Thaksin-Linked Thai Party Plans New Bloc to Form Government

Patpicha Tanakasempipat
·3 min read
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(Bloomberg) -- Pheu Thai, a party linked to former premier Thaksin Shinawatra, said it will form a new coalition with possible backing of conservative parties to end a political stalemate that has gripped the country since the May election.

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It will seek to form a government without Move Forward — the party that won the most seats on May 14 — after disbanding an eight-party, pro-democracy alliance under Pita Limjaroenrat, Pheu Thai’s leader Cholnan Srikaew told a briefing on Wednesday. The new Pheu Thai-led coalition will nominate property tycoon Srettha Thavisin for the prime minister’s post, he said.

Pheu Thai is pursuing a new alliance after Thailand’s military-appointed Senate and conservative parties rejected the coalition that included Move Forward. Pita’s bid to secure parliamentary endorsement was twice blocked by pro-establishment lawmakers opposed to his party’s pledge to amend the royal insult law, or Article 112 of the criminal code.

To pacify the conservatives, Pheu Thai pledged to leave the law protecting the royals unchanged, while promising to overhaul the military-drafted constitution to usher in democratic reforms.

“This is the way to preserve the nation’s key institution as the spiritual heart of all Thais, and to push for what the people wanted,” Cholnan said.

Investors reacted to Pheu Thai’s announcement with cautious optimism that saw stocks rallying briefly before ending lower while the baht trimmed its losses. “Most investors are still very cautious about political uncertainty until the PM vote result is clear,” said Rakpong Chaisuparakul, an analyst at KGI Securities Pcl.

Angry pro-democracy activists gathered outside Pheu Thai’s headquarters in Bangkok, with some protesters spraying red paint across the building’s entrance, burning effigies and shouting the party has “betrayed the people.”

Pheu Thai will announce the make-up of its coalition on Thursday, Cholnan said, declining to confirm whether the new bloc will include the military-backed United Thai Nation or Palang Pracharath. Bhumjaithai’s Anutin Charnvirakul said he hasn’t talked to Pheu Thai recently and the party will decide on the prime minister vote when it has more information.

Also on Thursday, the Constitutional Court will decide if it needs to scrutinize a parliament move to deny Pita a second shot at the top job. Should it reject a petition by the nation’s Ombudsman, the parliament can proceed with a fresh vote for prime minister on Aug. 4

If Pheu Thai succeeds in getting Srettha elected as prime minister, the first cabinet meeting will approve holding a referendum for overhauling the nation’s constitution and initiate steps to set up a charter-drafting panel, Cholnan said.

Once the new constitution is in place, a fresh election will be called, he said, adding the current structure of the charter was the reason for difficulties in a quick government formation.

It will also push policies such as rights to equal marriage, steps to ease monopoly in liquor industry and other businesses, ending mandatory conscription, reform of bureaucracy and decentralization of budgets, the Pheu Thai leader said. Many of these plans are similar to the ones that the Move Forward coalition espoused.

Move Forward, which won 151 seats of the 500-member House of Representatives, will decide on Thursday whether to support Pheu Thai’s Srettha for prime minister, the party’s Secretary-General Chaithawat Tulathon said at a briefing late Wednesday.

“What happened reflects how twisted Thai politics is,” Chaithawat said. “The problem with it is that the highest power of the country doesn’t rest with the people.”

--With assistance from Anuchit Nguyen and Pathom Sangwongwanich.

(Updates with details throughout.)

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