Thailand weakened, but government stronger after riots

PHUKET: Prime Minister Abhisit Vejjajiva announced yesterday that the state of emergency would remain in place even though the authorities had managed to bring the anti-government protests to a tentatively peaceful conclusion.

“The situation has eased and is almost back to normal. But the mission of the emergency decree has not been completed. The government will not be careless, and we will be monitoring the situation closely,” he said in a nationally televised address.

Abhisit said military officers, police and civil servants would remain on alert for possible ongoing attacks on public property.

He also declared tomorrow and Friday as public holidays, extending this year’s Songkran break to an unprecedented 10 days.

The long holiday began last Friday when the government designated it a public holiday after the red shirted protesters blocked Victory Monument and caused traffic chaos in Bangkok.

The ramifications for the economy of a ‘developing’ country suffering a 10-day cessation of productivity have yet to be revealed, but  international ratings agency Standard & Poor’s [S&P] has lowered Thailand’s local currency rating from “A” to “A-“, saying the outlook was negative and that the rating could be lowered further. The country’s foreign-currency rating remains unchanged at “BBB+”, with a negative outlook.

The local-currency rating is an assessment of the probability of default on local currency obligations, while the foreign-currency rating evaluates the probability of default on foreign currency obligations (taking into account all sovereign risk and currency conversion considerations).

It was not immediately clear how much of yesterday’s S&P downgrade of Thailand’s local currency was attributable to political strife, and how much was seen as direct economic damage arising out of loss of productivity and the widespread destruction of public property.

But the massive blows to Thailand’s economy and national image in the world appear to have caused severe erosion in the number of Thais who show sympathy for fugitive former prime minister Thaksin Shinawatra and his mob of protesters. Not only did legions of ordinary citizens turn against and physically assault the rioters, forcing them to shed their red shirts out of fear for their lives, but results from a poll of 1,207 people conducted yesterday by Rajabhat Suan Dusit University showed 64 per cent satisfied with how the government dealt with the crisis.

As for the political capital of the convicted former prime minister, most pundits in this morning’s newspapers were looking at a much diminished, if not spent, force. But the Phuket Gazette is not so sure. Events on the political front over the past four years suggest a profound and enduring need to hedge bets on all things that matter here in the Land of Endless Surprises.