Around 60% of Thai voters have approved the military’s draft Constitution and the Senate appointing the PM after a peaceful referendum with an unusually low turnout (58%) showing low enthusiasm within the population.
It paves the way to general elections that are scheduled for the end of 2017 at the earliest and will be the first polls since the military coup in May 2014.
Impact on country risk
This is a great victory for the military junta which came to power in spring 2014 to ensure a smooth royal succession when the old king dies. The controversial Constitution legally grants a key role for the military in the political system through a powerful military-selected Senate and will cut future government powers whatever the magnitude of electoral victories.
Though the population is opposed to a military rule (but supports its ability to fight against corruption in the political class), the large success at the referendum indicates its fatigue with an unstable and uncertain political system and polarised forces which favour a state of endless and recurrent instability periods and consequently affect the economy and policy-making.
The popular Pheu Thai Party (PTP) led by the Shinawatra family is the obvious major loser from this Constitution, but the same might be said for the royalist and urban Democratic Party as well, as any future elected civilian coalition government will be weak. More fundamentally, democracy is much weakened after decades of democratic rule interrupted by sporadic military coups.
In the short term and until elections are held, political and domestic stability should be ensured given the popular support for the new Constitution and the expectedly maintained military grip on civil society. Current PM and junta leader Prayuth Chanocha, the first winner of the referendum, appears to be the favourite future PM.
The economy is likely to gain from enhanced stability, especially investor confidence after three years of disappointing performances, unless recent bomb attacks from Muslim separatists in tourist destinations in the South affect tourism and the economy.
Medium- to long-term stability is questionable with governments constrained by the military and having limited powers which might frustrate voters, especially among PTP supporters.
Country risk analyst Raphaël Cecchi , Credendo Group
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