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 Thailand is stuck in political limbo following the dismissal of
Prime Minister Yingluck Shinawatra and nine of her ministers on May
7 after a court found them guilty of abuse of power.
Six months of turmoil that has included violent protests and a
disrupted general election is dragging down Southeast Asia's second
biggest economy, which shrank 2.1 percent in the first quarter of
the year.
Commerce Minister Niwatthamrong Boonsongphaisan has replaced
Yingluck as caretaker prime minister, but the anti-government
protesters say he has no legal standing and they want a "neutral"
government to push through reforms.
Niwatthamrong met members of the Senate, which is trying to come up
with a way out of the deadlock, but he told them he would not
resign.
"The current cabinet is legal in every way ... it must stay until a
new cabinet of ministers is elected in. We cannot install another
prime minister while we have an acting one in place," Niwatthamrong
said in statement following the meeting.
Thailand has not had a functioning lower house of parliament since
Yingluck dissolved parliament in December.
 Bangkok is the scene of a tense stand-off between government
supporters loyal to Yingluck and her brother, ousted former Prime
Minister Thaksin Shinawatra, and opposition demonstrators drawn from
Bangkok's middle class and royalist establishment.
The upper house Senate, the country's only remaining legislative
body, says it could select an interim prime minister but it wants
the caretaker government to step down first.
That has incensed protest leader Suthep Thaugsuban, who wants the
caretaker government removed right away.
"We will take democratic power and hand it back to the people,"
Suthep, a former deputy prime minister in a government run by the
pro-establishment Democrat Party, told supporters late on Sunday.
"From Monday, we will chase the remnants of the Thaksin regime out.
Ministers, resign! You are stunting Thailand's progress," said
Suthep, who has promised to surrender to the authorities on May 27
if this final push does not succeed.
RECESSION LIKELY
Weak exports and the political mayhem has damaged the economy, which
shrank by 2.1 percent in January-March from the final quarter of
2013, according to state planning agency data released on Monday.
The agency cut its forecast for 2014 growth to between 1.5 and 2.5
percent, from a range of 3.0 to 4.0 percent.
 It noted that public investment was 19.3 percent lower than a year
before as the caretaker government has no authority to begin new
projects, while private sector investment fell 7.3 percent as
business confidence slumped. "It's likely there'll be recession in the second quarter because all
the figures came in bad," said Pragrom Pathomboorn, an economist
with KGI Securities, adding that much would depend on how events
unfolded in coming days.
"If it drags on without a functioning government in the third
quarter, we think the economy will grow just 0.8 percent this year."
Adding to the caretaker governments woes, a confederation of labor
unions representing workers in around 20 Thai state firms sided with
protesters by calling for a strike this week.
"The ministers who remain refuse to resign, so we ask that state
labor unions go on strike as of Thursday," said Komsan Thongsiri,
secretary-general of the State Enterprises Workers' Relations
Confederation.
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"Many are still discussing whether they will strike. But, big state
organizations, including utilities and transport companies, have
often sided with us. RED SHIRT WARNING
The government and its supporters view a general election as the
best way to solve the crisis - the ruling Puea Thai Party would be
well placed to win - but a vote tentatively scheduled for July 20
looks to be off the table.
A February 2 election was disrupted by Suthep's supporters and then
declared void by the Constitutional Court. The protesters say they
will disrupt any vote before changes to the electoral system are
pushed through.
Thaksin was ousted by the army in a 2006 coup and convicted of abuse
of power in 2008. He now lives in self-imposed exile. His enemies
accuse him of being a corrupt crony capitalist who controls
governance through "money politics".
Thousands of Thaksin's "red shirts" loyalists have been camped out
in Bangkok's western outskirts to oppose any efforts to install an
unelected prime minister.
Fuelling their anger, Monday marked the fourth anniversary of a
deadly crackdown on red shirt protesters by the Democrat-led
government in which Suthep was a deputy prime minister.
In 2010, red shirts demonstrated for weeks demanding that then Prime
Minister Abhisit Vejjajiva call a fresh election. More than 90
people, most of them protesters, were killed.
Both Abhisit and Suthep face murder charges for their role in
ordering the military to end the protests.
 "We will safeguard the people's power until our last breath," red
shirt leader Jatuporn Prompan told supporters on Monday. The army has tried to stay out of the fight this time, but
in a rare televised announcement last week the army chief said it
would have no choice but to use "full force" if government
supporters and opponents clashed.
The political divisions are poisoning virtually every aspect of
society.
Thailand's newly crowned candidate for the Miss Universe pageant,
Weluree Ditsayabut, 22, has outraged the red shirts after
disparaging remarks she posted on Facebook. "I am so angry at these
evil activists. They should all be executed," read one comment. She
apologized on Monday, media reported.
(Additional reporting by Orathai Sriring, Kitiphong Thaichareon,
Pairat Temphairojana Khettiya Jittapong and Manunphattr
Dhanananphorn; Editing by Alan Raybould, Robert Birsel and Alex
Richardson)
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