Thailand protests and the economy

Here’s a story in today’s WSJ: “Thai Protests Build on Economic Crisis

BANGKOK — Tens of thousands of antigovernment protesters sang and danced through the weekend outside Thailand’s main government complex, cheering on ousted former premier Thaksin Shinawatra and offering the nation’s new leaders — and others in Asia — a jarring reminder of the political risks accompanying the region’s sharp economic decline.

Local businesswoman Darunee Kritboonyalai, a founding shareholder of a Thai iced-tea brand and an active supporter of Mr. Thaksin, said the protests against Thailand’s government could grow as the economy worsens. “We’re just part of a global situation, true. But this government doesn’t know how to handle it properly,” she said.

The protesters are mainly seeking to restore Mr. Thaksin — a multimillionaire businessman who was removed from office in a military coup nearly three years ago — to power. They object to the way Prime Minister Abhisit Vejjajiva came to power and are disenchanted with how he is handling the country’s economic downturn, and so are hoping to fuel wider discontent.

Many of the 30,000-strong crowd mocked the government’s latest stimulus efforts as, at best, an imitation of policies Mr. Thaksin championed before he was ousted in 2006. Some protesters handed 2,000 baht ($56) cash handouts from the government to rally organizers instead of spending them in Bangkok’s stores, as the government intended. One elderly woman, Ananya Mhanpadungkit, climbed onto a makeshift stage to say she couldn’t accept money from what she described as an “illegitimate” government. Protest leaders said they would continue their nighttime rallies indefinitely.

Thailand’s lingering conflict between Mr. Thaksin’s populist supporters and its more conservative, military-backed government shows how the world’s economic slump is complicating a series of political battles across Southeast Asia. The region is especially dependent on trade, providing electronic components, raw materials and skilled labor for the global supply chain, and several countries are feeling the strain.

There’s also insight into how economic woes in Malaysia and the Philippines are affecting politics there.


More on Thailand’s political future

WSJ: “New Thai Prime Minister Faces Immediate Hurdles

Ousted premier Thaksin Shinawatra’s grip on Thai politics — and the instability it provoked — eased on Monday with parliament’s election of a new prime minister from a rival party.

The rise of 44-year-old Abhisit Vejjajiva, the Oxford-educated leader of the Democrat Party, could bring some calm after months of sometimes-violent protests that have undermined one of Southeast Asia’s linchpin economies.

But Mr. Abhisit faces significant political and economic hurdles. His new ruling coalition’s slim majority depends on the support of defectors he lured from Mr. Thaksin’s camp, which still controls the single largest party in parliament. Grass-roots support for Mr. Thaksin and his populist policies runs deep in rural Thailand, and Mr. Abhisit’s election was greeted by public protests by Thaksin supporters.

Mr. Abhisit will also have to deal with the effects of the global economic slowdown on Thailand, which some economists predict could slip into recession next year.

And another snip:

Political risk is likely to remain a watchword for Thailand in the coming months. Mr. Abhisit’s narrow margin of victory in Monday’s parliamentary vote — he defeated pro-Thaksin rival Pracha Promnok by 235 votes to 198 — could make it tough for him to act decisively on the economy, or even to defend his legislative majority. Thailand’s next national election must be held by 2011.

There’s also an interactive graphic that charts Thailand’s GDP growth rate and the country’s political unrest.


Politics in Thailand: battle for the parliament

WSJ: “Rival Thai Parties Vie to Form Government

Thailand’s rival political parties are racing to form the country’s next government this week, with the opposition Democrat Party claiming it has won the support of enough legislators to form a ruling coalition — a move its leaders say could ease the political turmoil that has mounted in recent months.

In an interview with The Wall Street Journal, Democrat Party leader Abhisit Vejjajiva said Saturday his party had won the support of as many as 250 members of parliament, more than the 224 seats required to have a majority in the Thai legislature. Party spokesman Buranaj Smutharaks said Sunday the Democrats had recruited 260 lawmakers for a new coalition.

