Business leaders voiced pessimism over the outcome of Thailand's first post-coup polls yesterday, saying it would not likely ease the political uncertainty that has plagued the economy for two years.
The People Power Party (PPP), which was overtaken by allies of deposed prime minister Thaksin Shinawatra, looked set to win 228 of the 480 parliamentary seats up for grabs, but fell short of a majority after Sunday's election.
Its main rival, the Democrat Party, was set to win 166 seats, with five minor parties sharing the rest.
PHOTO: EPA
The PPP immediately began wooing potential coalition partners, but the Democrats refused to bow out and said they would set up a new government if PPP fails to.
Thai markets were closed yesterday for a national holiday, but with the shape of a new government still uncertain, business leaders said they had little confidence that the country's lackluster economy would pick up next year.
"We still have lots of political uncertainty after the election," said Pornsilp Patcharintanakul, deputy secretary-general of the Board of Trade, a major business body.
"The next coalition government will not be able to ease political uncertainty because its foundation is shaky. I believe that the new government will last no more than one year," Pornsilp said.
Thailand's economy is expected to grow 4.5 percent this year, which ranks among the lowest in South-east Asia, with business and consumer confidence plummeting to five-year lows owing to prolonged political uncertainty.
When the military ousted Thaksin in a bloodless coup in September last year after months of protests, hopes were high that the army-backed government would lift the country from its political morass and set the economy humming.
But the junta made a series of policy blunders, including tough capital controls, and has failed to restore business confidence at home and abroad over the past 15 months.
Adisak Rohitasune, vice chairman of the Federation of Thai Industries, the kingdom's largest business group, said he had little hope that the new elected government would do any better.
"[The] stability of a new coalition government is questionable. We don't know how well the new government can unite [a divided country] and push forward economic policies," Adisak said.
Analysts have predicted the outcome of Sunday's election will be unlikely to resolve deep divisions between anti-Thaksin urban dwellers and the rural masses, who remain loyal to the deposed leader.
PPP drew most of its support from farmers, while the Democrat Party was popular with Bangkok's middle-class, who spearheaded anti-Thaksin protests that culminated in the coup.
Supavud Saichua, a senior economist at Phatra Securities, said the economy was unlikely to turn around after the election given the country's polarized political landscape.
"It is difficult for investors to regain confidence after the election because politics will remain intense" with struggles between pro and anti-Thaksin forces, Supavud said.
Promon Suthiwong, a former executive of Thai conglomerate Siam Cement and chairman of the Board of Trade, said he saw no end to the political uncertainty plaguing the country.
"Nothing is clear at the moment in terms of who will be forming a new government. Politics has yet to stabilize due to lots of uncertainty," Promon said.
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