Author: Napon Jatusripitak, ISEAS–Yusof Ishak Institute
Thailand’s May 2023 general election produced an unexpected alliance between former prime minister Thaksin Shinawatra and the royalist conservative establishment. This was part of the deal to prevent the Move Forward Party (MFP), the election winner widely seen as a threat to the establishment, from taking power.
To inhibit the MFP, Thaksin’s Pheu Thai Party was allowed to form the government with Prime Minister Srettha Thavisin, supported by military-aligned parties and senators. Thaksin was permitted to return to Thailand and granted a partial royal pardon.
Much of the controversy surrounding this alliance stems from Pheu Thai’s perceived betrayal of its initial pledge to uphold a pro-democracy alliance with the MFP. The cost Pheu Thai must now bear in exchange for securing a path to power, Thaksin’s return and legal immunity may be the erosion of its autonomy as a political party and its circumstantial reputation as a champion for democracy.
The conservative establishment currently serves as the sole guarantor of Thaksin’s security and holds the power to make or break the Pheu Thai-led government. Essentially, this alliance serves as a check on Thai democracy itself, rather than a compromise forced on the establishment following a political stalemate.
Pheu Thai now faces the delicate task of safeguarding the establishment against the reformist efforts of the MFP and the broader pro-democracy movements, while rebuilding trust among its supporters, many of whom believe the party has strayed from its principles. In navigating these seemingly incompatible objectives, the Pheu Thai government has chosen to prioritise economic agendas over controversial structural reforms.
Upon assuming power, the government swiftly implemented a series of short-term economic measures, including an agricultural debt moratorium, energy and electricity cost subsidies, reduced fares for Bangkok’s electric train lines and a temporary visa exemption for tourists from designated countries. But many of these ‘quick-win’ initiatives faced criticism for failing to address underlying systemic issues and incurring excessive fiscal burdens.
These criticisms extend to Pheu Thai’s 10,000 baht (US$285) digital wallet scheme, which the party vigorously campaigned on to evoke the spirit of Thaksin-style economic-populist policies that once resonated strongly with rural and working-class supporters. This policy initiative has encountered significant setbacks, ranging from pushbacks from technocrats to implementation delays due to complications in securing adequate and legally sound funding sources. To manage costs, the government revised the scheme’s eligibility criteria, excluding individuals with a monthly income exceeding 70,000 baht (US$2000) or bank deposits exceeding 500,000 baht (US$14,273).
Though this adjustment reduced the estimated cost from 548 billion (US$15.6 billion) to 500 billion (US$14.2 billion) baht, concerns about fiscal discipline, capital outflows and the possibility of a credit downgrade for Thailand remain. The decision to finance the digital wallet scheme through government borrowing, departing from the initial strategy of using the annual budget or off-budget loans from a state-owned bank, has raised further concerns about potential delays and impasses due to legal, legislative and constitutional challenges.
Confronted with policy hurdles and faulty economic engines, Srettha, who holds limited de facto power as prime minister and leads a government dominated by coalition partners, has found it necessary to shift his focus to the international arena as a means to foster economic development. Throughout his international appearances, including the Belt and Road Initiative summit in Beijing, the Asia-Pacific Economic Cooperation summit in San Francisco, and the ASEAN-Japan Commemorative Summit, Srettha proactively courted foreign investments and advocated for the 1 trillion baht (US$28.5 billion) Landbridge megaproject to connect the Andaman Sea to the Gulf of Thailand.
Yet there is little sign that these initiatives, which earned Srettha the nickname ‘salesman prime minister’, will translate into substantial economic or political breakthroughs. On the contrary, this business-first strategy has raised concerns that Thailand’s foreign policy may increasingly prioritise economic imperatives over a balanced approach to international diplomacy and security, exemplified by Thailand’s problematic Chinese submarine-turned-frigate procurement deal.
Ultimately, the risk of this government failing to fulfil its economic promises has heightened the importance of maintaining a favourable standing with the conservative establishment in order to remain in power. This development has strained relations between Pheu Thai and the MFP. While there is room for potential collaboration on advancing specific agendas, such as legalising same-sex marriage, Pheu Thai has distanced itself from the MFP’s efforts to push for a constitutional overhaul, amend the lese majeste law and call for political amnesty.
The ongoing legal cases against the former leader of the MFP Pita Limjaroenrat and the party itself — involving alleged media company share ownership and attempts to amend the lese majeste law — are expected to conclude at the end of January 2024. The outcomes could result in Pita’s disqualification, MFP dissolution and executive members facing political bans, potentially triggering backlash from the pro-democracy camp, with Pheu Thai caught in the crossfire.
After May 2024 — when the current junta-appointed Senate’s term ends and the prime minister is chosen exclusively by members of parliament in the House of Representatives — Pheu Thai may attempt to nominate Thaksin’s daughter, Paetongtarn, as prime minister to succeed Srettha. Such a move might be viewed as overstepping or breaching the initial terms of the alliance that underpins the current government and would test the staying power of Thailand’s new elite pact.
Napon Jatusripitak is Visiting Fellow at the ISEAS Yusof–Ishak Institute in Singapore.
