Thailand’s May 2023 general election resulted in an unexpected alliance between former Prime Minister Thaksin Shinawatra and the royalist conservative establishment to prevent the Move Forward Party (MFP) from taking power.
Thaksin’s Pheu Thai Party, led by Prime Minister Srettha Thavisin, was granted the power to form the government, with support from military-aligned parties and senators. Thaksin was granted a partial royal pardon and allowed to return to Thailand.
However, controversy surrounds this alliance, as it is perceived to betray its initial pledge to uphold a pro-democracy alliance with the MFP. The conservative establishment serves as the sole guarantor of Thaksin’s security and holds the power to make or break the Pheu Thai-led government.
Pheu Thai must protect its establishment from MFP’s reformist efforts and pro-democracy movements while restoring trust among its supporters. To navigate these seemingly incompatible objectives, the Pheu Thai government prioritized economic agendas over controversial structural reforms.
Upon assuming power, the government implemented short-term economic measures, such as 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.
Critics have criticized Pheu Thai’s digital wallet scheme, which aimed to evoke Thaksin-style economic-populist policies. The scheme has faced significant setbacks, including pushbacks from technocrats and implementation delays due to funding issues. To manage costs, the government revised the scheme’s eligibility criteria, excluding individuals with monthly income exceeding 70,000 baht or bank deposits exceeding 500,000 baht.
This adjustment reduced the estimated cost from 548 billion to 500 billion baht, but concerns about fiscal discipline, capital outflows, and the possibility of a credit downgrade remain. The decision to finance the scheme through government borrowing has raised further concerns about potential delays and impasses due to legal, legislative, and constitutional challenges.
Prime Minister Srettha, who holds limited de facto power, has shifted his focus to the international arena to foster economic development. He has advocated for the 1 trillion baht Landbridge megaproject to connect the Andaman Sea to the Gulf of Thailand.
However, there is little sign that these initiatives will translate into substantial economic or political breakthroughs. This business-first strategy has raised concerns that Thailand’s foreign policy may prioritize economic imperatives over a balanced approach to international diplomacy and security, exemplified by the problematic Chinese submarine-turned-frigate procurement deal.
The Thai government’s risk of failing to fulfill economic promises has increased the importance of maintaining a favorable standing with the conservative establishment. This has strained relations between Pheu Thai and the MFP, with Pheu Thai distanced 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 former MFP leader Pita Limjaroenrat and the party, involving alleged media company share ownership and attempts to amend the lese majeste law, are expected to conclude by January 2024.
This could result in Pita’s disqualification, MFP dissolution, and executive members facing political bans, potentially triggering backlash from the pro-democracy camp. After May 2024, Pheu Thai may attempt to nominate Thaksin’s daughter, Paetongtarn, as prime minister to succeed Srettha, potentially breaching the initial terms of the alliance and testing the staying power of Thailand’s new elite pact.
