Analysis: Thammanat’s withdrawal leaves Prayut between a rock and a hard place

Prayut Chan-ocha’s position as prime minister seems more precarious and difficult as ever after news emerged late Wednesday that controversial and influential ex-minister Thammanat Prompao would be leaving the ruling party.

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The former coup-leader and army chief could see as many as 22 MPs leave the ruling coalition to join Thammanat’s new party and jeopardize his plans for economic recovery and his agenda for post-pandemic growth.

According to sources inside the ruling Palang Pracharath Party, Thammanat took exception after being blamed for two by-election losses in the south last Sunday.

Those seats went to fellow coalition partner the Democrat Party despite heavy campaigning and spending by the PPRP.

The losses in the 2 constituencies was not a surprise given the Democrat’s longtime presence in the area and their record in the south. Although detractors of Thammanat inside the PPRP, and there are many, took the opportunity to stab a knife in the back of the former drug dealer.

Thammanat, not one to take things on the nose and not respond, said he would be moving out, likely to a party called Sethakij Thai (Thai Economy).

Net Negative for the Economy

The news is likely to have a negative impact on the economy and could derail the fragile economic recovery progress. Businesses are already on a knife edge given the impact of the pandemic and poor economic policies from the government, further instability could halt it altogether.

“This is not good news for the country as many things will be derailed, especially the economic recovery that everyone was hoping for,” a regional economist at a major bank told Thai Enquirer.

The economist pointed to the 3.4% GDP growth projected by the Bank of Thailand (BoT) and said that with this development the earlier projections would need to be revised.

Citing the fact that any instability in the government always leads to lower fiscal spending and disbursement, the impact on the overall gross domestic product (GDP) could be in the range of 15-20% of the projections.

“All I can say at the moment is that this is net negative news for the country,” the economist said.

A look at the past would show that the civil servants have shied away from disbursement and spending once the government becomes incapable of handling the situation.

The government of Prayut prior to the 2019 elections and the government of Yingluck Shinawatra, up until the 2014 coup, are good examples of how the public spending had dwindled due to political uncertainty.

Prawit still in charge

The decision by Thammanat to resign from the PPRP does not mean that he has pulled out of the coalition altogether.

“The fact that Thammanat is out of the PPRP does not mean that he has withdrawn from the government,” a senior political insider told Thai Enquirer.

“This means that Prayut is still the Prime Minister but a handicapped one because he cannot go very far in pushing his legislative agenda,” he said.

Though the 22 MPs (including Thammanat) have broken away from the PPRP, it is understood by Thai Enquirer that Deputy Prime Minister Prawit Wongsuwan still wields influence over both the MPs and Thammanat.

“This is a clear indication that Thammanat has broken away from Prayut but is still aligned with Prawit and the alliance between Prawit and Prayut is still an ongoing one,” the source said.

Bad Timing for Instability

The main problem facing Prayut is that he can’t dissolve the house because his popularity rating has suffered greatly over the last two years.

His government has performed poorly on the economy, the vaccine procurement, the lock downs and their implementation, and even the rise of commodity prices over the last two months.

A general election now could spell disaster for those currently in power.

One need not look any further than the government’s track record on the economy to see how poor of a showing they’ve had. Prayut has changed more Finance Ministers in the past 7-years than any other Prime Ministers in the history of Thailand. From Sommai Phasee to Apisak  Tantivorawong to Uttama Savanayana to Arkhom Termpittayapaisith to Pridi Daochai and then back to Arkhom Termpittayapaisith, there is no longevity or strategy to the prime minister’s schemes.

The case of the vaccine procurement is also well documented with the Prayut administration betting on a single horse – AstraZeneca, given to the unproven Siam Bioscience and that almost backfired disastrously.

At almost every given turn, the poorest and least privileged in Thai society suffered the most during the pandemic. Prayut knows this and even if he cannot pass legislation, he knows he also cannot call an election right away.

Photo courtesy of Thai News Pix


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