Event

A large majority of the military-dominated Parliament has voted former PM Yingluck Shinawatra’s impeachment and 5-year ban from politics. She is judged responsible for the failure of a costly and contentious rice subsidy programme and for having used it to buy votes. Many MPs from her PTP party could receive a similar sentence. Moreover, Mrs Shinawatra is threatened by a 10-year jail sentence for related corruption charges.

Impact on country risk

Yingluck walks on her brother Thaksin’s footsteps as she has, in her turn, been ousted from power (after a coup last May) and now from politics, and might also have to opt for exile to avoid prison. Considering Thailand's massive rice stockpiles, loss of rice-exporting leadership and budget deterioration, the failed rice scheme has proved to be more a populist than an efficient measure to grant extra revenues to poor rice farmers. Corruption has been an extra issue too. However, there is no doubt this (questionable) condemnation has been orchestrated by the military junta with the aim to rid Thailand’s politics of the Shinawatra family and close allies before ‘democracy’ is restored after a new constitution (likely to reduce democratic accountability) is endorsed and the king’s succession (likely in the coming years) arranged. The fact that the military junta does not work as pledged at the country’s reconciliation will only exacerbate Shinawatra ‘red-shirt’ supporters’ resentment and anger against the army and the middle urban class. So far, they have remained calm under martial law but violent protests and unrest will definitely occur sooner or later, thereby maintaining political instability risks. Meanwhile, the formerly ruling PTP party could eventually have to tackle the difficult issue of turning the Shinawatra page and appointing a new leader by the time the next elections are held, probably in 2016.

Analyst: Raphaël Cecchi, r.cecchi@credendogroup.com