Political Risk Analysis - Corruption Scandal Poses A Risk To Military's Popularity As Elections Approach - MAR 2018

BMI View: The corruption scandal involving the Thai deputy prime minister poses a threat to the military government ' s popularity as elections, now scheduled for early 2019, approach. A potential divide between the military and the yellow shirts could provide an opportunity for Thaksinite forces to step up , and we have revised down out short-term political risk index score to reflect this. Nonetheless, we maintain that provisions in the constitution will ensure that the military maintains a tight grip on power.

The military government is facing its first major test of public support since the vote on the new constitution in August 2016, which was seen as an endorsement of the military's rule. A scandal involving Deputy Prime Minister Prawit Wongsuwan has the potential to shift public opinion away from the military at a crucial time as Thailand is preparing for general elections.

The scandal has been dubbed 'watchgate' as Prawit, who also serves as defence minister and is a close ally of Prime Minister Prayut Chan-o-cha, was seen in a photo of Prayuth's reshuffled cabinet wearing what has been identified as a luxury Richard Mille watch estimated to be worth up to USD500,000. Earlier photos of Prawit have revealed at least 25 high-end watches, which do not appear on past lists of Prawit's assets, and despite arguing that he borrowed the watches, there are growing calls for his resignation. Given that the military ostensibly took power on the grounds of reducing corruption in Thai politics, the scandal is a big blow to the current government's credibility and may hurt their chances of remaining in power through the ballot box.

Prayut Remains Silent Despite Growing Calls For Prawit To Step Down

The prime minster has refused to condemn Prawit, referring to it as a personal matter, and local media outlets have also been quiet on the issue due to the fear of prosecution, which the government has used increasingly since it took power to silence critics. However, the lack of accountability is causing a rise in public unrest. On July 20, police blocked protestors planning to march from Bangkok to Khon Kaen in a rare display of public discontent towards the junta. While relatively small in scale, the demonstration was broadcast live on Facebook and was shared more than 900 times according to news sources, and viewed by more than 32,000 times at the time of writing. Considering that the courts enforce laws prohibiting sharing of social media content deemed critical of the junta or royal family, which can lead to long-term jail sentences under its computer crimes act, the event marks a noticeable show of dissent by the Thai population.

Elections Delayed Until 2019

Lawmakers vetting a bill on the country's new election laws have voted for changes that would postpone its enforcement and subsequently delay the return to elections. The bill would take effect 90 days after being published in the country's official Royal Gazette, instead of effective immediately after publication as is typical. Thailand's military-drafted constitution mandates that elections be held within 150 days of several electoral laws taking effect, and delaying enforcement of one law by three months could delay the election until early-2019. Thailand's National Legislative Assembly is widely believed to answer to the executive branch. It may have been the case that the decision to delay the enforcement of the election laws was driven by the junta's desire to delay the elections in order to have more time to recovery from the latest scandal, as well as to make further preparations for the transfer of power.

Yellow Shirt Support At Risk

Former prime minster and head of the Democrat Party, Abhisit Vejjajiva, has warned Prayuth that the scandal could hurt his credibility and damage his chances of returning to office once elections are held. The support of these so-called yellow shirts, which backed the coup to overthrow Yingluck Shinawatra's red-shirt government in 2014, has been crucial in legitimizing the military's rule. A significant risk comes from the potential for the recent scandal to drive a further wedge between the yellow shirts and the military, which would play into the hands of the red shirts and their de facto leader Thaksin Shinawatra.

Red Shirts May Seize On Opportunity, Public Unrest May Rise

Both Thaksin, who has been in self-imposed exile since he was removed from office in 2006, and his sister Yingluck, who fled the country in 2017, were both ousted due to corruption allegations and may use the controversy over Prawit as a means of rallying support among Pheu Thai Party supporters in the country's heartlands. With this in mind, and with tensions likely to rise as elections approach, we are notching down Thailand's short-term political risk index score from 70.8 to 70.2 due to a reduction in the social stability subcategory. This marks a shift in momentum after Thailand's score has been upgraded several times over recent years as a result of the junta's tight grip on power.

Military ' s Grip On Power To Remain Strong

Nonetheless, we maintain our view that the military will maintain its grip on power. The return to elections is only a token move towards democracy as any new government will be severely hamstrung by the military ( see ' Restoration Of EU Ties To Shore Up Support For Junta ' , December 15). Even if the populist Pheu Thai Party does manage to regain power, the new constitution ensures that political parties will be held more tightly to account by other constitutional bodies, such as the constitutional court, while the impeachment of politicians will become easier. Future governments will also be required to adhere to the military's own 20-year reform plan for the country, facing penalties if they refuse to do so.