Minister Pichai Chunhavajira’s Digital Wallet scheme failed to excite pundits. The announcement of upcoming Constitutional Court decisions on PM Srettha’s fate and the dissolution of the Move Forward Party adding to political uncertainty, instead deepened market’s woes.
A key announcement by Minister of Finance Pichai Chunhavajira detailing plans for the Digital Wallet scheme initiative went down like a dead balloon on Wednesday. In short, the controversial plan failed to excite the stock market and economic analysts. Instead, news confirming that the Constitutional Court will decide on the fate of Prime Minister Srettha Thavisin and his government had a greater impact. Combined with a decision by the court on August 7th regarding the dissolution of the Move Forward Party, it sets the scene for potential political upheaval.
The Thai stock market reached another low on Wednesday and Thursday, plunging below the psychological 1,300-point barrier.
The fall was particularly embarrassing as it came at the same time as Minister of Finance Pichai Chunhavajira confirmed details of the long-awaited Digital Wallet scheme.
The controversial stimulus measure involves offering a ฿10,000 digital credit to all Thai adults. Nonetheless, the market is increasingly less impressed with the plan.
Firstly, it is not seen as a sustainable remedy to Thailand’s household debt problem which has led to weak or anaemic purchasing power.
In short, what is required is a real rise in sustainable income levels.
Digital Wallet scheme concerns add to decline as Household Debt Crisis exacerbates Financial Woes
Secondly, the fund cost and sources for the plan remain questionable. Thirdly, the proposal is quite likely to lead to legal jeopardy for the government and top officials.
Indeed, a former Pheu Thai Party parliamentary leader Chalerm Yubamrung, on Wednesday, warned that a single lie or failure in its implementation will be disastrous for the party and the government.
Certainly, Mr. Chalerm, who is urging the party leader Paetongtarn Shinawatra to expel him after his son was previously removed from the ranks over a disciplinary issue, was confident that the current Thai government will fail shortly.
Certainly, the reason for the stock market decline is a range of factors. Not least, the lacklustre Thai economy. GDP figures for the second quarter are expected shortly. There are indications that the data is not good.
Constitutional Court update: Senate race gets the all-clear while PM and Move Forward must wait til July
Wrangling within the Pheu Thai Party came to the surface this week as bigwig Chalerm seeks his own expulsion
In the meantime, capital continues to flow out of Thailand.
The Stock Exchange of Thailand (SET) has lost ฿300 billion in the last seven months in value. Meanwhile, it has fallen 16.31% in the past twelve months. Just this year, it has dropped by 8.78%.
Despite the wide array of economic problems from cheaper Chinese dumping undercutting the manufacturing sector to sky-high household debt clogging up the kingdom’s purchasing power, it is presently also facing yet another political crisis.
Lacklustre Economy and Political Instability exert pressure on Thai Stock Market performance
According to Mr. Chalerm on Wednesday, the current government is doomed to fail.
He described the cabinet players as each having a gun behind their backs. In short, waiting to pounce when the opportunity presents itself.
Already this week, the embattled Prime Minister Srettha Thavisin was forced to climb down on the cannabis issue.
In short, he rescinded his May order to reimpose the drug. It is a move that runs counter to the public view on the issue. A recent poll showed 75.65% supported his stance.
Power of Anutin and Bhumjaithai grows as Pheu Thai and Srettha make an embarrassing U-turn on Pot
However, it is understood to be linked to pressure brought to bear by the Bhumjaithai Party. Its leader, Deputy Prime Minister Anutin Charnvirakul, had made clear his displeasure with the plan to roll back his significant achievement in the government of General Prayut Chan-o-cha.
Nonetheless, the circumstances for political upheaval now present themselves. The Constitutional Court is ready to adjudicate on two legal cases which could transform the political landscape.
On August 7th, it will decide whether to dissolve the Move Forward Party. The country’s most popular political party with over 49% support in recent opinion polls returned 151 MPs in the last election.
Dissolution of Move Forward Party could reshape Thailand’s Political landscape significantly
Notably, if the party is dissolved, a proportion of its MPs will, at the same time, be removed. The majority will join other parties or a new political vehicle.
Certainly, the biggest loss to the progressive movement will be the potential disqualification of Mr. Pita Limjaroenrat, the country’s consistently most popular choice for Prime Minister. Mr. Pita in the last National Institute of Development Administration (NIDA) poll, commanded 45.5% public support.
After that, a week later comes the Constitutional Court’s decision on the tenure of Prime Minister Srettha Thavisin. On July 24th, the top court guillotined its investigation into the matter under its procedures. In brief, it said the matter was a legal one.
Therefore, it scheduled an August 14th meeting at 9:30 am to discuss the case. Afterwards, at 3 pm a decision will be given by the court. It set July 31st as the deadline for closing statements from both sides.
The case brought by 40 outgoing senators from the last upper house centres on the controversial appointment of Mr. Phichit Chuenban as Prime Minister’s Office minister in April.
Previously a legal adviser to Thaksin Shinawatra, the debarred lawyer was sent to prison for 6 months by the court itself in 2008. That followed an attempt to bribe court officials with ฿2 million cash in a lunch box. This happened within the precincts of the court.
Potential Government upheaval as Prime Minister’s tenure to be decided by Constitutional Court
Notably, the case involved the prosecution of former Prime Minister Thaksin Shinawatra and his wife.
On Wednesday, former Senator Somchai Sawaengkarn said he was confident that the Prime Minister had breached the constitution by appointing a minister blatantly unfit for office under Section 160 (4) and (5) of the Constitution.
Therefore, his position in the government would be terminated under Section 170 (4) of the Charter. The Prime Minister would, in effect, be barred from holding office if his appointment is held to be an unethical act.
Mr. Somchai also pointed out that if Mr. Srettha is removed, then the cabinet will simultaneously fall.
Subsequently, it is understood Deputy Prime Minister Phumtham Wechayachai would act as interim office holder.
After that, the horse-trading between the political parties would begin in an effort to try to form a new government.
Meanwhile, the Pheu Thai Party would still be crucial to any new government if the Move Forward Party comes to be disbanded.
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Further reading:
Political maelstrom may be unleashed in June with potential crises brewing and coming to a climax
PM survives Constitutional Court’s call in a close run thing raising real questions over his future
PM Srettha Thavisin could be temporarily toppled from power on Thursday by the Constitutional Court
Digital Wallet plan blown out of the water by corruption body on Tuesday warning of illegality
