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Jockeying starts for posts in new Thai government
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Jockeying starts for posts in new Thai government
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Prime Minister-elect Yingluck Shinawatra of the Puea Thai Party addresses reporters at her party's headquarters in Bangkok July 5, 2011. Jockeying for ministerial posts in Thailand's new government began on Tuesday as Prime Minister-elect Yingluck Shinawatra seeks to deliver on billions of dollars of populist campaign promises that critics say will fuel inflation.
Credit: Reuters/Damir Sagolj
By Michael Perry and Pracha Hariraksapitak
BANGKOK |
Tue Jul 5, 2011 3:35am EDT
BANGKOK (Reuters) - Thailand's Prime Minister-elect Yingluck Shinawatra said on Tuesday it was too early to decide on her new cabinet as intense jockeying for posts started and investors expressed concern her populist policies would fuel inflation and see rates rise.
Yingluck's choice of ministers must also calm investor concerns of possible cronyism and pacify critics who fear a return of her divisive brother, Thaksin Shinawatra, after their Puea Thai Party won a landslide victory in Sunday's election.
"At this time there have been no consultations about the cabinet," Yingluck told reporters, adding the Election Commission had still to endorse the election results.
A cabinet dominated by pro-Thaksin ministers could weaken Yingluck's calls for reconciliation after six, often bloody, years of political crisis.
"Yingluck's most urgent and challenging task is to dispel the climate of mutual suspicion among differing political stripes," said the Nation newspaper columnist Avudh Panananda.
"How Yingluck chooses to fill defense, interior and justice portfolios will be a litmus test of her leadership."
Achieving reconciliation will not be easy. Thailand is still bitterly divided between pro- and anti-Thaksin camps and another confrontation is widely seen as inevitable at some point.
A billboard was erected on a Bangkok highway on Tuesday alluding to the possible return of the self-exiled Thaksin and a whitewash of his graft conviction. A pro-Yingluck government poster on the other side of the road said: "Elite bureaucrats, stop meddling, Thais have made choices."
Sunday's election result was seen as a rejection of Thailand's traditional establishment of generals, "old money" families and royal advisers who backed the out-going government.
Thailand's powerful military has said it will accept the result, adding to a sense of stability in a country plagued by unrest since the army staged a 2006 coup to oust Thaksin.
But many believe that while there may be short-term stability, the medium to longer term remains uncertain, especially if the new government issues a general amnesty for political offences, allowing Thaksin to return home a free man.
INFLATION WORRIES
Economists and some media said Yingluck's most pressing issue was to manage Southeast Asia's second-largest economy and not to be distracted by national reconciliation issues.
Yingluck plans to roll out Thaksin-style populist programs that could fuel public spending and inflation -- from subway extensions and high speed trains to big wage increases and giveaways aimed at boosting spending power, especially in rural areas.
"Yingluck is a political novice. The attention will shift quickly to her choice of an economic team and policies," said Wellian Wiranto, an economist for HSBC in Singapore.
"The increased government spending is something to watch closely. The central bank has been rather explicitly warning against it," said Wiranto.
The Bank of Thailand may tighten monetary policy faster than thought this year to tame inflation expected to accelerate under a Puea Thai government, a Reuters Poll of economists found.
The central bank's benchmark interest rate, the one-day repurchase rate, may rise to 3.75 percent by the end of the year, they said.
Economists also warned that a boost in spending risks a creep-up of in debt-to-GDP ratio from about 42 percent now to above 60 percent in six years. By law, public debt must not exceed 60 percent of gross domestic product.
KEY MINISTRIES
The traditional scramble by coalition partners for cabinet jobs, known as "the stampede to snatch the rice bowls," had begun, newspapers said on Tuesday.
Puea Thai won an estimated 264 seats in the 500-seat parliament and could govern alone, but Yingluck, who will be Thailand's first female prime minister, has said she would form a five-party coalition controlling 299 seats.
The move to form a coalition is seen as a way of projecting an image of broad parliamentary support for Puea Thai and easing political friction as it seeks to implement policies.
But Thai media was divided on who would be in the new cabinet, saying the key and most powerful posts covering security and the economy would stay in Puea Thai hands.
The Nation said "No Reds in new cabinet," referring to the pro-Thaksin "red shirts," who clashed with the military in Bangkok in 2010, leaving 91 people dead. Several of the group's top leaders ran as Puea Thai candidates and won seats.
The Bangkok Post said Thaksin, now living in Dubai, may vet cabinet positions, and that moves were afoot for his return, but that it would not be rushed and may take a few years.
But Yingluck said her cabinet would be inclusive.
"We will not exclude anyone, be he an insider or outsider. We will do our best in vetting candidates despite the limitation on the choices," she said.
"I believe that different groups in the party can reach mutual agreement as everyone has in mind the efficiency of our work."
Under Thailand's constitution, the new government could take weeks to be formed and then has to be approved by the 83-year-old King Bhumibol Adulyadej.
(Additional reporting Vithoon Amorn in Bangkok; Editing by Alan Raybould and Robert Birsel)
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