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Published: Tuesday February 11, 2014 MYT 8:20:01 PM
Updated: Tuesday February 11, 2014 MYT 8:20:01 PM

Thailand in political limbo with vote re-runs seen in April

Thailand Prime Minister Yingluck Shinawatra (C) arrives at the Royal Thai Air Force headquarters before a cabinet meeting in Bangkok February 11, 2014. REUTERS/Athit Perawongmetha

Thailand Prime Minister Yingluck Shinawatra (C) arrives at the Royal Thai Air Force headquarters before a cabinet meeting in Bangkok February 11, 2014. REUTERS/Athit Perawongmetha

BANGKOK (Reuters) - Thailand's Election Commission said on Tuesday it would try to complete this month's disrupted poll in late April, leaving the country facing another two-and-a-half months in political limbo under a caretaker government with limited powers.

Protesters have been trying since November to oust Prime Minister Yingluck Shinawatra, whom they see as a stand-in for her brother, Thaksin Shinawatra, the self-exiled former premier who clashed with the establishment and was ousted in a 2006 coup.

Yingluck called a general election on February 2 to try to end the demonstrations, but protesters succeeded in disrupting the vote in about a fifth of constituencies, meaning there is not yet a quorum to open parliament and install a new government.

"Voting for constituencies where elections could not take place on February 2 will take place on April 27," Election Commissioner Somchai Srisutthiyakorn told reporters.

The protesters, who are mainly drawn from Bangkok and the south and are backed by the royalist establishment, say former telecoms tycoon Thaksin has commandeered a fragile democracy with populist policies to woo poor voters in rural areas, ensuring victory for his parties in every election since 2001.

The protest group, the People's Democratic Reform Committee (PDRC), wants Yingluck to step aside, with political and electoral reforms drawn up by a "people's council", which they hope would rid Thailand of Thaksin's influence for good.

Members of the group prevented voting in much of the south and in parts of Bangkok, strongholds of the opposition Democratic Party, which boycotted the vote and threw in its lot with the protesters.

GOVERNMENT PARALYSED

Much of normal government business has been paralysed since the protesters took over parts of Bangkok in November, and the drift has been compounded since Yingluck dissolved parliament in December and became head of a caretaker administration.

The authority of a caretaker government to initiate new spending and political programmes is limited, and there is confusion in Bangkok about the constitutional powers of different branches of government.

Highlighting the uncertainty, Election Commissioner Somchai had told Reuters earlier that there were doubts over the legality of restaging voting and the whole election might have to be voided and re-run.

The drift and deadlock has also started to affect spending plans, raising concerns that it could drag on the economy.

The World Bank highlighted worries about delays to much-needed infrastructure policies, although it still sees the economy growing 4 percent this year - a more optimistic reading than Thailand's central bank, which has slashed its growth forecast to 3 percent and warned it could be worse if the protests drag on.

Yingluck's Puea Thai Party is strong in the populous, rural regions of the north and northeast and helped win votes there in the 2011 general election with a subsidy programme that offered farmers a price way above the market for rice.

However, that programme has run into funding problems and hundreds of thousands of farmers have been waiting months for payment from the state. Some are now protesting in Bangkok, although separately from the political demonstrations.

In recent weeks, big banks have refused to extend bridging loans to help fund the programme, unconvinced the government has the authority to seek them, while China has cancelled a government-to-government rice deal due to a corruption probe.

Finance Minister Kittirat Na Ranong said the farmers would get paid but appealed for time to arrange bank financing.

"The government believes it could complete the rice loan in a few days' time," he told reporters ahead of a cabinet meeting. "We need to reassure financial institutions that the rice loan will not breach the law."

Under an interim administration the Election Commission is in charge of approving certain government spending from the central budget.

RICE SCHEME NOT RENEWED

After the cabinet meeting, Commerce Minister Niwatthamrong Bunsongphaisan said the cabinet had approved taking 712 million baht ($22 million) from the state budget to pay some farmers.

"We expect the Election Commission will approve it very soon because it's a problem for farmers," he told reporters.

But commissioner Somchai said the election body does not have the authority to approve budgetary changes that may affect an incoming government, adding that banks dared not lend out money to the government.

"Every single bank is afraid because they know if they lend to the government for its rice scheme they would be violating the constitution," Somchai said. "What worries them even more is that their clients may panic and start withdrawing their savings from the bank."

Some form of rice-support scheme has existed in Thailand for decades, rolled over into successive crops under governments of all leanings. But that may end this month, adding to the anger of farmers.

"We are just a caretaker government, which has no power to extend any policy. The rice-buying scheme will end automatically on February 28," Varathep Rattanakorn, a minister in the prime minister's office, told Reuters.

The rice programme was one of the populist policies associated with Thaksin, who has lived abroad since 2008 to avoid a two-year jail term on a graft conviction he said was politically motivated.

($1 = 32.8150 baht)

(Writing by Alan Raybould and Alex Richardson; Editing by Robert Birsel)

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