beyondbrics

Elections are supposed to solve political conflicts, not exacerbate them.

Thailand’s bitter divisions are about to be tested at the ballot box, but the real fight for power is likely to take place after the vote rather than before it.

As Standard Chartered put it in a recent note:

“A growing number of undecided voters, the risk of political parties disputing results and the previous experience of military involvement in Thai politics have all increased the uncertainty surrounding the upcoming elections.”

Recent polls show Thailand’s two biggest parties, the Democrats of prime minister Abhisit Vejjajiva and the Puea Thai, the vehicle of controversial former prime minister Thaksin Shinwatra, are running neck and neck.

But the key to a successful ballot will be if it is accepted by society in general, and that is far from a foregone conclusion.

There are three likely outcomes:

• The Democrats get the most votes but fall short of an absolute majority: possibly the least contentious result. They’re backed by powerful establishment forces and they’ve shown they can run the economy, but if there is widespread evidence of electoral fraud, or of the army again indulging in arm twisting to try and weld the smaller parties into a coalition, Thaksin’s red-shirted supporters could well take to the streets again.

• Puea Thai win a plurality: the establishment won’t be happy – they launched a coup to get rid of Thaksin in 2006 and they don’t want him coming back from Dubai, where he’s been living in exile. Expect those who hold sway in Bangkok’s barracks, boardrooms and palaces to do their utmost to prevent PT forming a coalition. If scaring off minority parties doesn’t work, then they will resort to court challenges to try and dissolve Puea Thai. It’s worked before –Thai Rak Thai, Thaksin’s original party, was dissolved only to be succeeded by the People Power Party, which won the 2007 elections only to be dissolved in 2008.

• Puea Thai win an absolute majority. Back to the courts again, and if that doesn’t work, well, StanChart quotes Siripan Noksuan, a political scientist at Chulalongkorn University: “if Puea Thai manages to form a government, against all odds, there would likely be a coup.”

A coup – the army’s traditional response to a government it doesn’t like — would be a disaster. The army showed post-2006 that it has little idea how to run the country, and with a Republican-dominated house in Washington and a post-Arab spring deference to democratic forces in allies who would once have been able to get away with authoritarianism, sanctions would not be out of the question, a catastrophe for a country which relies on exports for 65 per cent of its GDP.

But a coup is the worst case scenario and StanChart points that even if there is discontent after the vote, that does not necessarily mean economic meltdown. They point out that the eight-weeks of anti-government demonstrations last year might have killed 91 people and injured over 2,000, but the economy barely missed a beat.

“Despite the worst political turmoil in five decades, Thailand reported strong real economic growth of 7.8 per cent in 2010, in line with the region’s recovery trend. We believe that solid macroeconomic fundamentals and a healthy export performance will continue to help protect the economy from any adverse political impact in the immediate future.”

“We are still confident on growth outlook given the economy’s traditional resilience to political instability,” they say.

It would seem that while politics may be important, a man’s got to earn a living.

Related reading:
Guest post: colour-blind investors still love Thailand’s smile, FT
Thailand’s military: bulking up, beyondbrics
Chart of the week: Asia overheating, beyondbrics