Thailand’s army chief took control of the country and suspended the constitution after a six-month crisis that has sapped economic growth and caused political paralysis, staging the military’s 12th coup since 1932.
Two days after declaring martial law and saying there was no coup, Army Chief Prayuth Chan-Ocha announced on national television alongside senior military officials yesterday that he was seizing control to restore peace. He announced a daily nationwide curfew from 10 p.m. until 5 a.m. and banned political protests.
“To restore peace back to the country in a short time and to reform the country’s politics, economy and society, the Thai military, army, navy, air force and police have seized power from May 22 onward,” Prayuth said. “All people should remain calm and live their lives as normal. All government officials continue to work in line with their regulations and what they have done before.”
The coup could provide short-term certainty to markets after months of street protests and upheaval that led to the removal on May 7 of caretaker Premier Yingluck Shinawatra by the Constitutional Court.
The U.S. denounced the military’s action and said it’s reviewing military and other assistance it provides to Thailand.
“There is no justification for this military coup,” U.S. Secretary of State John Kerry said in a statement.
U.S.-Thai Relations
“While we value our long friendship with the Thai people, this act will have negative implications for the U.S.-Thai relationship, especially for our relationship with the Thai military,” said Kerry, who called for the immediate restoration of civilian government and a return to democracy.
The military’s intervention may not resolve the deep polarization that has taken hold in Thailand over the past decade between the largely rural-based supporters of Yingluck’s brother Thaksin Shinawatra, ousted in a 2006 coup, and his royalist opponents.
Thai military and political leaders met to discuss possible resolutions to the nation’s governance crisis. The military used several trucks to block the entrance and exits of the complex where the meeting was held. The leader of the anti-government protesters, Suthep Thaugsuban, was escorted into an army compound nearby. Feeds from television stations showed logos of the armed forces and played patriotic songs.
Red Shirts
Leaders of the pro-government movement known as Red Shirts have been arrested, Sean Boonpracong, an adviser in the prime minister’s office, said by phone. They include Jatuporn Prompan, Weng Tojirakarn, Tida Tawornseth and Korkaew Pikulthong, with caretaker Prime Minister Niwattumrong Boonsongpaisan in a safe location, he said.
The caretaker government was removed and Niwattumrong and 17 other cabinet members must report in, said army deputy spokesman Winthai Suvaree. The Senate, independent agencies and courts will remain in place, he said.
“The military tried to avoid taking over and it’s quite obvious with their attempts to try to speak with all sides,” Kiat Sittheeamorn, a senior member of the main opposition Democrat party, said by phone. “When the situation as they anticipated worsened, they had to do something.”
Less than an hour before curfew, bars and restaurants in popular tourist areas such as Sukhumvit Road in Bangkok were closed and street vendors were shutting their stalls.
Baht Weakens
The baht weakened 0.1 percent against the U.S. dollar following the announcement, after strengthening as much as 0.4 percent earlier yesterday. The announcement of the coup came after the close of trading on the Stock Exchange of Thailand, with the benchmark SET Index (SET) rising 0.2 percent to 1,405.21.
The stock exchange will open as usual today, the exchange said in a statement. Thai airports will continue to operate as normal and there has been no order to prohibit any travel, Airports of Thailand said in a statement. The army ordered schools and universities to close until May 25.
The government of Southeast Asian neighbor Singapore said it had “grave concern” about developments in Thailand. “We hope that all parties involved will exercise restraint and work towards a positive outcome, and avoid violence and bloodshed,” the Singapore Ministry of Foreign Affairs said in an e-mail.
Thailand’s military has now carried out a dozen coups since the end of direct rule by kings in 1932, with three governments overthrown since 2006 by the army or judicial action. The latest putsch risks international sanctions and may extend almost a decade of unrest that has sapped growth in Southeast Asia’s second-largest economy.
‘Big Mess’
“The most obvious narrative is that Prayuth herded all of these people into a room and decided they were all beyond compromise and decided he needed to seize power, but it’s got to be more complicated than that,” said Michael Montesano, a visiting research fellow at the Institute of Southeast Asian Studies in Singapore. “Now the military has inherited a big mess and how they will manage things in a way that they don’t end up in the trouble they ended up in 2006 and 2007 is what we need to look at.”
Anti-government protesters are demanding an unelected council run the country to wipe out the influence of Thaksin and his sister Yingluck, whose parties have won the last five elections. Government supporters, also protesting in Bangkok, have vowed to fight any such move.
Yingluck dissolved parliament and called fresh elections in December in a bid to end the protests, which began in opposition to an amnesty bill that would have allowed Thaksin to return to Thailand. Thaksin fled abroad to avoid a jail term for corruption handed down by a military-appointed court.
‘Maximum Pessimism’
“We are approaching the end game to the political crisis,” said Alan Richardson, whose Samsung Asean Equity Fund beat 96 percent of peers tracked by Bloomberg in the past five years. The stock market could fall “on knee-jerk reaction to heightened perceived political risk, but it should be an opportunity to start buying near the point of maximum pessimism,” he said by phone from Hong Kong.
The coup came days after the state planning agency reported gross domestic product shrank 0.6 percent in the three months through March from a year earlier, as production and tourism took a hit during months of unrest. The agency this week also cut its growth forecast for this year to 1.5 percent to 2.5 percent from a range of 3 percent to 4 percent earlier.
Thailand will probably have the slowest growth among its major Southeast Asian peers this year, according to Bloomberg surveys. The economy is at risk of sliding into a technical recession this year, analysts said. The last quarter-on-quarter recession was seen in 2009 after a global slowdown led to an exports slump and anti-government protesters shut down Bangkok’s main international airport for more than a week.
“The coup seems unlikely to bring a lasting solution any closer,” Mark Williams, chief Asia economist at Capital Economics in London, wrote in an e-mail. “The military’s seizure of power does nothing for Thailand’s reputation among global investors, or indeed tourists.”
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