If the Democrats succeed in creating and maintaining a new coalition with a majority of seats, 44-year-old Mr. Abhisit is likely to be chosen as Thailand’s next prime minister.

However, it’s not certain Mr. Abhisit and the Democrats can deliver this majority. Followers of former Prime Minister Thaksin Shinawatra also are trying to form a government, reigniting a battle for control of Thailand, one of Southeast Asia’s largest economies and major production hub for multinationals such as Toyota Motor Co. and Ford Motor Co.

AP: “Thai opposition may take power, army’s aid hinted

Thailand’s main opposition party called for an emergency parliament session Monday to prove its majority and form the next government — a surprising reversal of fortunes that some suggested was engineered by the politically potent military.

Democrat Party Secretary-General Suthep Thuagsuban filed a formal request for convening Parliament to demonstrate it has the support of enough legislators to form the next government and end months of political paralysis.

This Southeast Asian nation has been gripped by political chaos for three months, with protesters seizing the prime minister’s office and overrunning the capital’s two airports for about a week in a bid to topple the government, accusing it of being a proxy of fugitive former Prime Minister Thaksin Shinawatra.


Understanding the Subprime Crisis

A few days back, I asked some of my Twitter friends to share some good resources for understanding the subprime crisis and global credit crunch.

  • Wise Kwai suggested The Subprime Primer, a 45-slide presentation using (profanity-spewing) stick figures to illustrate the meltdown. I suggest giving it a read (but be mindful that it’s — obviously — simplified).

    Understanding the subcprime crisis

  • Jay Dedman recommended the helpful This American Life episode called The Giant Pool of Money, which I’ve mentioned before. It remains an excellent resource, and one that I plan to listen to again.**

    Here are some other links that have caught my eye:

  • “Everything you need to know about the global money crisis of 2007-?.”
  • WSJ: Yes, Dow’s Record Was Year Ago Today, which contains this illustrative infographic. (Click the image for a larger version, or go to the article.)

    WSJ Infographic

  • I’ve read Zimran Ahmed’s blog, Winterspeak, since 2001, and he’s been posting some interesting thoughts on the credit crisis. Here was his take on things last week:

    My prediction: deflation will continue through 2008 and 2009. The economy will continue to contract as consumers reduce consumption (and increase saving, which they must do) and businesses scale back operations so they fit the new, lower personal consumption environment. This will be a slow process, though, as the Fed and Treasury have worked mightily to obfuscate prices, and drag out the bubble deflation. Eventually, Helicopter Ben will say enough is enough and start to (finally) mail freshly printed greenbacks to households. Now we will switch from a deflationary environment to an inflationary environment, China will complete it’s transition out of the dollar, and we will get real, honest-to-God 70s style stagflation. And then we will wait for the next Volker.

    I suggest reading the whole post.

  • is a good source for ongoing news. Thanks to Lan Anh N. for the tip.
  • The New Yorker‘s James Surowiecki has a piece called “Public Humiliation,” in which he concludes:

    Considering that Wall Street firms spend all day dealing with the market, they have been slow to understand just how vulnerable they were to it. Companies like Lehman and, earlier, Bear Stearns saw going public as an excuse to take on more risk and act more recklessly, when in fact becoming a public company makes caution more important, since the margin for error is smaller, and the punishment for failure swifter. Now that the government has acted, Wall Street (or what remains of it) may yet be able to regain investors’ confidence. But long-term survival really depends on remembering the fundamental truth about playing with other people’s money: it’s a lot of fun until they suddenly decide to ask for it back.

    (Emphasis mine.)

    **And on a related note, thanks to reader Paul D. for pointing out a NY Times article providing the backstory on how “The Giant Pool of Money” came to be.

    –> What about you? Got some good links to share? Leave them in the comments or email me (newley AT