Shinawatras Reassert Hold Over Thailand’s Pheu Thai Party

But face trouble getting economic program going

The elevation on October 27 of Paetongtarn Shinawatra, 37, the daughter of recently returned telecoms billionaire Thaksin Shinawatra, to head Thailand’s Pheu Thai Party, is both an indication of the family’s ownership of the party and concern that its ambitious economic agenda to get the country moving again has been stalled by the military and the elites. The party’s previous leader, Chonlanan Srikaew, had thrown himself on his sword earlier for agreeing to form a government with military-aligned parties, which in fact was the only way Pheu Thai could come to power.

Although the newly-installed government, led in parliament by real estate magnate Srettha Thavasin, laid out its plans in a formal 58-page Policy Statement to the parliament on September 11, the program appears to be stalled by old guard forces. Its principal feature was the introduction of a Bt10,000 (US$276.60) initiative to distribute digital money to every Thai citizen aged 16 years and older, to be spent within six months and within four kilometers of their registered residence. The proposal, a key Pheu Thai campaign plank, stalled immediately when parliament reconvened on August 23 after a divisive three-month squabble that saw the Move Forward Party, which won the most seats in the May 14 general election, relegated to the opposition. The old guard is said to have served notice to Pheu Thai that it will not have a free hand in running the country by parliamentary or other means, such as asking a counter-corruption commission to oversee government performance.

It is thus questionable where Paetongtarn can take the party, even acting as her 74-year-old father’s ventriloquist dummy. Pheu Thai, which won 141 seats to Move Forward’s 151, was forced to cobble together an unwieldy 11-party coalition including Palang Pracharat and United Thai Nation, both linked to former junta leader Prayuth Chan-ocha, who was decisively ousted from power in the May polls. The Thai elites and the military, which have never been far from power even in sporadic periods of apparent democracy, have since stymied efforts by Srettha to move the economic program forward. The elites rounded up 99 tame economists to object to the digital wallet plan although its advocates have argued that in principle it resembles the strikingly successful tactics of the Biden administration and Federal Reserve in the United States in the wake of the Covid-19 coronavirus crisis by flooding the economy with cash grants.

Thaksin, who returned to Thailand from 15 years of self-exile in the face of corruption charges, surrendered on landing to face an eight-year prison sentence, which was almost immediately reduced to a single year in a pact obviously arranged before he left his Dubai perch. He immediately reported to a hospital, said to be suffering from high blood pressure and other ailments.

Given the makeup of the coalition backing Pheu Thai, Thaksin’s earlier dominance of parliament has faded from the time when as prime minister from 2001 to the October 2006 military coup that ended it, he delivered a flurry of populist economic moves that endeared him to the poor of the country’s vast sizeable northeast region and created a formidable vote bank that remains in place two decades later.

“Pheu Thai at the helm is not having its own way as it has to depend on its coalition partners, especially those from the former coalition such as Bhumjai Thai, Palang Pacharat, and Ruam Thai Sangchat, are standing in the way,” said a Thaksin backer by email. “Besides implementing a Bt20 metro fare, the government is still trying to implement its campaign promises, chief among them the money wallet, which needs the cooperation of the bureaucrats and the business and financial sectors.”

That cooperation is not forthcoming, he said, because the business and finance sectors which comprised a major segment of the previous military-backed government despite their current alignment with Pheu Thai, want to steer any major reflation funds to themselves and not to measures intended to reawaken the populist masses who adored Thaksin, whatever his alleged corruption practices.

“We can see that the bureaucrats are throwing a spanner in the works by setting up committees, sub-committees, workshops, etc. to stymie the project," he said. “The business sector who are allied with the old guard want the money to be distributed only to certain segments of society and the rest to be used for stimulating other parts of the economy. “

Srettha’s government has had to surrender grade A ministries such as Interior, Agriculture, and Education to its coalition partners while keeping the Ministry of Finance as a way to control them. Pheu Thai’s stewardship of the defense portfolio is in name only, given that its organizational structure and the army dominance make it immune to political influence.

That leaves the once-dominant Move Forward, whose charismatic leader Pita Limjaroenrat has resigned and faces charges of election violations largely regarded as trumped-up, out in the cold.

“Thailand has settled into a de facto government of national unity in which the glue in the coalition was all about keeping Move Forward out of power, said Phil Robertson, the Bangkok-based Deputy Director of Human Rights Watch's Asia Division. “It doesn't seem to bother the ministers that performing the feat required the services of an undemocratic, military-appointed Senate established by a rights-abusing 2017 Constitution drafted by minions of the NCPO coup makers. When the various political parties who have taken over different ministries descend into their more common warring states mode is an open question, there is already a lot of sniping at core Pheu Thai Party policies, like the so-called 10,000 baht wallet scheme."

As politics have stagnated, the need to get the economy moving is growing critical after a decade and a half of mismanagement and lack of initiative by the military and the vested interests backing protected sectors. Once one of the most dynamic in the region, it was built on Southeast Asia’s most alluring tourism attractions, cannily developed, and a massive car and electronics assembly industries sector for export, with manufacturing comprising 35 percent of GDP. The World Bank upgraded Thailand to "upper-middle-income" status in 2011 only to have it fall back on an aging population, a low birth rate, a long-substandard, stultified education system, rigid economic stratification, and low yield agriculture although Thai rice remains a world standard for quality. Thailand looks trapped between a younger, dynamic Vietnam and larger Indonesia, both of which have begun to soar economically.

In addition to the Bt10,000 scheme, the policy paper outlined an ambitious plan including addressing agricultural and business sector debt, seeking to reduce energy costs by supporting electricity, liquefied petroleum gas and gasoline prices, promoting the production and use of renewable energy, accelerating negotiations with neighboring countries on the development of overlapping energy resources, promoting additional income generation from tourism, spending to improve land, water and air transport infrastructure and other programs.

Finally, the policy document promised to ”resolve differences of opinion regarding the constitution of the kingdom of Thailand, a rewrite of the 2019 constitution that guaranteed the military-political dominance in perpetuity – until public disgust became so overwhelming that the voters turfed them out last May. The constitution still gives them a lock on the Senate, but that too is supposed to change in the next election, possibly giving the chance for a resurgent Move Forward to, well, move forward.

But, said Human Rights Watch’s Robertson, “Now there are games being played about establishing this or that committee or subcommittee to reform the Constitution a year or two from now, but there's no clarity or program on what, if anything, would be changed. Human rights policies have been put on the back burner, or worse, buried in the backyard as Pheu Thai seems to be bending over backwards to avoid offending the military establishment. And looming in the near future is a likely politically motivated, forced dissolution of Move Forward by a constitutional court that time and time again has shown itself willing to do the conservative establishment's dirty work. So foreign investors, and trade partners, like the EU, which is kicking off negotiations with Thailand on a Free Trade Agreement, better hold on their hats because the political turbulence is just getting started."