Do Protests And Coups In Thailand Matter?


Do Protests And Coups In Thailand Matter?

Forbes Asia |12/11/2013 @ 11:24

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Jon Springer

Jon Springer, Contributor  

I have been published in the UB Post and a frequent contributor to Seeking Alpha in the past. Frontier and emerging markets research and writing is my work, with a focus on Asian economies. I have chaired and moderated conferences related to emerging markets and economies in Asia. I keep in touch with a network of people investing in the places where capital markets are between the early and nascent stages of development. I studied political philosophy at the London School of Economics. I worked in trust banking prior to managing my own family office since 1999. I bring an interest to the history and stories of the people and places I write about, and want my readers know what it is like to be there without visiting. I write about wealth, stock exchanges, real estate, private equity, venture capital and cultural issues in the countries that I cover.

The author is a Forbes contributor. The opinions expressed are those of the writer.

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To the outside world, the current protests in Thailand are large demonstrations of people protesting actions of a recently dissolved majority government. This past weekend, the minority party in the government joined the protestors as they walked out of parliament. Consider Thailand is a country that has had an estimated twenty Coup D’état attempts in the last 101 years with a debatable scorecard estimating 11 successful coups and 9 failed coups. Since 2005, protest movements and political crises similar to the recent one have come and gone with fluid regularity while the party in power after each new election has remained the same. Up close, there are different questions than merely examining one month of protesting in a vacuum to understand the relative economic stability and political instability of Thailand.

From an investment stand point, these types of protests have happened before and will happen again. They tend to create news outside the country that distorts investments in Thailand long enough to create opportune times to invest. A popular saying around the Stock Exchange of Thailand is “buy on coup, sell into election.” After speaking with professional investors who have lived and invested in Thailand for about 100 years combined, these beliefs unify them as much as their belief that Thailand is still an excellent place to both live and conduct business.

The functions of the economy are largely unaffected by these political actions, although there is an impact on investment psychology which needs to be monitored for such events as the 1997 collapse of the Thai Baht. Local businessmen explain that both the Pheu Thai Party that has ruled under Prime Minister Yingluck Shinawatra and the opposition Democrat Party are both consistently pro-business and pro-tourism. Posturing between parties and political actions of citizens has minimal impact on the day-to-day business climate. As for tourism, while it experiences blips from these political movements, “tourism’s resiliency is strong, the tourists always come back.”

According to early reports from the New York Times, an estimated 152 Democrat Party members were to resign from parliament this past Monday. This led Prime Minister Yingluck Shinawatra to dissolve parliament in favor of new elections, despite there still being 340 members of parliament ostensibly willing to serve. Reports on the estimated number of protesters in the street following the Democrat Party resignations on Monday ranged from tens of thousands in some local media outlets to “between 100,000 and 150,000” according to CNN to “at least a quarter of a million people” according to two businessmen interviewed for this article.

A third witness who was meeting in a building above one of the 9 columns of protesters recounts that people were marching by 20 abreast at a leisurely pace for 45 minutes. This eyewitness had to go to the airport in the midst of Monday’s protests. The fact that everyone marching seemed peaceful and had whistles stood out to him. On the peaceful side, there was not the slightest hint that violence was  possible. As for the whistles, leaders of the protest would chant, and those marching – “housewives, professionals, students, workers, children” – would respond to the chants by blowing whistles. “Can you imagine 10,000 plus whistles all blowing at once?”

Dissolve Or Ban, Shinawatras Cannot Lose

Ms. Shinawatra’s heretofore ruling Pheu Thai party, and its earlier iterations as the Thai Rak Thai party and the People’s Power Party have won every election since 2001 despite being removed by way of coup in 2006. Duncan McCargo, Professor of Southeast Asian Politics at the University of Leeds, U.K., noted in a paper on the events leading up to the Thai Rak Thai party dissolution in May 2007:

Charges were brought against both TRT and the Democrats for alleged irregularities relating to an abortive general election held in April 2006, which had later been invalidated by the courts. A specially appointed Constitutional Tribunal (not to be confused with the Constitutional Court, which had operated under the 1997 Constitution) eventually decided to dissolve TRT and to ban all 111 members of the party executive from holding political office for the next five years.Not only was Thaksin himself now ineligible to run for election, but so was virtually everyone who had served as a minister in his governments. To the casual observer, TRT had been decapitated.

The People’s Power Party to which the former Thai Rak Party members flowed along with their supporters after the 2007 ban were subsequently dissolved by Thailand’s Constitutional Court in December 2008.

