Pheu Thai, a party linked to former premier Thaksin Shinawatra, has joined hands with conservative Bhumjaithai Party to form a government and break a political stalemate that’s gripped the Southeast Asian nation since the May general election.
(Bloomberg) — Pheu Thai, a party linked to former premier Thaksin Shinawatra, has joined hands with conservative Bhumjaithai Party to form a government and break a political stalemate that’s gripped the Southeast Asian nation since the May general election.
Bhumjaithai, a group known for championing the liberalization of cannabis, will endorse a prime minister candidate picked by Pheu Thai, its leader Anutin Charnvirakul said at a briefing in Bangkok on Monday. The party agreed to join the new alliance on conditions that it excludes the reformist Move Forward Party and will not seek to amend a controversial royal insult law nor run a minority government, he said.
The new coalition wil include more parties, which will be unveiled over the coming days, Pheu Thai leader Cholnan Srikaew said at the same briefing. The bloc will command a majority of the lawmakers in the 500-member House of Representatives, he said.
Pheu Thai’s coalition is taking shape after the party broke away from a previous pro-democracy bloc led by Move Forward that won the most seats in the election. Pita Limjaroenrat, Move Forward’s leader, was twice blocked from taking the prime minister’s job by pro-establishment parties and senators, who opposed his party’s pledge to amend the law barring criticism of the royal family.
Anutin said the alliance of parties from two opposite camps may help heal the polarization that has plagued modern Thai politics. “Now it’s time that the country gets a new government and move on. We need to end all those disputes and despairs,” Anutin said.
Thailand’s benchmark stock index rallied as much as 0.6% on speculation a new coalition may help end the political gridlock and ended 0.1% higher. The baht initially pared its losses before sliding again to trade 0.4% lower by 5 p.m. local time.
Still, any rally in Thai equities will be “limited” as the alliance isn’t yet assured of enough votes in parliament to get its prime ministerial candidate elected, said Poramet Tongbua, an analyst at Bualuang Securities Pcl. Investors will “cautiously monitor” the political developments before making aggressive investments, he said.
Pheu Thai and Bhumjaithai, which placed second and third in the election, together command 212 seats in the lower house, still well short of a majority and a threshold to seal the prime minister’s post. Pheu Thai has said it will nominate property tycoon Srettha Thavisin for the top job.
It’s not yet clear how Pheu Thai will muster the remaining lawmaker support to form a government. Any winning coalition will need the backing of the majority of the 750 lawmakers in a joint sitting of the the lower house and the military-appointed Senate.
“A coalition with Bhumjaithai doesn’t create any obstacles in winning the backing of the Senate and other parties, unlike one with Move Forward Party,” Cholnan said. “Our chance of a successful government formation with Bhumjaithai is high.”
A new date for the parliament to pick the next prime minister has not yet been set. A vote set for last Friday was canceled, pending clarity from the Constitutional Court, which last week deferred making a decision about Pita’s re-nomination petition.
With the political stalemate continuing, Thaksin also delayed his plan to return to Thailand this week, signaling Pheu Thai is still some way from reaching a deal to form a government.
–With assistance from Anuchit Nguyen, Pathom Sangwongwanich and Suttinee Yuvejwattana.
(Updates with comments from Anutin and Cholnan in fifth, ninth paragraphs.)
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