Thailand's political environment last year was marked by machinations to keep the biggest election winner, the Move Forward Party, from power and to ensure the runner-up, the Pheu Thai Party, leads a coalition government the old guard can put up with. These manoeuvres after the May 2023 poll, initially forced Move Forward into the opposition and ultimately dissolved the party while bringing Thaksin Shinawatra back from self-exile in August 2023 for a perfunctory jail sentence and installing Srettha Thavisin as prime minister over the same period.
By August 2024, Mr Srettha was removed by the Constitutional Court on ostensible ethical grounds, thereby paving the way for Paetongtarn Shinawatra to become Thailand's youngest and second female prime minister behind her self-exiled aunt, Yingluck Shinawatra, whose tenure in 2011-14 was upended by a military coup, similar to Mr Thaksin's earlier fate in 2006. With Mr Thaksin back in the political fray and Ms Yingluck looking for a way home, Ms Paetongtarn's premiership marks the Shinawatras' full-fledged return to Thai politics. As this powerful and resilient clan extends and consolidates control within the party, the coalition government and broader Thai politics, political stability and policy performance can be expected up to a point in 2025.
The measured political stability in the coming year derives from a bargain between conservative forces behind the scenes and the Shinawatras. As long as Pheu Thai keeps the People's Party, the successor to Move Forward, tamed in opposition without posing a threat to the establishment, Mr Thaksin, through Ms Paetongtarn, can hold the reins of a coalition government. Tellingly, the Constitutional Court last November dismissed a petition against Mr Thaksin for violating Article 49 of the charter and trying to undermine the democratic system with the King as head of state by exerting undue influence over Pheu Thai. Within days, the Election Commission threw out several dozen fraud charges against Mr Thaksin and Pheu Thai. Both the family and the party appear in the clear for the foreseeable future.
For additional insurance, Thailand's powers-that-be also deployed the Bhumjaithai Party to do their bidding by gaming the senate election process last June in its favour. Bhumjaithai can now count on two-thirds of the Senate as allies to supervise the process of appointments to key monitoring and oversight agencies, particularly the Election Commission and the Constitutional Court. An additional measure is to put a stranglehold on charter change by making the referendum processes cumbersome and restricted to the status quo.
The upshot is that the Pheu Thai-led coalition government will leave the interests of the military and monarchy intact and buoyant while trying to regain electoral ground with policy performance. Notwithstanding the dismissed charges over his role and influence over Pheu Thai, Mr Thaksin has been giving campaign speeches in recent local elections and appearing more in direct charge of the party he founded 27 years ago. The division of labour between him and his youngest daughter may be seen as that of chairman and CEO, between mind and body, backdrop and foreground, strategy and tactics. It is more enmeshed and fused than when Ms Yingluck was prime minister with her brother in self-exile. This time, he is home, and his daughter is prime minister.
For 2025, Pheu Thai is poised to roll out the rest of its 10,000-baht digital handout scheme to 45 million low-income earners after delivering to 14.5 million among them last September. Tourism and foreign direct investment in key sectors, such as automotive and data centres, are on the cards. Bilateral free-trade agreements, particularly with the European Union, will be accelerated to build on the momentum generated by the Thailand-European Free Trade Association deal this year. The joint oil and gas exploration in the overlapping claims area (OCA) will be a major focus for Thailand's energy security despite controversy and opposition from anti-Thaksin columns.
Growth for 2025 is projected at 2.9% but there is upside potential as Pheu Thai is desperate to rev up growth engines to contain public debt of 66% and household debt of 91% as measured in GDP terms ahead of the next poll in 2027. Mr Thaksin has even touted a key barrier of 5% growth to regain competitiveness and placate popular demands and hardships.
There will likely be steady noise from saboteur groups who want to upend the Paetongtarn government, similar to the street protests in the past that ousted both Mr Thaksin and Ms Yingluck. However, with the establishment-backed realignment between Mr Thaksin and his old enemies against the People's Party, which appears satisfied to bide its time and prove its worth as an effective and technocratic parliamentary opposition, the paramount agreement among the players that call the shots in Thai politics is likely to last through 2025, plausibly all the way to the next poll barring unforeseen and earth-shaking circumstances.
All things considered, Thailand has essentially come full circle in two decades without much forward movement as its peer competitors have surged ahead, featuring Vietnam, Indonesia, Malaysia, and India. When Mr Thaksin and his party won a landslide re-election in February 2005, Thailand was on the cusp of regional leadership and economic upgrading to climb up global value chains with an eye on membership in the Organisation for Economic Cooperation and Development, the elite grouping of developed countries.
Evidently, Mr Thaksin and his cronies were beset with conflicts of interest and corruption. But the dial has moved in Thai politics. Those who still question his integrity and return to politics should be asking why Mr Thaksin's powerful enemies have made such a deal to allow him to effectively run the country again. Over 2025-26, Thailand's political trajectory and economic well-being are largely left to the same old hands from 20 years ago, and they are now in their 60s and 70s. None of this seems to weigh heavily in the minds of Thailand's powers-that-be. As long as they stay on top, they don't seem to care about the cost to Thailand.