The protesters, mainly from Bangkok and the south, have been
trying since November to oust Yingluck and rid the country of the
influence of her brother, self-exiled former premier Thaksin
Shinawatra who was toppled by the army in 2006.
The government imposed a state of emergency two months ago, but
largely resisted taking heavy-handed action, though 23 people have
been killed during the unrest, most in shootings and grenade blasts.
The protests have waned in recent weeks and are now mostly confined
to Lumpini Park in Bangkok's central business district and a few
But the threat of further violence remains real, especially after
changes at the top of the pro-Thaksin "red shirt" movement at the
weekend, with a new, more militant leader promising "to fight tooth
and nail" to defend Yingluck.
The emergency will be lifted from Wednesday after a decision taken
at a cabinet meeting held on Tuesday in Nakhon Pathom province,
about 80 km (50 miles) from Bangkok.
Yingluck arrived for the meeting in a wheelchair after slipping as
she stepped out of a car on Saturday in the northern city of Chiang
Mai, her stronghold.
"The cabinet lifted the state of emergency to instill more confidence
in the private sector and tourist industry," she told reporters.
In its place, the government will use the Internal Security Act, a
less harsh law that still allows the authorities to impose curfews,
operate security checkpoints and restrict the movement of protesters
"Lifting the emergency law should have a positive impact on
businesses. Many really felt the pinch and lost customers because
the state of emergency was in place, including tour operators who
saw huge cancellations," said political analyst Kan Yuenyong at Siam
"It should also improve the state's image because rights groups tend
to view the emergency law as draconian. But, ultimately, no law can
help the government contain the protests if they flare up again."
The stock market and baht currency rose slightly on the government's
move, which had been expected, although that was enough to take the
baht to a three-month high.
The government set the 60-day emergency from January 22 to help
contain protests in the run-up to a general election on February 2,
but most of its measures were barely used, especially after a court
ruled on February 19 that some had been imposed illegally.
[to top of second column]
The election in February was disrupted by protesters in almost 70 of
the 375 constituencies, leaving the House of Representatives without
a quorum to elect a new prime minister.
The Constitutional Court has accepted a petition to consider
annulling the election, which could further delay the formation of a
Yingluck, whose Puea Thai Party had been expected to win the vote,
heads a caretaker administration with limited powers. She faces a
slew of court cases that could bring her down, including a charge of
dereliction of duty over a rice subsidy scheme that owes money to
hundreds of thousands of farmers.
Tourism has suffered during the unrest. Arrivals were down 4.1
percent in January and February compared to the same high-season
period last year, according to the tourism ministry.
Pitaya Tanadamrongsak, managing director of Dongfeng Motors
(Thailand), a unit of China's Dongfeng Motor Corp that announced an
expansion in Thai vehicle production on Tuesday, told Reuters the
business community needed more than the lifting of an emergency
"In order for the country to be fundamentally strong, I think the
conflict has to stop ... I do hope the government and opposition
will find a conclusion and look forward," he said.
"Only by having a stable government can we really take advantage of
the AEC," he added, referring to a Southeast Asian economic
community set to start in late 2015 that Thailand ought to be well
placed to benefit from, given its export prowess.
(Additional reporting by Panarat Thepgumpanat and Pairat
Temphairojana; writing by Amy Sawitta Lefevre; editing by Alan Raybould and Simon Cameron-Moore)
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