More than two-thirds of Thai citizens who have been living under military rule for the past five years will cast their votes in the 24 March general elections. Here is what you need to know about the elections, the potential outcomes (plus what shouldn’t be ruled out), and how these could impact your business in the coming months and years.

The prize (and how to get it)

Whoever triumphs in the 24 March elections gets to form a new civilian government that will preside over Thailand for the next five years. Constitutional rules dictate that the party – or more likely, combination of parties – with a simple majority of seats (250) in the 500-member House of Representatives (lower house of parliament) will form the government.

Prime ministerial aspirants will also need 250 votes in the lower house to land the coveted role. If none of the candidates manages to get 250 votes, both the lower house and the 250-member Senate (upper house of parliament) will vote to select the prime minister. In this scenario, the winning candidate needs at least 376 votes.

The (big) catch

These rules will favour military-backed parties over traditional political parties, and bolster the military’s grand plan to exercise strong influence over future civilian governments. A newly introduced voting system now makes it harder for any single party to win an outright majority of lower house seats – which only parties affiliated with former prime minister Thaksin Shinawatra (2001-06), including the Puea Thai Party ousted in the May 2014 coup, had managed to do in the past four elections. A minority coalition government is the most likely outcome and is typically associated with intense horse-trading and internal bickering – perfect for a military looking to divide and conquer its political rivals.

A fragmented lower house also plays into the military’s plan to secure the prime ministerial post, in that it is less likely that there will be a simple majority within the lower house for any single candidate to take the post. Without that simple majority, the vote will go to both the lower and upper houses. The Senate will comprise mostly of junta appointees, which means that the military will have a guaranteed 250 of the 376 votes it needs to secure the post for its preferred candidate. It therefore only needs 126 (out of 500) votes in the lower house for its candidate.

Even if traditional political parties somehow get their act together and overcome inter-party differences to form the government and choose the prime minister, their coalition government will still be highly exposed to external interference in the coming years. The Senate will effectively act as a military veto on bills, policy reforms and government appointments. Thailand’s courts and unelected bodies (such as the National Anti-Corruption Commission, the country’s top anti-graft body) have expanded powers to investigate and prosecute elected office-holders for negligence, malfeasance and even the slightest deviations from the junta’s legally binding 20-year National Strategy reform plan. Needless to say, another military coup is plausible.

The contenders

There are four main political forces that present a credible electoral challenge. The outcome of the elections and the make-up of the next civilian government will depend on two factors: how these forces perform independently, and – less obviously – how they align with or against one another after preliminary results are revealed.

Here is a quick run-down of the main contenders:

  • Palang Pracharat Party (PPRP): Set up by pro-military individuals and headed by four former junta ministers, PPRP is the junta’s main vehicle for establishing a foothold in parliament under the next civilian government. PPRP supports junta leader and incumbent prime minister Prayuth Chan-ocha’s return to power to the same position after elections. PPRP hopes to make gains in the north and north-east via candidates who have defected from Puea Thai.

  • Puea Thai Party: Victim of the May 2014 military coup, Puea Thai – together with Thaksin – has been eager to make a political comeback for the past five years. It is counting on its enduring popularity with voters in the north and north-east, as well as broader anti-military discontent, to return to power. Given that Puea Thai and its predecessors have won every election since 2001, it feels that it has reason to be optimistic.

  • Future Forward Party (FFP): Headed by businessman-turned-politician Thanathorn Juangroonruangkit, this party is looking to propel itself into government on the back of anti-military discontent and long-running apathy with traditional parties, such as Puea Thai and the Democrat Party (DP). FFP’s chances lie with its ability to tap into the youth vote, which constitutes a quarter of the electorate.

  • Democrat Party (DP): Led by former prime minister Abhisit Vejjajiva (2008-11), the DP is Thailand’s oldest political party and closely associated with the Bangkok elite. Its power base traditionally lies in Bangkok and the south. Its electoral track record is less than stellar, having finished second to Thaksin-backed parties in the past four elections. The DP finally managed to break Thaksin’s stranglehold on power in 2008 – but only after the Bangkok establishment dissolved the then-ruling pro-Thaksin party.
What will probably happen…

Puea Thai will be the best performing party, and will secure between 130 and 200 seats. The DP will win between 80 and 120 seats, while PPRP will come in third place with up to 70 seats 

Despite having the most seats out of all the parties, Puea Thai will struggle to attract support from other parties to form a non-military aligned coalition government. Although a Puea Thai-DP alliance would comfortably carry both parties into government, the DP regards such collaboration with Puea Thai as political anathema. Puea Thai will almost certainly reach out to smaller parties, but these are highly opportunistic players and will go with the highest bidder – meaning the side that is willing to promise the most number of cabinet positions and ministries in the new government. The military has also been trying to persuade these parties to side with PPRP or risk retaliation. Given that the military will continue to have access to state levers after elections, this risk of retaliation will likely weigh heavily on the minds of the smaller parties. 

