South-east Asia’s second-largest economy is in the grips of a youth protest movement that is growing both in size and audacity.
Students began staging regular protests — the evocative Thai word for demonstration is “mob” — in July.
Their protests began with demands for Prime Minister Prayuth Chan-ocha’s government to resign, and in recent weeks have escalated to sweeping, and for conservative Thais, subversive calls to limit the powers of King Maha Vajiralongkorn.
The students are planning at least one more mass action, a general strike, in October, historically a “hot” month of student unrest.
And some investors are taking flight.
About $7.8bn flowed out of Thai stocks in the year to the end of August, and another $2.3bn out of bonds. Stocks have dropped more than 20 per cent this year.
The Thai baht — seen as a haven currency before Covid-19 because of the country’s generous foreign exchange reserves and cash-cow tourism sector — is down 6 per cent against the dollar.
Eurasia Group recently downgraded its outlook for Thailand to negative because of what it called a “worsening political divide and reform outlook”.
The political consultancy assigned a 35 per cent (comically precise, for anyone familiar with the volatility of Thai politics) probability to the risk that the protests would spiral out of control and end in Mr Prayuth’s ousting.
Growth has been lagging behind most of the country’s neighbours and its population is ageing, raising the spectre of a “middle income” trap, with the population growing old before it gets rich.
Economic policymaking is in drift. The post of finance minister is empty for the second time in fewer than three months after technocrat Predee Daochai resigned this month, citing health reasons, just 26 days into the job. There is no news yet on a successor.
“Looking at the Thai economy, as a whole, it’s difficult to have a lot of confidence, especially compared to its neighbours,” said Brian Tan, a regional economist at Barclays in Singapore. – Financial Times