Thailand May Hold Elections in 12 Months, Korn Says
By Shamim Adam
April 25 (Bloomberg) -- Thailand may hold elections within a year as the government attempts to reconcile political differences that spurred violence and led to a state of emergency this month, Finance Minister Korn Chatikavanij said.
Prime Minister Abhisit Vejjajiva is committed to seeking to complete reforms in the next nine months, Korn said in an interview in Washington, where he is attending the International Monetary Fund and World Bank meetings. Elections will probably be held before the current government’s term ends in 2 1/2 years, he said.
“Given that we have initiated political reforms, one would expect that should take six to nine months to complete,” Korn said. “Once completed, we would want to call for fresh elections so, reasonably, the first window would be about 12 months from now.”
Abhisit has pledged to call elections once stability is restored in the nation of 66 million people. Anti-government protesters calling for Abhisit’s resignation say his rule is illegitimate because he came to office after a court dissolved the former ruling party for vote buying.
The premier yesterday announced the end of 12 days of emergency rule in Bangkok after street protests, riots and an assassination attempt. He imposed the emergency decree on April 12, a day after protesters backed by former premier Thaksin Shinawatra forced the cancellation of an Asian summit in the resort town of Pattaya.
Corruption Allegations
Thaksin, whose party won three straight elections before the military ousted him in a 2006 coup, has fought since then to clear his name of corruption allegations and is in exile to avoid a jail term. His allies won a 2007 election, the first since the coup, before courts removed two pro-Thaksin prime ministers from office last year.
While new elections may put Abhisit’s rivals in power once again, that’s not stopping the government from implementing the reforms, Korn said.
“Whether at the end of that, we are able to come back for more is up to the people,” he said. “To say we’re not concerned would be lying but” the government is doing what it believes is necessary to revive the economy and ensure political order.
Korn is meeting investors around the world to ease their concerns about political instability and the economic slowdown. The Southeast Asian nation may see gross domestic product contract by as much as 5 percent this year, deeper than an earlier prediction of a 3 percent decline, as protests disrupt businesses and deter tourist arrivals, he said.
Export Decline
There are some signs a decline in the export of electronics and other products is bottoming out, even as other reports show imports and domestic consumption are still weak, the minister said.
“The jury is still out, but there are now signs that the bottom will become clearly visible towards the third or fourth quarter this year,” Korn said.
Thailand has unveiled about 1.57 trillion baht ($44.4 billion) of additional spending over three years, mainly on infrastructure projects, to help create jobs and spur economic growth. That’s in addition to an earlier 116.7 billion-baht stimulus package of public works, training programs, cash handouts and tax breaks.
The government is preparing a 5 billion baht package for tourism-related businesses which will include loans, to help them tide over an expected slowdown in arrivals, Korn said.
Boost Economy
The government will run deficits of between 3.7 percent and 3.8 percent of GDP for the next two budgets as it attempts to boost the economy, Korn said. National debt as a percentage of GDP will probably peak at 65 percent from 42 percent now in that period, he said.
“That’s a significant commitment and one we believe we can bear without impacting our sustainability over the long term,” he said.
The Thai government will finance its deficit through domestic borrowings and loans from international financial institutions such as the World Bank and the Asian Development Bank, he said. There are no current plans to issue foreign- currency bonds, Korn said.
The central bank still has “room to move” on interest rates after cutting borrowing costs to the lowest level since July 2004, he said.
“We are on the right path to helping Thailand recover,” Korn said. “Thailand is open for business.”