Chairman’s Note

Private and Confidential
For SIIA Corporate Members and Advisors
December 2023

Thai Election

I write to you as our corporate member and friend to share some points from a visit I made to Bangkok in November. Some kindly noticed that our May analysis immediately after the election results has been accurate on the subsequent deal-making. On this visit, I considered stability and the ability of the current government led by PM Srettha Thavisin to set an agenda and move ahead.

In the May elections the Move Forward Party, led by Pita Limjaroenrat, emerged as the most popular party and yet was unable to form a ruling coalition. The current ruling coalition therefore excludes them and instead cleaves together the Pheu Thai with a number of military- and pro-establishment parties. For many years, they were the Red-Yellow antagonists. Now Thaksin Shinawatra, who was driven from office by a military coup, is allowed to return from exile and remains the patriarch of the Pheu Thai.

This situation comes at an important time for Thailand, ASEAN’s second-largest economy and a significant link in many global and regional supply chains. The country was hit hard by the pandemic and overall growth numbers and incomes for the lower class of society have not recovered.

In sharing these perspectives, there are three codicils. First, I spoke with only a limited number of observers, none of whom are part of the current government coalition. Second, it is very early in the term of the new PM. Finally, as a think tank, the SIIA will hope to engage representatives of the government in future and will not be commenting publicly presently. Therefore, I ask that this note be as collating views from those I met and treated as confidential.

1. Move Forward Support: The scale of electoral support for the Move Forward must be understood. While the party is associated with younger voters, the support was much wider.  In Bangkok, they won 32 out of 33 seats and this indicates many professionals, urban middle class and even elites support them. Note, too, their growth. In 2019, the Future Forward won about 6.2M votes. Four years on, the Move Forward won, nationwide, more than double that (some 13.5M votes). Much of this is attributed to Pita personally. However, Pita is currently under investigation and suspended as an MP. He has also resigned as party leader and does not control it. The party itself is under pressure from court actions and investigations about its internal discipline.

2. Article 112 and Wider Challenges: The ostensible reason that Move Forward was not supported to form government was their pledge to relook at Article 112 that presently punishes lese majeste criticism of the Royalty. Given Constitutional requirements for Senate votes, this was enough to block the party. But underlying Art. 112, there is a broader challenge to establishment domination in politics, the economy and across society.

3. Stability and Protests: Given past street mass protests by Reds and Yellows, with disruptions and violence, some voice concerns about stability. However, the consensus is that there is a low likelihood of a replay. Despite popular support for the Move Forward, as I suggested before, the guns and tanks are all with the Red-Yellow coalition. There may be flash and social media protests. But most believe that the Move Forward do not have the organisation and funding for more, and this is not their modus operandi. It remains to be seen how they will react should actions proceed against the party and leadership.

4. Coalition or Collaborators: A lack of street protests however does not necessarily mean that the current coalition is gaining acceptance. The Military-backed parties showed scant support and are unlikely to gain popularity. They seem instead to be trying to reap profits from the portfolios they have taken. So too with the BJT. For the Pheu Thai, they were shocked to finish only second. Present surveys show this erosion is compounded by their decision to work with pro-establishment parties. Some believe each party will continue to pursue its own narrow interests; coordination may be poor and with a short-term outlook. In-fighting among coalition parties may also surface if the Pheu Thai try to assert themselves and show up as the pro-military parties.

5. New Policies and Populism: Criticisms about the government are already manifest. The PM has pushed stimulus plans to hand out 10,000 baht per person to 50 million people (aged 16 years and above). This will be funded by borrowing some 500 billion baht (about S$19bn). This is criticised by economists who urge prudence given global financial volatility, as well as those who believe the measure will be ineffective —  too retail and short term (each person gets some S$380 which must be spent within six months). More broadly, this is criticised as an outdated move from the populist playbook. Ruling coalition partners did not support the move.

6. Many Things, No Priority:  Another criticism emerging is that the PM and coalition have announced too many new things without continuity or priority. In infrastructure, for example, the Eastern Economic Corridor was a prime focus in the past years, but there is doubt of real commitment going forward, as details remain pending and Chinese interest is in question. In contrast, the PM has announced a new push for a Southern Land Bridge. Some criticise this as a bad idea on the economics and technology. Beyond specifics, the wider question is government focus and priority-setting. More than one interlocutor uncharitably labelled PM Srettha as “a salesman” who may not last.

7. So Far, So What: There have been no notable achievements for PM Srettha and the ruling coalition so far. This is despite some consensus that the current weak growth needs to be addressed. There are those who recommend reform to promote innovation and a more active and efficient digital economy and push for new value-added projects. But the fear is that the current PM does not have any clear plans. Instead, he may be looking for easy, short term and populist efforts and overly trying to bring back masses of China tourists.

8. Who’s In Charge: Rumors link PM Srettha to former PM Yingluck personally. Almost all I spoke to however stress that Thaksin continues to run Pheu Thai from behind the scenes, directly or through his daughter, Paetongtarn. She is now chairperson for the party and, only 37, most believe it is only a matter of time before she will seek the PMship, with Thaksin’s support. It also remains to be seen how directly Thaksin will involve himself.

The above points gleaned from my brief visit in November do not represent the full or final evaluation of the prospects of the current government and PM Srettha. For the country, there are certainly continuing strengths such as infrastructure, the quality of larger companies, the banking system and financial management by the Central Bank. For the short term, Thailand will continue and can enjoy some stability, without mass street disruptions.

The political arrangements that bring the Red-Yellow coalition together, with BJT, can be seen as a defensive and opportunistic alliance. This is united against the calls for the broad push for change represented by Move Forward but with little else in common. But there are reassurances that Thailand is accustomed to divided politics and crises; Thai society, companies and the establishment have navigated similar situations and indifferent governments before.

I hope these observations might be of some interest to you. If you have a particular interest or perspective to share, I would be glad to hear from you. It is early in the new government’s term, and the situation will no doubt evolve.

Yours sincerely,

Simon Tay
Chairman