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 Protesters have been trying since November to oust Prime Minister
Yingluck Shinawatra, whom they see as a stand-in for her brother,
Thaksin Shinawatra, the self-exiled former premier who clashed with
the establishment and was ousted in a 2006 coup.
Yingluck called a general election on February 2 to try to end the
demonstrations, but protesters succeeded in disrupting the vote in
about a fifth of constituencies, meaning there is not yet a quorum
to open parliament and install a new government.
"Voting for constituencies where elections could not take place on
February 2 will take place on April 27," Election Commissioner
Somchai Srisutthiyakorn told reporters.
The protesters, who are mainly drawn from Bangkok and the south and
are backed by the royalist establishment, say former telecoms tycoon
Thaksin has commandeered a fragile democracy with populist policies
to woo poor voters in rural areas, ensuring victory for his parties
in every election since 2001.
The protest group, the People's Democratic Reform Committee (PDRC),
wants Yingluck to step aside, with political and electoral reforms
drawn up by a "people's council", which they hope would rid Thailand
of Thaksin's influence for good.
Members of the group prevented voting in much of the south and in
parts of Bangkok, strongholds of the opposition Democratic Party,
which boycotted the vote and threw in its lot with the protesters.
GOVERNMENT PARALYZED
Much of normal government business has been paralyzed since the
protesters took over parts of Bangkok in November, and the drift has
been compounded since Yingluck dissolved parliament in December and
became head of a caretaker administration.
The authority of a caretaker government to initiate new spending and
political programs is limited, and there is confusion in Bangkok
about the constitutional powers of different branches of government.
Highlighting the uncertainty, Election Commissioner Somchai had told
Reuters earlier that there were doubts over the legality of
restaging voting and the whole election might have to be voided and
re-run.
The drift and deadlock has also started to affect spending plans,
raising concerns that it could drag on the economy.
The World Bank highlighted worries about delays to much-needed
infrastructure policies, although it still sees the economy growing
4 percent this year — a more optimistic reading than Thailand's
central bank, which has slashed its growth forecast to 3 percent and
warned it could be worse if the protests drag on.
Yingluck's Puea Thai Party is strong in the populous, rural regions
of the north and northeast and helped win votes there in the 2011
general election with a subsidy program that offered farmers a price
way above the market for rice.
However, that program has run into funding problems and hundreds of
thousands of farmers have been waiting months for payment from the
state. Some are now protesting in Bangkok, although separately from
the political demonstrations.
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In recent weeks, big banks have refused to extend bridging loans to
help fund the program, unconvinced the government has the authority
to seek them, while China has cancelled a government-to-government
rice deal due to a corruption probe.
Finance Minister Kittirat Na Ranong said the farmers would get paid
but appealed for time to arrange bank financing.
"The government believes it could complete the rice loan in a few
days' time," he told reporters ahead of a cabinet meeting. "We need
to reassure financial institutions that the rice loan will not
breach the law."
Under an interim administration the Election Commission is in charge
of approving certain government spending from the central budget.
RICE SCHEME NOT RENEWED
After the cabinet meeting, Commerce Minister Niwatthamrong
Bunsongphaisan said the cabinet had approved taking 712 million baht
($22 million) from the state budget to pay some farmers.
"We expect the Election Commission will approve it very soon because
it's a problem for farmers," he told reporters.
But commissioner Somchai said the election body does not have the
authority to approve budgetary changes that may affect an incoming
government, adding that banks dared not lend out money to the
government.
"Every single bank is afraid because they know if they lend to the
government for its rice scheme they would be violating the
constitution," Somchai said. "What worries them even more is that
their clients may panic and start withdrawing their savings from the
bank."
Some form of rice-support scheme has existed in Thailand for
decades, rolled over into successive crops under governments of all
leanings. But that may end this month, adding to the anger of
farmers.
"We are just a caretaker government, which has no power to extend
any policy. The rice-buying scheme will end automatically on
February 28," Varathep Rattanakorn, a minister in the prime
minister's office, told Reuters.
The rice program was one of the populist policies associated with
Thaksin, who has lived abroad since 2008 to avoid a two-year jail
term on a graft conviction he said was politically motivated.
($1 = 32.8150 baht)
(Writing by Alan Raybould and Alex Richardson;
editing by Robert Birsel)
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