Prime Minister Yingluck Shinawatra’s brother, Mr. Thaksin Shinawatra was prime minister of Thailand from 2001 to 2006 when the first Shinawatra party, the Thai Rak Thai party was dissolved. A number of legal charges were leveled at Mr. Shinawatra after the September 2006 coup against his regime while he was at the United Nations in New York City. On the last day of 2006, Mr. Shinawatra’s diplomatic passport was revoked while he was still outside the country. This confirmed his exile that had already begun in London. At present he resides in Dubai. Among his accomplishments as an elected official were overwhelming victories in the elections of 2001 and 2005. While prime minister, Mr. Shinawatra and his family members negotiated selling their holdings in Shin Corporation to Singapore’s Temasek for an estimated $1.88 billion in January 2006.  This was seen as a conflict of interest and was one of several events that led to the protests and legal actions against Mr. Shinawatra that in turn led to his life in exile.

The recent protests began when Ms. Yingluck Shinawatra’s government proposed a blanket amnesty bill for prior political crimes that was viewed by some as potentially granting full amnesty to her brother, Mr. Shinawatra.

Interventions: Royal, Privy, Judicial And Military

Historically, when there are protests such as there are currently, eventually one or more Thai institutions will step in to resolve the situation. Thailand’s King Bhumibol ascended the throne more than 67 years ago and is the world’s longest reigning head of state currently. The rule of lèse majesté has been in strict force since 1908 and in every constitution since 1932. At age 86, no king has reigned over Thailand longer than King Bhumibol and he has had a noble and spiritual reign meritoriously revered by Thais of all political persuasions. Most famously in 1992, after a military coup and subsequent protests against the military, King Bhumibol spoke on national television with the leaders of the two sides kneeling before him. Thereafter, both kneeling leaders receded from their activities and order was restored.

The military itself has been relied upon to intervene when needed. When political imbalances go too far, the military has intervened often – though not always – with the blessings and thanks of the Thai populace according to multiple sources. One source said “when the coup in 1992 happened, people celebrated; when the coup in 2006 came, people widely accepted it.”

The Privy Council is a special Thai entity of power.  This council that is appointed by Thailand’s king has 18 members. The membership may be politicians, military leaders, businessmen, clergy, judiciary and other society members of stature. The Privy Council’s intent is to serve both king and country, and appointments are for life unless removed by Royal Command.

Both Constitutional Tribunal and Constitutional Court have intervened in politics in recent years, particularly in the case of Mr. Shinawatra. There have also been seventeen iterations of Charters and Constitutions of Thailand since 1932.

At issue with the current protests is that a new round of elections seems highly unlikely to change the political make-up of Thailand which has been consistently dominated in the most recent parliamentary elections by Shinawatra backed political parties. Thus, it is unclear what is to be gained and changed by the dissolution of the current government. The primary victory would seem to be the failure of the proposed amnesty bill. If this victory is insufficient, the way forward toward political resolution is less clear, and may require an intervention by some group beyond the two principal political parties.


Red shirts are supporters of the various iterations of the Shinawatra parties. The party typically draws support from people living in the rural north and northeastern provinces of Thailand, the urban classes of Bangkok, and some intellectuals and business leaders.

Yellow shirts are largely against the Shinawatra parties and often, but not always, members of the Democrat Party. The yellow shirts typically draw support from the southern provinces of Thailand and many of Thailand’s wealthy and upper-middle-class members of Bangkok society.

Both red shirts and yellow shirts are loyal supporters of King Bhumibol, and on this one view they are united.

A few decades ago, most of Thailand’s political parties were smaller and more regional. In those times, members of different parties had disagreements but still were able to be amicable. A local commentator believes now that the country is at a midpoint in a transition from the days of having many regional parties to “10 years down the road Thailand may be like Malaysia with 2 or 3 national parties.”

Stability Or Not?

There are interpretations of current events that are negative, positive and indifferent. The negative outlook sees Thailand returning to the start of a political cycle with nothing changed. This view is concerned by the Shinawatras’ economic and electoral power and sees a spiraling cycle with the same election results each time, governments that go a little too far, protests against going too far, and new elections with the same results. The negative outlook believes there’s an outside chance this repeated cycle itself could go too far at some point and result in a civil war.

People with a positive outlook believe Thailand is going through democratic growing pains typical of the region. They believe that Thailand’s major parties are nationalizing and Thailand’s democracy is maturing toward a growth spurt. This view sees Thais as people willing to keep revising the roots of their democratic system until it is Thai and right.

That said, from an investment point of view there is little impact on the outlook for the investment climate though the political climate merits monitoring.


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