By Amy Kazmin in Bangkok
Published: September 3 2008
Samak Sundaravej (pictured), Thailand’s prime minister, was under mounting pressure to resign or dissolve parliament and call fresh elections on Wednesday after the army continued to refuse to act against protesters that have occupied the Government House for the past nine days.
While a threatened strike by state enterprise workers failed to have much impact on public life, Mr Samak was said to be facing intense behind-the-scenes calls from influential elites to step down to defuse the crisis, which threatens seriously to damage the Thai economy.
Parliament is on Thursday expected to adopt a $53bn (£29.8bn, €36.6bn) national budget for the coming year, a move that analysts say could be a prelude to Mr Samak dissolving parliament and calling snap elections.
Mr Samak’s position has weakened considerably since Tuesday morning, when he declared a state of emergency in Bangkok and in effect handed control of the capital to the army. However, the military has adamantly refused to disperse thousands of anti-government demonstrators seeking to unseat Mr Samak for his close ties to Thaksin Shinawatra, the ousted former prime minister.
“The army is not fully behind the government,” said Sriyan Pietersz, head of research at JPMorgan. “They are paying lip service to the emergency but not enforcing the decree. It leaves the government credibility quite badly dented and it doesn’t leave the prime minister with much further recourse.”
Thailand’s English-language newspapers and an array of opinion makers, including academics, union leaders, and businessmen, have urged Mr Samak to step down or call fresh elections, to end his stand-off with the People’s Alliance of Democracy, the coalition that led the protests. The PAD spearheaded the demonstrations in 2006 against Mr Thaksin before a military coup drove him from power.
“Mr Samak must admit he has committed many mistakes during his seven months in office and they are enough for him to call it quits,” the Bangkok Post said in a front page editorial.
Chaturon Chaisang, a former deputy prime minister in Mr Thaksin’s government, said Mr Samak’s departure, or fresh elections, would provide only “instant relief” to Thai society, without resolving the fundamental conflict over how to choose Thai governments.
“The PAD has already made clear that they do not believe in this kind of election – they want ‘new’ politics,” he said. “So there is no point in dissolving the parliament . . . there will still be chaos.”
The political battle is already taking its toll on the economy, which had earlier been showing signs of recovery as consumer confidence rebounded in response to falling oil prices. The central bank said it had been intervening to support the baht, which hit a one-year low on Tuesday after the imposition of emergency rule. Finance ministry officials also said the turmoil was hindering companies’ ability to borrow abroad, as the cost had soared due to increased risk.