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Counting votes at an election center in the Thai southern province of Pattani (REUTERS) |
Thai
Prime Minister Thaksin Shinawatra might think life is rosy after a
historic election win, but he faces challenges from violence in the
Muslim south to an economy over-reliant on export markets, analysts
say.
Concerns
about concentration of power in his hands, accusations of being
dictatorial and an erosion of institutional checks and balances also
worry some ratings agencies.
His
first major trip after Sunday’s poll will be to the restive south
next week where more than 500 people were killed in 2004 in violence
his government has failed to quell despite sending thousands of
troops and imposing martial law.
Unlike
the rest of the country, where Thaksin’s Thai Rak Thai party
romped to victory, it was shut out in a region where heavy-handed
police tactics and incidents such as the deaths of 78 Muslims in
army custody in October angered many voters.
“It
poses his biggest challenge,” said Bob Broadfoot, managing
director of Political and Economic Risk Consultancy, a Hong
Kong-based firm that advises companies doing business in
Asia
.
“I
think it will probably get worse and I worry about it in the longer
term.
“Thaksin
will rely heavily on the military. It will be largely a military
approach to the south as opposed to building bridges down there,”
Broadfoot said, referring to reports that a new 10,000-strong force
had been set up to halt the unrest.
The
insurgency has been confined to the three southernmost provinces --
Yala, Pattani and Narathiwat -- and barely registered as an election
issue among
Thailand
’s Buddhist majority which backs Thaksin’s hard line, opinion
polls say.
Thaksin,
who will fly south on Feb. 15, called the southern defeat a
“wake-up call” for his government. But he defended his approach
to what he called a “law and order” problem.
Analysts
fear the volatile region could become a fertile breeding ground for
foreign Islamic groups, and violence could spread to
Bangkok
or Thai holiday resorts.
“It’s
something to monitor. Could outside Islamic groups use this as a
catalyst for something bigger? It is a risk. To say it isn’t, is
one of Thaksin’s mistakes,” Broadfoot said.
Strained
Relations
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More than 78 Muslims died of suffocation while in detention last October, Thaksin refused to apologize |
Commentators
say
Thailand
’s lack of diplomatic finesse on the south will strain relations
between
Thailand
and its Muslim neighbors further.
Indonesia
and
Malaysia
issued rare rebukes after the 78 Muslim deaths in October. Thaksin
refused to apologize for his security forces and no one has been
punished for the incident.
More
recently,
Bangkok
and
Kuala Lumpur
sparred publicly over the extradition of a suspected Thai Muslim
militant leader arrested in
Malaysia
.
“Trust
has been replaced with cynicism and political arrogance,” Kavi
Chongkittavorn, deputy editor of the Nation newspaper, wrote
on Monday.
Thaksin’s
unprecedented victory -- unofficial results gave his party 375 of
500 seats in parliament -- was thanks mainly to a strong economy and
billions of baht in rural handouts and cheap healthcare.
Analysts
say the key to his second term will be the economy’s strength and
whether it can continue to finance populist programs and billions
for new infrastructure projects.
Thaksin
has pledged to keep the economy buzzing over the next four years,
saying: “We are on the right track”.
But
Standard and Poor’s Rating Services said Thaksin’s landslide
could be a double-edged sword for
Thailand
and its “BBB+” foreign currency credit rating.
It
noted concerns about too much power being concentrated in
Thaksin’s hands and the weakening of the opposition.
“If
these fears are realized and it resulted in increased corruption and
a marked rise in populist policies,
Thailand
’s credit worthiness could suffer,” the agency said.
Government
efforts to stamp out fresh outbreaks of bird flu in seven provinces
will also be watched closely, analysts say.
Thailand
’s poultry industry, once the world’s fourth largest chicken
exporter, has recovered slowly from last year’s epidemic when the
government was rapped for its inept handling of the crisis in its
early stages.
Surging
exports have been the main engine for
Thailand
’s average 6 percent growth in the past three years.
And
while the Dec. 26 tsunami shaved a quarter percentage point off 2005
growth forecasts to between 5.25 and 6.25 percent, a bigger concern
for Thaksin would be a downturn in China, analysts say.
“In
2003,
Thailand
’s bilateral trade with
China
was up 54 percent from the previous year. A disruption of that trade
would definitely slow
Thailand
’s economic growth, but it would not lead to an economic
tsunami,” Strategic Forecasting Inc said in a pre-election
analysis.
