May 15, 2014 12:00 am JST

Yingluck sowed the seeds of her downfall

TORU TAKAHASHI, Nikkei staff writer

Thailand's now ex-Prime Minister Yingluck Shinawatra gives a traditional greeting as she addresses reporters in Bangkok May 7. © Reuters

BANGKOK -- "I carried out my duties with pride as the people's prime minister during my two-year nine-month tenure," Yingluck Shinawatra said in a May 7 television address after the Constitutional Court took away her title. "Although I am no longer prime minister, I will continue to protect democracy."

     Yingluck planted the seeds of her downfall within one month after she became prime minister in August 2011. A series of changes in security personnel, said to benefit the Shinawatra family and their political allies, took place in September. Thawil Pliensri was removed as head of the National Security Council, and his position was given to national police chief Wichien Podposri. Yingluck's brother and former prime minister Thaksin's brother-in-law, Priewpan Damapong, was later appointed police chief. Thaksin is the fugitive former prime minister who skipped the country.

     Thawil fought his removal in the courts and won. The Central Administrative Court in March ordered his reinstatement as the nation's security chief. The court victory emboldened anti-Thaksin group, including upper house opposition party members, to bring a complaint against Yingluck's involvement in the series of appointments to the Constitutional Court. This paid off, and the court ruled her actions unconstitutional.

     Appearing as a witness in the trial on the eve of the May 7 verdict, Yingluck argued she made the appointments for the sake of national interest. The court said it is clear she made the appointments to favor her clan.

     The Yingluck government started strongly, following a decisive election win in 2011. Thailand's first female prime minister made two promises -- to end the divisiveness her brother creates and to steer the economy away from export dependence.

     Thaksin built a fortune through his mobile telecommunications business before entering politics. Becoming prime minister in 2001, he led efforts to improve lives in rural areas. Measures included a medical insurance program that costs just 30 baht ($0.92) a month, a debt repayment moratorium and the establishment of funds for areas outside cities.

     This earned his party overwhelming support from farmers, who make up more than half of Thailand's voters. Their support gave the party decisive victories in 2001 and 2005 general elections.

     The military deposed Thaksin in a 2006 coup backed by those with the most to lose from the prime minister's reform drive. By that time, however, rural residents were politicized, and alongside democracy advocates, criticized the military action. As the conflict escalated, security forces removed pro-Thaksin demonstrators occupying a part of central Bangkok. This 2010 operation led to more than 90 deaths, worsening divisions that remain to this day.

Going it alone

On the economic front, Yingluck's government aimed to shift toward a domestic demand-driven structure.

     Thailand since the 1980s has courted foreign manufacturers. It cultivated exports by making the most of the weaker baht. The country grew into a major Asian production hub, centering on Japanese companies, which account for 40% of foreign direct investment. Today, exports make up roughly 70% of Thailand's real gross domestic product.

     This export-based model means the country's economy is highly prone to ups and downs in the destinations to which it ships goods, such as the U.S., Europe, Japan and China. To address this issue, Yingluck's government aimed to boost domestic demand.

     The government faced a big challenge right at the gate. Severe flooding in 2011 left seven Thai industrial parks underwater. Economic growth slumped to zero. The media attacked Yingluck, blaming her for poor crisis management.

     Her government began implementing measures to change the economy after the floods abated. The minimum wage rose sharply to 300 baht a day nationwide. A rice-pledging scheme effectively promised farmers that they would be able to sell their staple at high prices. Programs to support first-time buyers of automobiles and homes were also launched.

     These measures worked. The ensuing consumption boom raised new car sales in 2012 by 80% from a year earlier to 1.45 million units. Exports suffered from a global economic slowdown and the baht's appreciation. But the Thai economy recorded 6.4% growth. Industries praised Yingluck for delivering on election promises, reaping the benefits of the consumption boom.

     Then the economy ran out of steam. The consumer market shrank as people began reining in spending after excessive consumption. Many households were left with debt.

     In response, Yingluck's government turned its attention to large-scale public projects, such as a high-speed railway system, to stimulate the economy through infrastructure development that will strengthen the country's future competitiveness. But just as the government was implementing new policies, political chaos returned.

Tough decisions

Yingluck's ruling Pheu Thai Party last August submitted a bill designed to offer amnesty to people facing politics-related criminal charges. The bill, designed to help Thailand reconcile, initially targeted only rank-and-file political activists. Its scope was suddenly expanded to include political leaders in October.

     This was interpreted as an attempt to pave the way for the return of Thaksin, who was convicted of corruption charges. He left Thailand to avoid jail. The expansion of the bill infuriated the anti-Thaksin camp and prompted massive demonstrations in Bangkok.

     The ruling party was forced to withdraw the bill and dissolve the lower house in December. But the anti-government movement did not lose momentum. Their boycott rendered the February general election invalid.

     Just as the warring parties began bargaining for a compromise to pave a way for a fresh general election, Yingluck lost power because of the court ruling. The situation has been further complicated by the National Anti-Corruption Commission's May 8 decision to prosecute Yingluck for the rice-pledging scheme.

     The commission also charges that the former prime minister looked the other way amid suspicions of cabinet corruption and ignored warnings that the rice-pledging scheme would be detrimental to the country. Following the commission's decision, the upper house plans to impeach Yingluck on the charges of dereliction of duty and abuse of power. If the charges stand, Yingluck will be banned from politics for five years.

     The pro-Thaksin camp is fiercely critical of the decisions, arguing they amount to a judicial coup. The country's judiciary, including the Constitutional Court, has delivered decisions that are unfavorable to pro-Thaksin forces one after another. For example, Yingluck is the third pro-Thaksin prime minister to lose power due to court rulings since 2008, following Samak Sundaravej and Somchai Wongsawat.

Imbalance?

With the goal of preventing the government from becoming too powerful, independent organizations such as the Constitutional Court and the National Anti-Corruption Commission have been given immense power. The judiciary can remove democratically elected prime ministers.

     Some argue this is a distorted system rooted in the Thai people's mistrust of politicians. But the pro-Thaksin camp sowed the seeds of its demise. It may be arrogance that was born after winning successive elections decisively, but the Yingluck government did give the judicial system an invitation to oust it.

     Although Yingluck has lost power, the pro-Thaksin party is looking to win the next election. But its economic policies -- once the party's selling point -- have lost credibility.

     The rice-pledging scheme, a major economic policy, ran into problems because rulings made it impossible for the government to borrow funds to pay farmers for rice.

     Without the payments, nearly 1 million farmers are having trouble securing funds. Desperation has prompted some of them to protest, blocking roads near Bangkok and demonstrating in front of government buildings. This is the first time farmers have moved against a Thaksin-allied government. It leaves a question as to whether the pro-Thaksin bloc can continue to attract strong public support.