Monday, March 31, 2014

Thailand: Update--PM Defends Herself Before NACC, Decision Could be Weeks Away

According to Reuters, Prime Minister Yingluck Shinawatra, 46, on Monday (March 31) defended herself against negligence charges linked to a ruinous government rice pledging scheme that could lead to her removal from office, the latest development in a political crisis that has gripped the country for months.

The Central Bank said Southeast Asia's second-largest economy, heavily reliant on tourism, was expected to contract in the first quarter after consumption and investment fell.

Yingluck has been charged with dereliction of duty for overseeing the rice-buying scheme, a policy that brought her to power in the 2011 election with the help of the rural poor, yet that has since run up huge losses and left hundreds of thousands of farmers unpaid.

The charges were brought against her by the National Anti-Corruption Commission (NACC) which, should it forward the case to the Senate for possible impeachment, would mean Yingluck being suspended from official duties. 

It is unclear as to when such a decision will be made, but it could take weeks. 

COMMENT: First of all, my apologies to our readers. My forecast that the PM would not appear before the Commission was incorrect. 

Yingluck spent only 30 minutes at the commission's headquarters. Her legal team carried three cardboard boxes filled with documents to present to anti-graft officials. Her main defense document was 150-pages long.

Yingluck asked for more time to call on 10 witnesses and to submit further documents to support her defense, NACC member Prasart Pongsivapai told reporters following the meeting.

The Commission will decide on Tuesday whether to extend the deadline.

"The PM submitted documents in her defense and gave a short statement," said Prasart. "We have to consider whether (those) witnesses and documents relate to this scheme. The commission will act with justice toward the PM and in a straight-forward manner."

The Bank of Thailand's private consumption index dropped 1.2% in February from January and 2.5% from a year earlier. Its private investment index was 1.9% lower on the month and was down 7.7% on the year.

A news conference released information that growth could contract in the first quarter. 

"Overall economic activities in February 2014 softened further from the previous month owing to prolonged political protests. Households and businesses continued to hold back spending, while imports and manufacturing production contracted," the Bank of Thailand said in a statement.

Kasikorn Research cut its full-year growth forecast to 1.8% on Monday, down from 3% in January. It also predicted an economic contraction of about 2% in the first quarter of 2014 from the previous three months.

Thailand has essentially been in crisis since Thaksin was ousted in a 2006 coup.

Yingluck criticized the NACC last week for not giving her enough time to gather evidence and for fast-tracking the investigation.

Her allegations prompted the NACC to issue a statement defending the way it has handled Yingluck's case.

"Yingluck has received just and fair treatment (by the NACC) under the framework of the Constitution."

Thais voted on Sunday (March 30) for half of the country's 150-seat Senate in a key test of Yingluck's government. A Senate dominated by anti-government politicians could expedite her departure, but any decision to remove Yingluck would require the votes of three-fifths of the Senate. 

The results of the Senate elections are expected next week.