Thai Prime Minister Thaksin Shinawatra yesterday handed over his responsibilities to a longtime friend and fellow police officer less than 24 hours after saying he would step down.
Thaksin's announcement on Tuesday night that he would not serve as prime minister in a new government due to be set up by the end of this month followed mounting protests demanding his ouster because of alleged corruption and abuse of power.
The business community reacted exuberantly to Thaksin's action, with the Stock Exchange of Thailand index shooting 3.7 percent higher to 772.93, its highest level in more than two years, with huge turnover in yesterday morning's trading session.
Thaksin told crowds of his supporters outside his Thai Rak Thai party headquarters yesterday that he would not stay on in a caretaker role but let Deputy Prime Minister Chitchai Wannasathit become acting prime minister.
"I have decided that if I have to rest to let the country move forward, I want to rest now. I have appointed Chitchai to do my work from now on. I need to rest," Thaksin said.
Chitchai, 59, who was recently appointed to oversee security affairs, is a close associate of the prime minister. The two studied together in the US and both joined the Royal Thai Police department where Chitchai rose into senior positions.
Since he is not a member of parliament, Wannasathit is unlikely to remain in the job after the body meets to name Thaksin's successor.
Thaksin, a telecommunications magnate who swept to power in a landslide election victory in 2001, said on Tuesday that he would remain in a caretaker role until a successor was chosen by his ruling Thai Rak Thai party once parliament resumes within the next 30 days.
"It's not that I'm not willing to fight, but when I fight, the nation loses," Thaksin said after naming Chitchai to replace him. "I don't need to see bloodshed among Thais -- Thai blood must not paint the land of Thailand."
Thaksin said he was stepping down after a meeting with Thailand's revered King Bhumibol Adulyadej on Tuesday. It is not clear what, if any role, the constitutional monarch had in the prime minister's decision.
"I am sorry that I will not be able to accept the premier's post," Thaksin said during a brief televised speech, his voice close to breaking despite his normally supremely confident demeanor. "We have no time to quarrel. I want to see Thai people unite and forget what has happened," he said.
Thaksin's party won snap elections he called for Sunday after campaigning virtually unopposed because of an opposition boycott, but early results showed that nearly 4-in-10 voters cast protest ballots.
Thaksin said his party on Sunday won 57 percent of the popular vote and virtually all of the 500 seats in parliament, but official results were not yet announced. Roughly 37 percent cast a protest ballot for no candidate, while the rest went to obscure parties or were spoiled, according to preliminary results.
Thai shares jumped yesterday after Thaksin stepped down, a move praised by business leaders who said an end to months of turmoil would shore up investor confidence.
The immediate reaction in the markets and among commentators has been largely positive although considerable uncertainties remain, not least as to how the country is to be governed pending the convening of parliament.
"It is a good start, creating a clearer picture in the eyes of investors and will restore their confidence in the Thai economy," said Pramon Suthiwong, chairman of the Board of Trade business group.
"Thai businesses also feel greatly relieved and we think that consumer confidence could rebound very soon if the democratic system works more smoothly from now on," Pramon said.
He said Thaksin's decision would pave the way for opposition parties to join a new cabinet to move forward political reforms.
The Stock Exchange of Thailand (SET) gained of 3.7 percent by early afternoon while the baht spiked up to a one-year high against the US dollar at 38.27.
"Investors reacted positively to the announcement. They believe that [Thaksin's] move will help resolve the political crisis," said Sukit Udomsirikul, a senior market analyst at Siam City Securities.
International ratings agency Standard and Poor's yesterday affirmed its foreign and local currency ratings for Thailand after Thaksin's stood down but cautioned that it would take time for the situation to settle.
Standard and Poor's also maintained its "stable" ratings outlook, saying it did not expect Thailand's credit strength to be eroded by the political turmoil.
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