Thailand: Prime Minister Abhisit Vejjajiva Declares Martial Law to Control Protests

April 7 (Bloomberg) — Thai Prime Minister Abhisit Vejjajiva declared martial law in the capital after protesters stormed parliament, testing the army’s willingness to break up four weeks of mostly peaceful demonstrations.

About 3,000 people entered the gates of Parliament for about two hours and thousands more occupied Bangkok’s commercial district for a fifth day. The emergency decree bans gatherings of more than five people, allows detention without charge and gives soldiers immunity from prosecution.

“The law doesn’t mean we aim to crack down or hurt people, especially innocent people,” Abhisit said in a televised address. “The nation has been severely affected by the protests and the government needs to rectify the situation.”

The protesters, many loyal to exiled former premier Thaksin Shinawatra, grew in confidence after police and soldiers abandoned attempts to disperse them yesterday. Army Chief Anupong Paojinda enforced orders from Abhisit a year ago to break up rallies by the same group that turned violent, something he may be reluctant to do this time.

“Declaring martial law may backfire on Abhisit,” said Michael Nelson, a lecturer at Bangkok’s Chulalongkorn University. “If Anupong sees this as a political problem, an emergency decree may not prompt the military into action.”

Abhisit, who has been living in an army barracks, said protesters have breached the constitution and he declared the demonstration illegal. The law would also prevent misinformation and help stop sporadic grenade attacks that have hit the capital over the past month, he said.

Election Call

The protesters, who say they represent Thailand’s lower classes, want an immediate election. They rejected the premier’s offer to hold a ballot within nine months during televised talks last week, demanding he step down by April 13, the start of the Thai New Year holiday. Many from rural areas may head back to their homes during the three-day break.

“We insist that we will continue fighting peacefully,” Jatuporn Prompan, one of the protest leaders, said after Abhisit announced the state of emergency.

Weng Tojirakarn, another protest leader, said any attempt to disperse the demonstrators may trigger a “nasty fight” in Bangkok. “It will be difficult for the government to break us up,” he said. “We are not afraid because we are doing the right thing.”

‘Selective Curfews’

Anupong, who helped orchestrate the 2006 coup and is due to retire in September, refused to clear anti-Thaksin protesters who seized Bangkok’s international airport in November 2008. Anupong urged then Prime Minister Somchai Wongsawat to call early elections to end five months of protests. A week later, Somchai was forced out when Thailand’s Constitutional Court dissolved his party.

Abhisit “gave few details on what restrictions would be levied or what actions would likely be taken,” PSA Asia, a Bangkok-based security and risk assessment consulting firm, said in a note to clients. “Selective imposition of curfews for specified areas, banning assemblies in specified areas and prompt deployment of security forces to clear demonstrators to prevent further disruptions are possible.”

Before the premier’s announcement, Deputy House Speaker Apiwan Wiriyachai told crowds outside Parliament the military may withdraw support for the government, the Nation reported. The army denied the claim.

“That’s not true,” Army spokesman Sansern Kaewkamnerd said by phone. “We are still working together in unity.”

Ranks Wane

About 8,000 protesters occupied one of Bangkok’s main intersections today, down from 40,000 yesterday, police spokesman Prawut Thavornsiri said. Their ranks wane in the afternoon heat and swell at night, he said.

The political unrest is “a drag and if it was to become prolonged, it would begin to have a significant impact on the economy,” Finance Minister Korn Chatikavanij said in an interview today in Nha Trang, Vietnam, where he was attending a meeting of Southeast Asian finance ministers. “We are still not fully realizing our potential as a result of the political impasse that appears to exist.”

Thai stocks trade at 12 times 2010 earnings, the third- cheapest multiple in Asia after Pakistan and South Korea, according to data compiled by Bloomberg. The SET Index advanced 1.3 percent today, building on gains that have made it Asia’s best-performing benchmark since the round-the-clock rallies began on March 12. The baht traded close to a 22-month high.

Four Seasons

The demonstrations have disrupted about seven downtown hotels, including brands such as the Four Seasons, Grand Hyatt and Intercontinental. Room occupancy has dropped to about 40 percent and events have been canceled, Prakit Chinamourphong, president of the Thai Hotels Association, said by phone.

“We already talked to the government to control the situation and we also talked to protesters, but it’s useless,” he said. “If the protests go on, our situation will be worse.”

Thaksin and his allies have won the past four elections on strong support in rural areas for his platform of cheap health care and village loans. The billionaire former prime minister has orchestrated protests from overseas since fleeing a Thai jail sentence in 2008.

Abhisit, who must call elections by the end of 2011, has asserted his right to complete his term in office. His Democrat party may win as many as 240 seats, or half the total, in the next contest, he said in a March 22 interview.

–With assistance from Anuchit Nguyen, Supunnabul Suwannakij and Yumi Teso in Bangkok and Shamim Adam and Beth Thomas in Nha Trang, Vietnam. Editors: Tony Jordan, Mark Williams

To contact the reporters on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net; Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net;

April 07, 2010, 10:35 AM EDT

(Update adds protester comment in eighth paragraph.)

By Daniel Ten Kate and Suttinee Yuvejwattana

Source: Bloomberg

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