Junta leader confirmed as Thailand’s Prime Minister

Junta leader confirmed as Thailand’s Prime Minister

07/06/19

Annette Nguyen, Business & Policy Intern

The former head of Thailand’s military junta, Prayut Chan-o-cha has been selected as the country’s next prime minister, securing the military’s already tight grip on power after the first Thai election in eight years. The 65-year-old retired general, who was nominated by a military-backed coalition led by the Palang Pracharath party, had been expected to keep his post under a new political system introduced by the junta. Critics claim the new system was designed to prolong military dominance in Thai politics.

Prayut is expected to form a government by the end of the month, having comfortably reached the 375-vote threshold – more than half of the 750-member parliament needed to win the premiership. However, he leads a fragile 19 party coalition with only a four-seat majority in the lower house, creating concerns over policy continuity and the passing of legislation and budgets. Prayut’s party, Palang Pracharath, won the second highest number of seats in the House of Representatives, after first-placed opposition party Pheu Thai. Palang Pracharath won the vote for Prime Minister, however, with the support of smaller parties and the military-appointed 250-seat senate.

As head of the junta government that took power in 2014, the former general presided over a recovery in Southeast Asia’s second-largest economy, but economists are concerned over his ability to face the challenge of restoring foreign investors’ confidence to propel the economy further, according to Nikkei Asian Review. “This scenario appears vulnerable to the risk of a weak and short-lived government…thus causing a risk of policy discontinuity,” said Charnon Boonnuch, economist at Nomura in Singapore. “Political uncertainty will remain high and continue to weigh on the growth outlook.”

Southeast Asia’s second-largest economy grew 2.8 per cent in the first quarter from a year earlier, the weakest growth since 2014. Public investment, exports and tourism all slowed amid rising global trade tensions and political risks at home, Reuters reported. Political uncertainty has affected private sector sentiment and dampened prospects for public spending this year, said Sarun Sunansathaporn, economist of Bank of Ayudhya, who slashed his 2019 economic growth forecast to 3.2 per cent from 3.8 per  cent. Growth was 4.1 per cent in 2018, the fastest in six years, but still lagged the Philippines’ 6.2 per cent and Indonesia’s 5.17 per cent.