Ultimately, we expect a DP-led coalition that includes PPRP to prevail and form the new government, while Puea Thai is consigned to the opposition for the second time in 11 years.  

…but what you shouldn’t rule out

Despite the odds stacked against it, a Puea Thai-led coalition government may still emerge, especially if the DP and PPRP do worse than expected. The botched nomination of Princess Ubolratana Rajakanya as a prime ministerial candidate in February, which was easily the most surprising political development in the past year, only underscores the unpredictability of Thai politics. 

The DP is facing renewed criticisms over its perceived hypocrisy of criticising the junta for being anti-democratic and yet holding out the possibility of forming a coalition government with PPRP. Perceived attempts to undermine anti-junta parties, including the dissolution of the pro-Thaksin Thai Raksa Chart Party (TRC) on 7 March, could seriously backfire and hurt PPRP’s prospects – similar to what happened to the then-ruling Barisan Nasional (BN) coalition in neighbouring Malaysia in May 2018. 

Other wild cards

The road between 24 March and 9 May, when the Election Commission (EC) is due to announce the finalised election results, is a long one riddled with risks. Preliminary voting results are likely to emerge soon after polling day, and strong signs of a Puea Thai victory could prompt further external meddling. This could take the form of decisions to invalidate Puea Thai wins in constituencies, ban their candidates from politics and conduct revotes. More radical possibilities include nullifying the entire election results and setting a new date for a national revote, or worse, a military coup led by army chief Apirat Kongsompong – who is on good terms with Prayuth and the king – that seeks to delay the return to civilian rule. A potential pretext for such a coup is the military’s decision to protect the nation from threats to the monarchy ahead of the king’s coronation on 4-6 May. 

Even if the military accepts the reality of a Puea Thai-led winning coalition, the formation of a new government could face lengthy delays stretching into late 2019. The longer the anti-Puea Thai camp is able to orchestrate such delays, the more time it has to try and fracture that coalition through carrots and sticks – bearing in mind that the current regime will continue to have access to the all-powerful Section 44 of the constitution to dictate its will, as long as there is no new government. 

Why businesses should be concerned

The violent and highly disruptive repercussions of political conflict in Thailand since 2008 should convince even the most sanguine among us that the implications of the elections for businesses will be anything but academic.  

Immediate risks

Unrest risks will remain largely contained ahead of the king’s coronation in early May; political parties, even Puea Thai, would not want to be seen as disrespecting the monarchy by protesting on the streets. But all bets are off after that milestone. Large-scale protests in Bangkok – whether by Puea Thai supporters or their opponents – will escalate incidental security risks and the likelihood of operational disruption for businesses with a physical presence there or which rely on supply chains passing through the capital. Retail and hospitality businesses are likely to experience weaker demand for the duration of street confrontations and physical occupation of key intersections in downtown Bangkok. Prominent property developments co-owned by local Thai partners closely associated with the royalist movement are exposed to arson attacks and vandalism. 

Medium-term risks

Political turmoil in Bangkok also means that the military and civilian authorities will remain susceptible to popular pressure to indefinitely delay or scrap projects which are locally unpopular, and to erect new regulations that impose higher environmental compliance standards. Power (especially coal) and mining sectors remain the most vulnerable to state interference. In the event that a Puea Thai-led government is formed, investment deals signed under the junta in the past five years are likely to be exposed to risks of government scrutiny and politicisation, which could lead to contract revisions and suspensions. 

Long-term risks

Any excessive military interference with politics – such as the formation of a military-backed government without the popular vote, or another military coup – will elevate the risks of Western sanctions. These are likely to initially target key government and military leaders, then expand to wider trade and diplomatic sanctions. Western countries that are deeply critical of Thailand may begin to “name and shame” Western investors in Thailand in a bid to pressure them to scale down their investments, which carries significant reputational and compliance risks for investors. 

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