Thai Premier Warns Protesters Against Disrupting Government

By Daniel Ten Kate

Jan. 25 (Bloomberg) -- Thai Prime Minister Abhisit Vejjajiva warned nationalists not to disrupt government functions as they begin an indefinite occupation of a Bangkok street today over a border dispute with Cambodia.

The People’s Alliance for Democracy, which mobilized tens of thousands of people when it seized Bangkok’s airports for eight days in 2008, will gather at 2 p.m. on a bridge less than a kilometer from Abhisit’s Government House office. The benchmark SET Index fell 0.7 percent as of 10:28 a.m. local time, after its biggest drop in 15 months yesterday.

“All parties should cooperate and act in line with the rules,” Abhisit told reporters in Bangkok yesterday. Protesters should “make sure they don’t harm the public and allow the government and Parliament to work as normal.”

The moves by the yellow-shirted protesters who backed Abhisit’s rise to power in 2008 and now say the government is ceding territory to Cambodia may undermine his efforts to prevent street clashes before an election he must call this year. Rival red-clad supporters of ex-leader Thaksin Shinawatra, whose occupation of downtown Bangkok last year led to at least 95 deaths, will gather nearby today and have vowed to hold competing bi-monthly rallies.

The People’s Alliance is demanding that Thailand drop out of the United Nations’ World Heritage Committee, cancel a 2000 agreement with Cambodia on border negotiations and urge Cambodians to withdraw from disputed border areas, leader Chamlong Srimuang said yesterday.

“We will gather indefinitely if Abhisit doesn’t come out to protect the country,” Chamlong told reporters in Bangkok. He didn’t rule out storming Government House in the days ahead as the group did three years ago.

Exchange Views

Abhisit said he wouldn’t bow to protesters’ demands because that would put the country “at risk of losing” contested land and may lead to fighting. “If we disagree, we need to talk and exchange views,” Abhisit told reporters in Bangkok yesterday. “I don’t see why we need to quarrel.”

Thailand’s SET Index fell 4.3 percent yesterday, its biggest drop since Oct. 15, 2009. The gauge has lost 7.5 percent since reaching a 14-year high on Jan. 6, joining regional neighbors from China to India in declining from recent peaks amid concern central banks will take extra steps to prevent their economies from overheating.

The baht slid 0.2 percent to 30.98 per dollar as of 8:19 a.m. in Bangkok, according to data compiled by Bloomberg. The currency touched 31.02, the weakest level since Sept. 9.

“The return of political tensions outside parliament would add to PM Abhisit’s worries and may lead to foreign portfolio outflows,” Standard Charted Plc said in a note today.

‘Buying Opportunity’

Global funds sold 4.05 billion baht ($131 million) more local shares than they bought yesterday, taking this month’s net sales to $955 million, according to stock exchange data.

The recent stock declines presented a “buying opportunity” as Thai equities are cheaper than others in the region and company earnings are off to a “good start,” Credit Suisse Group AG said today.

“We consider politics a potential positive catalyst, rather than a reason to sell,” analysts Dan Fineman and Siriporn Sothikul wrote in a report today. “We still see a good chance for elections as early as April-May and expect the government to surprise the market with its margin of victory.”

Thai lawmakers today will debate two minor changes to the constitution that would alter the composition of Parliament and make it easier to sign international treaties. Passage of the amendments would fulfill one of Abhisit’s conditions for calling an election ahead of an end-2011 deadline.

Voting System

Abhisit’s Democrat party received support from coalition members to increase the number of party-list seats to 125 from 100, and boost the total number of lawmakers to 500 from 480, Krungthep Turakij reported, without saying where it got the information.

In the last election in 2007, the Democrat party won the most party-list votes despite finishing with 68 fewer total seats than the pro-Thaksin party.

The People’s Alliance, led in part by a member of Abhisit’s party, ended six months of street protests in 2008 to force Thaksin’s allies from power when a court disbanded the ruling party. Abhisit took power two weeks later in a parliamentary vote, and appointed Kasit Piromya, who spoke at the airport while it was occupied, as his foreign minister.

Soldiers declined to enforce orders from a pro-Thaksin prime minister in 2008 to disperse the People’s Alliance from Government House or the airports. The army has twice used force since then to break up protests from Thaksin’s supporters, most recently in May when demonstrators turned down Abhisit’s offer to call an early election.

Relations between Thailand and Cambodia soured in 2008 when a Thai court ordered a Thaksin-linked government to withdraw support for Cambodia’s bid to list the disputed Preah Vihear temple as a World Heritage site. Gun battles in the area since 2008 have killed at least six soldiers.

--With assistance from Anuchit Nguyen, Suttinee Yuvejwattana, Supunnabul Suwannakij and Yumi Teso in Bangkok. Editor: Tony Jordan, Patrick Harrington.