With five weeks to a general election, Thailand’s political climate is bad and likely to get worse.
Below the surface of the shocking prime ministerial bid earlier this month by the Thai king’s sister is a swirl of political groupings jostling ahead of March’s crucial poll. Its outcome will either see military rule continue via the country’s parliament, or democracy reassert itself with victory by anti-junta parties.
Investors in Thai assets have long been attuned to political turmoil — share prices took less than a month to recover after protesters lit the stock exchange on fire amid 2010 riots — and this is fortunate because, far from resolving political uncertainty, the March 24 election may trigger fresh upheaval.
The king blocked the brash nomination of Ubolratana Rajakanya Sirivadhana Barnavadi by the anti-junta Thai Raksa Chart party, which now faces a dissolution that would derail the election strategy of Pheu Thai, the leading party in the main opposition alliance.
But it is the pro-military parties that face likely defeat in the poll. FT Confidential Research’s latest survey of 1,000 urban Thai consumers found just 9 per cent of respondents saying they intend to vote for Phalang Pracharat, which has chosen coup leader and current prime minister Prayuth Chan-ocha as its sole premiership candidate, or one of its allied parties. Among respondents 35 or younger, support for the military candidate falls to just 5.2 per cent.
If the pro-junta faction cannot take the lower house, only two fraught paths are likely to remain to keep control of the government. One would be an unstable alliance with the Democrat party, which opposes the junta but also Pheu Thai, the party backed by exiled former prime minister and businessman Thaksin Shinawatra. Pheu Thai won the 2011 election and governed until the May 2014 coup.
Far more controversially, it could use the junta-appointed senate to block the prime minister chosen by the lower house, risking igniting major protest.
Pheu Thai, and affiliates including Thai Raksa Chart, remained the preferred party for 24 per cent of our respondents, slipping only 4 percentage points versus 2011.
Historically the main rival to Thaksin-backed parties, the Democrat party officially opposes the military government but its leadership appears to be split over whether to support Mr Prayuth’s candidacy.
Importantly, the upstart Future Forward Party came out ahead of Phalang Pracharat with 11 per cent of responses, and could tip the scales. The party, whose support is overwhelmingly among younger voters, vociferously opposes the junta and is expected to form a loose alliance with Pheu Thai if this helps block Phalang Pracharat.
Collapse in political sentiment
Our survey also showed a collapse in political sentiment among Thai consumers. A full 60 per cent of respondents rated the political situation negatively, versus just 11 per cent who viewed it positively. The gap is by far the biggest since the inception of this question in 2015.
The forward-looking FTCR Political Sentiment Index slipped back into pessimistic territory at 47.9, meaning that slightly more respondents expect this already negative political climate to worsen in the next six months — when the election will be held — than believe it will improve.
The weak economy is also no help, with many Thais quick to blame the government for the underperformance. Thailand’s political sentiment reading strongly correlates with our economic sentiment gauge, which also fell this quarter.
Thaksin’s royal flush turns royal farce
On February 13, the Election Commission recommended that Thai Raksa Chart be banned for its royal blunder, with a final decision by the Constitutional Court expected soon.
Thai Raksa Chart fielded candidates to get around the military junta’s electoral rules, which are widely seen as damaging to Pheu Thai. The loss of Thai Raksa Chart would narrow Pheu Thai’s path to take the lower house, but it is still running in plenty of races nationwide.
A strong performance by Future Forward at the polls could present another path to an anti-junta coalition government. This looks increasingly possible as the upstart party gains popularity.
A high-level Democrat party source told FTCR that an alliance of convenience between the Democrats and Pheu Thai could also be on the cards.
The 2014 military coup was welcomed inasmuch as it brought a semblance of calm to Thailand after months of anti-government protest. But the junta has overstayed that welcome, and next month’s election risks a return to chaos.
To many in the anti-junta camp, the ban of a pro-Thaksin party would appear politically motivated and could ignite an already flammable post-election scenario — especially when the questionable legality of Mr Prayuth’s own candidacy has been swept under the rug.
Pheu Thai supporters already have grounds to cry foul over a rigged election process. The 2017 constitution, approved by the junta’s rubber-stamp parliament, changed voting rules and constituency boundaries in ways that disadvantage Pheu Thai. More importantly, the junta will appoint the entire 250-member senate, which will now vote alongside the lower house to appoint a prime minister.
Amid the political chaos in the wake of the king’s interdiction, rumours began to fly of another coup, or would it be a counter-coup? These have so far been unsubstantiated, but Thai politics has rarely if ever been more uncertain.
FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and south-east Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors.