Decisive year ahead

Decisive year ahead

ANALYSIS: The economy, draft charter and the case against Yingluck are major hurdles for the government, heading into 2016.

Prime Minister Prayut Chan-o-cha takes a moment out at last Saturday's event to mark the first anniversary of the replica floating market at Krung Kasem canal behind Government House. (Photo by Thanarak Khunton)
Prime Minister Prayut Chan-o-cha takes a moment out at last Saturday's event to mark the first anniversary of the replica floating market at Krung Kasem canal behind Government House. (Photo by Thanarak Khunton)

Bread and butter issues remain critical to the government's fate this year, with its handling of the economy likely to influence the referendum on the draft charter and perhaps even its mid-2017 promise of a return to democracy.

As the government steps into the New Year, it is carrying some heavy baggage battling critics of its curbs on free speech, and a poor rating by international agencies on its aviation, fishing and labour rights record. (See infographic below)

Some of the pressure points could lead to new criticism of its efforts, despite the National Council for Peace and Order (NCPO)'s firm grip on security.

With political pressures expected to increase, economic issues will require an immediate remedy and will have direct bearing on the government's popularity.

Political observers agree the state of the economy is likely to determine the government's success as it navigates a return to democracy under its so-called roadmap.

Since Deputy Prime Minister Somkid Jatusripitak came on board as chief of the economic team, he has devised measures to stimulate the sluggish economy. The latest shot in the arm was the offer of a tax deduction to get taxpayers to spend in the lead-up to the New Year.

The measure was intended to boost retail sales by an estimated 22.5 billion baht at a cost of about five billion baht to the national coffers. The government hopes it will help lift last year's economic growth to 3% from the earlier projected 2.8%.

Experts say the government is doing all it can to get the economy moving, including the likelihood the shopping-for-tax-deduction measure will be revived on other long-weekend holidays this year. 

Another litmus test for the government will be how it handles the lead-up to the referendum on the draft charter being written by the Constitution Drafting Committee headed by Meechai Ruchupan.

If it is widely accepted in a referendum, the government may find its problems diminished as it completes the NCPO roadmap, which will take the country into a general election in mid-2017.

But such political goodwill starts with people having enough money in their pockets, which means the government's handling of the economy is likely to influence how people vote in a referendum likely to be held in August this year.

Likewise, experts believe that a referendum result rejecting the draft charter would be taken as a thumbs down for the government.

The first draft of the document will be released at the end of this month.

While the referendum issue generates uncertainty, political tensions will escalate as the Supreme Court's Criminal Division for Political Office-Holders starts hearing the case against former premier Yingluck Shinawatra for her alleged dereliction of duty in the rice-pledging scheme, her government's flagship policy, which is thought to have caused losses of more than 500 billion baht to the state. 

Under this probe, the Finance Ministry is investigating Ms Yingluck's alleged dereliction of duty while the Commerce Ministry is looking at any administrative irregularities and graft in the scheme itself. Results are expected by October this year.

However, Ms Yingluck has fought back, arguing she was obligated to execute the scheme she promised to voters and which she declared before parliament.

If found guilty, she could be made to pay for damages of up to 100 billion baht.

The Supreme Court ruling and the inquiry results could turn up the heat on the government if the outcomes are negative for Ms Yingluck. 

Although the Pheu Thai Party and Ms Yingluck supporters, including the red shirts, are not as united as they once were, authorities can expect a rough time should the former premier find herself facing a jail term and a consequent ban from politics for life.

The military has clamped down on resistance, particularly by anti-government groups. Its success is partly due to the prime minister's ability to invoke Section 44 of the interim constitution which authorises him to exercise sweeping powers to straighten out problems including those concerning security.

However, it is hard to predict the ferocity of any political disturbance which might break out as a result of the rice-pledging saga, nor what the the military might do about it.

King Prajadhipok Institute's secretary general Woothisarn Tanchai says the government needs to revitalise the grassroots economy and help farmers, notably those with "strategic political significance'' such as rice and rubber. 

He added it is unclear if the mega-infrastructure projects will be implemented this year as planned while their touted long-term benefits to economic security are also in the air.

Sources said the coming drought, likely to be the worst in many years, threatens to cripple crop yields and industrial productivity, as well as reduce household water consumption.  

In politics, Mr Woothisarn said the public may not object to further delays in the next election, while politicians want no disruptions to the NCPO roadmap.

"I think people would accept the outcome if the draft charter is voted down in the referendum and the election isn't held in the middle of 2017 as scheduled," he said.

However, he warned public sentiment could turn against the government, depending on the prevailing political climate. 

If the draft charter does not survive the referendum, one option would be to employ an abrogated constitution and modify it for use. 

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