Thailand continues to spiral towards chaos. Three people were killed in protests in recent days, while a run on a bank linked to the Thai rice subsidy program could threaten to destabilize the economy. Meanwhile, an anti-corruption panel has charged Prime Minister Yingluck over losses accrued through the rice subsidy program. With Thailand growing increasingly unstable, the military or King may soon look to intervene.
What that could mean for the current administration remains unknown. It appears, however, that Ms. Yingluck may be losing her grip on power. With the security situation deteriorating, the military may once again take charge of the country.
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Fifteen dead as protests in Thailand escalate
So far, fifteen people have died in clashes between the police and protesters. Up until recently, the government had been trying to avoid direct confrontation with protesters, and was even willing to cede government buildings, allowing the city of Bangkok to practically be shut down.
With protesters refusing to relent or give ground, however, the Thai police have been increasingly aggressive in their efforts to dislodge the protest movement. Up until now, however, many of Bangkok’s major thoroughfares and financial centers remain closed or are being disrupted.
On Tuesday, hundreds of security forces advanced on the Phan Fa bridge in an attempt to clear out protesters. Using tear gas, the police tried to remove the protesters, however, gunfire erupted. They were meet by a fierce and armed resistance and in the resulting clash one police officer and three protesters were killed. At least 64 other people were injured and a further 200 were arrested.
Impact on economy being felt
Thailand has been one of South East Asia’s best success stories in recent years. Political instability, however, is threatening to derail Thailand’s economic growth. Foreign investors, such as Toyota Motor Corp (ADR) (NYSE:TM) and Ford Motor Company (NYSE:F), are growing increasingly concerned. Meanwhile, domestic companies are seeing slumping demand.
Worse yet, a recent run on a bank could threaten the stability of the entire financial system. Depositors withdrew nearly a billion dollars from the Government Savings Bank after said bank extended a $5 billion dollar loan to the rice subsidy program to make backed payments and fund future operations.
With the fiscal solvency of the program in question, and the program tied to the now embattled Prime Minister, depositors had more than a few reasons to withdraw funds. What this could mean for the larger fiscal system remains unknown.
Rice program may be nail in the coffin for Yingluck
Now, it looks like the rice program that had garnered Ms. Yingluck a huge amount of goodwill among the people will prove to be her ultimate undoing. The program’s cost has skyrocketed in recent months and the government has been struggling to pay the bill. Now, unpaid farmers are also protesting against the government.
At the same time, Thailand’s anti-corruption agency has announced that it will seek charges against Ms. Yingluck over her management of the program. According to the agency, Ms. Yingluck ignored repeated warnings about corruption within the program and the increasing fiscal instability of it.
It is expected that the panel will summon Ms. Yingluck to defend herself next week. So far, the Prime Minister has defended her management of the program and has claimed that the program has been run with integrity. Her next step to fight the charges remain unclear.
The pending legal case may ultimately be Ms. Yingluck’s downfall. If found guilty, she may be forcefully removed from office, or the military may find it to be enough reason to step in and take charge. Her situation is looking increasingly similar to her brother, Thaksin, who was thrown from power in 2006.