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Edition: U.S. Article Comments (2) Slideshow Video Full Focus Editor's choice A selection of our top photos from the past 24 hours. Full Article Follow Reuters Facebook Twitter RSS YouTube Read Casey Anthony found not guilty of daughter's murder | 05 Jul 2011 Casey Anthony trial turned into media frenzy | 12:19am EDT Looking for answers, Casey Anthony's father bought gun 29 Jun 2011 Casey Anthony found not guilty of murder of daughter | 05 Jul 2011 Wayans brothers face trial for alleged joke theft 30 Jun 2011 Discussed 207 Minnesota government shutdown begins after talks fail 122 Obama: ending tax breaks required to cut deficit 102 White House snubs McConnell invitation to Obama Watched Casey Anthony found not guilty of murder Tue, Jul 5 2011 Casey Anthony found not guilty 2:53am EDT Obama on the debt limit 8:15am EDT Thai PM elect looks at economy, firms fear wage inflation Tweet Share this Email Print Related News Jockeying starts for posts in new Thai government Tue, Jul 5 2011 Thaksin's return divides Thailand after vote Tue, Jul 5 2011 Analysis: Thai election unlikely to end battle for power Mon, Jul 4 2011 Stunning Thai election win brings hope of stability Mon, Jul 4 2011 Thaksin party wins Thai election by a landslide Sun, Jul 3 2011 Analysis & Opinion Asia – A week in pictures 03 July 2011 Thai opposition win is good for growth Related Topics World » Thailand » Related Video Thaksin sister to lead Thailand Sun, Jul 3 2011 Opposition wins big, Thai stocks up 1 / 4 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 BANGKOK | Wed Jul 6, 2011 12:53am EDT BANGKOK (Reuters) - Thailand's prime minister elect, Yingluck Shinawatra, said she would hold a strategy meeting Wednesday to review urgent action to revitalize the economy, but business leaders fear her populist wage policies will spark a surge in inflation. Yingluck won a landslide election victory Sunday, backed by votes from the poor lured by promises such as wage rises, a household debt moratorium and better welfare and healthcare. "We will consider measures that can be taken immediately after taking office," said Yingluck, who will be Thailand's first female prime minister. Thailand's business leaders are worried that if her Puea Thai Party government implements all the big-spending policies, it will stoke price rises at a time when the economy is already struggling with inflation. One proposal is a nationwide minimum wage of 300 baht ($9.8) per day, as much as 90 percent higher than the current minimum set for each province around the country. That would be a huge amount for manufacturers to absorb, said Richard Han, CEO of integrated circuit packager Hana Microelectronics Pcl "Two things will happen: either they will make less money or they'll try to put their prices up and cause inflation ... This could put you on a (wage-price) spiral," he said. The Thai economy expanded a robust 7.8 percent in 2010 and is projected to grow 4.0-5.0 percent in 2011, fueled by strong export growth and increased consumption. But the central bank has sounded warnings about inflation, which hit 4.19 percent in May, its highest since September 2008. Economists expect the central bank to raise interest rates at its meeting on July 13 after seven increases since last July. Comments by Puea Thai's economic chief, Suchart Thadathamrongvej, a candidate to be finance minister, that Thailand should adopt a managed fixed exchange rate similar to that of Singapore or China will also concern investors, as they raise questions about central bank independence. "What we need, perhaps, is a clear foreign exchange formula in working out a competitive rate for the baht, perhaps based against a flexible basket of currencies," he told Reuters. That would mark a turnaround for Thailand, which abandoned a fixed exchange rate system in 1997 when it floated the baht against the U.S. dollar and other currencies. THAKSIN CASE TO BE REVIEWED 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 outgoing government. Analysts say the election should usher in a period of stability after six years of often bloody political crisis. Thailand's politically 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 coup in 2006 to oust then Prime Minister Thaksin Shinawatra, Yingluck's brother. But the question of whether Yingluck will seek the return of Thaksin, now living in self-imposed exile in Dubai after being convicted of abuse of power, remains an explosive issue. His return could again spark unrest in Thailand. Yingluck told CNN that Thaksin's case would be reviewed as part of national reconciliation efforts. Any move to include legal cases in an amnesty as well as political cases would be controversial. "I can't do anything special for my brother," she said, adding she would follow the rule of law. Thaksin would be jailed if he returned home without the new government granting him an amnesty. Thaksin still effectively controls Puea Thai and made his sister its leader shortly before the election, despite her never having held a political post. Many see Yingluck as his puppet. "Going back home is not a major concern. It's not a top priority. The priority is to bring back reconciliation," Thaksin told CNN in a separate interview. Puea Thai won 265 seats in the 500-seat parliament, according to the latest election tally, and could govern alone, but Yingluck will form a five-party coalition with 299 seats. Yingluck's decision to form a coalition is seen as projecting an image of broad parliamentary support and easing political friction as it seeks to implement policies. The new government will probably not be officially sworn in until early August after being approved by the king. (Additional reporting by Pracha Harirugsapitug; Editing by Alan Raybould) World Thailand Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (2) MattBkk wrote: Attaboy Yingluck! Ignore complaints from businessman and move forward with haste all your populist give away promises. So what if there is inflation . . . which would trigger business discontent or business shutdowns (loss of competitiveness) . . . and lots of jobs lost. You kept your promise and that’s important. And don’t forget your promise to give special amnesty to that very special guy Thaksin . . . your very special brother. OK? Jul 06, 2011 1:11am EDT -- Report as abuse vietnam2 wrote: @ MattBkk, you sound like a republicon. Maybe the people of Thailand are sick and tired of the business men making all the money off of cheap labor. According to the growth figures in thge article, sounds like the business economy is doing well, just NOT the people. Sound familiar? If you can GOOGLE? Google derivatives and read what your business men of Wall Street and phil gramm R TX have done to the world. Jul 06, 2011 1:31am EDT -- Report as abuse See All Comments » Add Your Comment Social Stream (What's this?) © Copyright 2011 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Mobile Newsletters RSS Podcasts Widgets Your View Analyst Research Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Super Lawyers Attorney Rating Service Reuters on Facebook Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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