Political Risks Ratings Downgraded Amid Rising Tensions

Prime Minister Yingluck Shinawatra and her ruling Puea Thai Party (PTP) are pushing ahead with plans to establish a political reform forum, which will seek to revive efforts for political reconciliation within Thailand's deeply divided population. Our view remains, however, that the government's piecemeal attempts at political reforms are unlikely to achieve any meaningful progress in reconciling the rural population's support for ousted former Prime Minister Thaksin Shinawatra, and the urban elites who played a major role in removing him from power by instigating a military coup back in 2006. Furthermore, we believe that the renewed assertiveness of the PTP in pushing ahead with the amendment of the constitution - mainly targeting a new amnesty bill that could potentially pave the way for Thaksin's return to the political arena - could risk triggering widespread protests.

Indeed, small-scale political demonstrations have already broke out in the lead up to and during last week's parliamentary debate on the amnesty bill and we see increasing risks that the magnitude of such protests could intensify. In anticipation of heightened political uncertainties in Thailand over the coming months, we have downgraded Thailand's short-term political risk rating (STPR) from a score of 69.2 (out of 100) previously, to 66.3.

In what has been widely deemed as an aggressive move by the PTP to legitimise the party's proposed reforms, Prime Minister Yingluck has invited several high-profile international figures to participate in the forum and has called on opposition leader and former Prime Minister Abhisit Vejjajiva to take part in a joint dialogue. Judging from the response from opposition leaders, we believe that the forum will be dominated by PTP members and the party's political allies. According to a recent report published by the Bangkok Post, chief opposition whip Jurin Laksanavisit has criticised the PTP of using the reform forum as a means to nullify corruption charges against Thaksin. He also added that the forum is likely to lead to the drafting of an entirely new charter, one which would exclude Section 309 that legalises the actions of individuals who instigated the military coup in 2006. We believe that the lack of a relatively balanced representation of PTP and opposition leaders would undermine the credibility of any proposed reforms, resulting in yet another fruitless attempt in making any progress on political reconciliation.

Protests Could Intensify
South East Asia - Short-Term Political Risk Ratings & Components (Score Out Of 100)

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

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