Thaksin's Troubles

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Six months ago, thai Prime Minister Thaksin Shinawatra seemed indestructible. His approval rating soared to nearly 80% and his party clinched a landslide victory in February's parliamentary election. But in the past few weeks, Thaksin has started to look more vulnerable. Violence by Muslim separatists in the country's south has continued to escalate, and the economy has been bruised by December's tsunami as well as surging oil prices: GDP is now expected to grow 4.5% in 2005—down sharply from last year's 6.1%. A corruption scandal involving his Transport Minister has also hurt. A poll by Assumption University released last week reported that Thaksin's popularity has slumped to 46%.

But Thaksin is nothing if not a fighter, and last week he came out swinging on both the security and economic fronts. Following a series of bombings Thursday in the southern town of Yala that killed two people, Thaksin issued an executive decree giving himself the power to order arrests without warrants, ban arms possession, declare curfews and censor news reports. "We have to be decisive now," he said. Earlier in the week, the Prime Minister showered various sectors with pecuniary perks, including a 5% civil-service pay hike, a tax cut for businesses, $500 million in loans for rural villages, and a promise to increase the minimum wage. Critics contend that these policies will make little difference. "When you have drought, bird flu, stagnating tourism, decelerating growth in exports and a ballooning oil-import bill," says Chris Baker, co-author of Thaksin: The Business of Politics in Thailand, "I can't see how a small income stimulus is going to do anything." Thaksin's political rivals saw defensiveness in his actions. "He certainly seems to have lost the impression that he is invincible," says Abhisit Vejjajiva, leader of the opposition Democrat Party. Still, Abhisit concedes, "It would be premature to say that the PM could not recover."