Thai Government Stability No Clearer After Tight Budget Vote

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Thailand’s government used its slim majority to get the annual budget bill through an initial parliamentary vote, but analysts remain divided on whether the outcome shows the coalition will survive future tests.

The 3.2 trillion baht ($106 billion) spending plan received the backing of 251 lawmakers, with 234 abstaining. Further votes are due in January to approve the budget, whose already delayed implementation adds to the risks facing Thailand’s slowing economy.

The bill’s fate is a test of the political risk from a bitterly divided and fragmented legislature. The government’s two-seat majority is subject to the whims of the more than one dozen parties in the coalition, and its policies are under fire from an opposition bloc that controls almost half the lower house -- and questions the administration’s legitimacy.

For Titipol Phakdeewanich, dean of the faculty of political science at Ubon Ratchathani University in northeastern Thailand, the initial budget vote “proves although this government has a slim majority, they can still get important agendas done.”

“It shows their ability to control the coalition in the lower house, and that they may not have problems voting on key bills in the future,” he said. “It’s an indication that they may last the full four-year term.”

Coalition Management

In contrast, Punchada Sirivunnabood, an expert on Thai politics and a Fulbright scholar at Northern Illinois University, said she expected more backing for the bill and that the number of supporters fell short of a level that would illustrate a secure administration.

“This means they might have some challenges in voting for other issues in the future,” she said. “There will be ongoing tests of the government’s ability to manage the coalition.”

When pressed by reporters in the aftermath of the vote Saturday about opposition threats to reject the budget, Prime Minister Prayuth Chan-Ocha said that “if the budget fails, it’s going to be a problem for the country.”

Former army chief Prayuth seized power in a military coup in 2014 and returned as premier at the head of a pro-military coalition after a disputed general election in March.

Some opponents see the current administration as a continuation of the junta he oversaw, leading to a deep schism in parliament.

The opposition faulted the budget for a lack of clarity on how some funds will be spent as well as the amount earmarked for defense.

“There needs to be a high majority, a commanding majority, to look legitimate,” said Paul Chambers, a Thai politics expert at Naresuan University’s College of Asean Community Studies. “This vote shows that every single member of parliament that’s part of the coalition matters.”

The budget uncertainty adds to the risks for Thailand’s trade and tourism-led economy.

The fiscal policy outlook will remain unclear until February 2020 at the earliest, according to Tim Leelahaphan, a Standard Chartered Bank economist in Bangkok.

Buffeted by a global slowdown and a strong currency, Thailand is on course for the weakest economic growth in 2019 in five years.

To contact the reporter on this story: Siraphob Thanthong-Knight in Bangkok at rthanthongkn@bloomberg.net

To contact the editors responsible for this story: Sunil Jagtiani at sjagtiani@bloomberg.net, Shamim Adam

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