Thailand’s pro-democracy parties faced built-in obstacles to forming a government even before a historic win in Sunday’s general election. Now that resistance is starting to take shape, making investors wary of a protracted political uncertainty.
Move Forward Party (MFP) leader and prime ministerial candidate Pita Limjaroenrat, whose party won the most seats in Sunday’s election, said on Thursday that the coalition has expanded to eight parties with 313 members. While that is a clear majority among elected lawmakers in the 500-member House of Representatives, it is short of the 376 that is needed for the bloc to form a government without needing votes from the 250-member, military-appointed Senate, which also gets to decide the prime minister in a joint sitting.
Signs of a tough fight ahead emerged after Bhumjaithai, a party that came third in the election with 70 seats, said it will not back Mr Pita to become prime minister because of his quest to changeon Section 112 of the Criminal Code, also known as the lese majeste law. The Senate is likely to follow suit.
The potential for a conservative backlash is hitting markets, with foreign investors turning into net sellers of baht-denominated bonds and stocks. Overseas funds sold a net US$492 million of Thai bonds on Wednesday, the most since November 2016, according to Thai Bond Market Association data. They also sold $183 million of equities on a net basis for the three days through Wednesday.
The baht fell for a third straight day, losing 1.6% against the dollar since Tuesday and offsetting the post-election rally on Monday. The stock index rose for the first time in six days.
Seeking to quell concerns, Harvard-educated Pita, 42, said the alliance is ready for the challenge.
“I’m confident we’ll have the votes to secure the premiership,” Mr Pita told reporters in Bangkok on Thursday, in the first joint briefing with the seven other coalition members including Pheu Thai, a party backed by exiled former prime minister Thaksin Shinawatra that came in second place. “There are no scenarios that we haven’t anticipated.”
Mr Pita’s coalition may be at risk if conservative parties, which together hold about about 180 seats in the lower house, stake a claim and secure the backing of the majority of the Senate. While the Bhumjaithai Party has said Move Forward has the right to form a government first, Bhumjaithai leader Anutin Charnvirakul has often been seen as a potential prime minister candidate.
Move Forward has said it will not back down from its vow to amend the so-called lese majeste law.
There are also differing views within Mr Pita’s coalition, however. Ousted premier Thaksin has distanced his family from any moves that appear to go against the institution, even as the parties said they have agreed to work together to reach a consensus on how to proceed with Move Forward’s amendment proposal. A memorandum of understanding, which will be signed by the coalition partners on Monday, will lay out their common agenda and how they will approach Section 112.
Pheu Thai leader Cholnan Srikaew said his party is committed to forming a “government of hope and dreams” with Move Forward. Pheu Thai, which dominated Thailand’s national elections for two decades, previously said it was open to discussing the proposal to amend the lese majeste law in parliament.
"Article 112 isn’t an issue that will prevent us from working together, because there are common agreements that everyone sees as a solution," Dr Cholnan said at the joint briefing.
Analysts said the MFP may need to soften its stance on changes to Section 112 in order to reduce friction and gain support from senators or conservative parties. Pheu Thai may even join with other parties if Mr Pita fails to form a government.
"Due to the number of seats that Pheu Thai holds, any viable coalition must include it in the political equation," said Napon Jatusripitak, a research fellow at Singapore-based ISEAS-Yusof Ishak Institute. "The same cannot be said for the Move Forward Party, which is less flexible."
