressive stance by proposing for a fully-elected Senate (a move that would likely have placed more of Thaksin's political allies in the Senate). However, it appears that the PTP's plans have completely backfired after its proposal to alter the composition of the Senate was ruled unlawful by the Constitutional Court.

The PTP's adamant stance to pass the amnesty law has also riled anti-Thaksin groups, triggering violent protests throughout Bangkok on November 25 as protestors broke into government compounds, forcing the government to expand the Internal Security Act (ISA) into other areas surrounding the capital. More than 100,000 protestors reportedly took part in demonstrations led by former opposition Democratic Party member Suthep Thaugsuban. Large scale protests were held in locations that included military and police headquarters, government offices and television stations, with protestors urging government officials to abandon their duties and take their side in overthrowing the Yingluck administration. Below, we assess three scenarios that could play out over the coming months as the political situation in Thailand continues to intensify.

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This article is tagged to:
Sector: Country Risk
Geography: Thailand

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