Analysis: Thai PM-elect survives "noodlegate" but threats loom

Reuters News
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Posted: Jul 14, 2011 3:13 AM
Analysis: Thai PM-elect survives "noodlegate" but threats loom

By Martin Petty

BANGKOK (Reuters) - Call it "noodlegate." As cameras clicked, Prime Minister-elect Yingluck Shinawatra, sleeves rolled up, stirred a dish of spicy noodles at a market, surrounded by hungry voters ahead of a crucial election.

The event, designed to burnish the 44-year-old businesswoman's folksy appeal, landed her in trouble. After her party won Thailand's July 3 election by a landslide, her rivals cried foul, accusing her of breaking laws that forbid the handing out of gifts or, in her case, noodles.

Two weeks after leading her Puea Thai Party to victory, the political honeymoon is over for Thailand's first female prime minister-elect.

The political novice is under pressure to come good on a trove of big-spending campaign promises and appease supporters of her controversial brother, self-exiled former prime minister Thaksin Shinawatra, without damaging the economy or giving her brother's enemies a pretext to challenge her.

"Pressure is set to build for Yingluck in the short term," said Brittany Damora, a Singapore-based risk consultant at security firm AKE Ltd.

She survived "noodlegate" -- the case was thrown out after Thailand's election watchdog ruled on Tuesday she only cooked the noodles and didn't serve them. But she faces a bigger challenge over a potentially destabilizing probe into whether her party broke election laws.

Thailand's election watchdog has yet to certify Yingluck's victory and a battery of legal threats has raised the question of whether the election results will be reversed -- a scenario that could draw thousands of her supporters onto the streets in a new wave of unrest.

As she fights fires on multiple fronts, she is also struggling to shed the widely held belief that she is a proxy for Thaksin, a billionaire at the center of Thailand's intractable political crisis -- loved by millions of rural and urban poor but loathed by many middle-class Thais, powerful generals and royalist conservatives.

Yingluck's Puea Thai Party campaigned heavily on the twice-elected Thaksin's name and his populist policies. While these helped to win over the rural masses, they could also undo her.

The governing Democrat Party, which lost the election and is allied with the elite in Bangkok and the military, has lodged a legal complaint calling for Puea Thai's dissolution for allegedly allowing banned politicians to direct its campaign, including Thaksin.

As evidence, they cite one of Puea Thai's campaign slogans, "Thaksin thinks, Puea Thai acts."

The staunchly anti-Thaksin People's Alliance for Democracy (PAD) has filed a separate complaint, seeking to void the election on grounds that two million Thais were not able to vote. The Supreme Court will rule on that case on Wednesday.

A PAD-linked group has also pressed state investigators to probe Yingluck for alleged perjury in testimony she gave during an assets concealment case involving Thaksin three years ago. Yingluck last week told Reuters she stood by her testimony.

Andrew Walker, a Thailand specialist at the Australia National University, said she must tread carefully but attempts to topple her would put the country on a "dangerous path."

"The forces aligned against her face an uphill battle," he said. "There is no way that they can credibly claim that this election result does not reelect the will of Thai voters.

BIG MANDATE

The clear-cut win for Puea Thai -- 265 of the 500 house seats or 300 when including its five coalition partners -- allayed fears of instability after the election.

The Thai stock market raced to a seven-week high on July 5. But the enthusiasm has been difficult to sustain. Stocks have lost a percent since then on a combination of weakness on Wall Street and uncertainty surrounding Yingluck.

If her fate is left to Thailand's courts, history is not on her side: courts have dissolved two pro-Thaksin ruling parties.

Thailand's Constitution, drafted by a committee hand-picked by the military after Thaksin was toppled in a 2006 coup, includes provisions that make political parties vulnerable to legal charges. Thaksin's supporters, particularly a red-shirt political movement, claim the courts are politically biased.

The Election Commission approved 358 of the 500 winning candidates during a marathon meeting on Tuesday but held back on endorsing the rest, including Yingluck and outgoing Prime Minister Abhisit Vejjajiva over complaints of vote-buying.

The EC traditionally does not immediately endorse those with complaints against them, but it has never suspended top party-list candidates such as Yingluck.

If Yingluck remains unendorsed by next week, her supporters may start to voice accusations of a "judicial coup" against her, renewing uncertainties over Thailand's political outlook and the prospect of renewed unrest, although the EC could simply defer endorsement for another week.

POPULIST CHALLENGES

Yingluck is also under pressure to explain plans for a raft of populist policies critics say could accelerate inflation and increase debt. She told Reuters on July 8 she would not stubbornly pursue those that don't work, but questions linger.

UBS economist Edward Teather in Singapore said Puea Thai would probably take a cautious approach to avoid any fallout that would provide ammunition to her opponents.

"Those wanting to take Puea Thai down will realize the risks of moving too early, so they're more likely to wait until mistakes are made," he said.

"If they push too hard at the start and upset the capitalists to much, that could present a problem, so they're likely to take more of a middle path."

Reporters have also bombarded her with questions about a mooted amnesty that would clear Thaksin of conflict of interest charges he says were politically motivated. Thaksin fled Thailand in 2008 days before he was sentenced to two years in jail. His rivals say he must serve time if he wants to return.

She insists she will operate independently, but that notion, too, is being undermined by her brother.

Thai media recently reported on a meeting in Brunei between Thaksin and Banharn Silpa-archa, another banned politician who is the de facto leader of Chart Thai Pattana, a party in Yingluck's coalition. The two were widely assumed to have discussed cabinet portfolios, although this was denied.

To keep her brother's enemies at bay, she is expected to steer clear of the amnesty issue for some time, possibly a year.

Moving any faster risks re-igniting protests that helped to bring down pro-Thaksin ruling parties in 2006 and 2008. The royalist military did little to stop those rallies.

Yingluck could decide to strike first and purge the top brass of the military, but that risks a coup against her government. Any putsch would likely trigger a backlash by Thaksin's red-shirt supporters, who battles in Bangkok with the army last year resulting in 91 deaths.

(Editing by Jason Szep and Miral Fahmy)