(Bloomberg) -- Thailand’s pro-democracy parties notched a resounding victory in Sunday’s parliamentary vote, setting up the biggest challenge to the royalist-backed establishment since the military seized power in a coup nearly a decade ago.
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With 99% of the vote counted, the Move Forward party — an advocate of changing a law that restricts criticism of Thailand’s powerful monarchy — led both in total seats and popular votes. Together with Pheu Thai, which is linked to exiled former premier Thaksin Shinawatra, the pro-democracy parties were projected to rack up 287 of the 500 seats in the lower house.
Emerging as the biggest winner of the night, Move Forward leader Pita Limjaroenrat was greeted Sunday evening by supporters shouting “Prime minister! prime minister! prime minister!”
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“Based on the numbers we’re seeing, Pheu Thai and Move Forward and other opposition parties can form a coalition government,” Pita said in a briefing soon after polls closed, clarifying that no coalition talks had yet occurred. “The current opposition parties are the right answer for the people. We’ll stick to that message. There’s no need to include others.”
Even so, it’s unclear if the parties will be able to form a government. There’s 250 senators appointed by the military who also get a vote for prime minister, and other political parties may be reluctant to join with Move Forward due to its position on the monarchy. Perceived opposition to the royal family has been used as a pretext to dissolve political parties over the past few decades.
Either way, the result represents a challenge for the political establishment revolving around the monarchy, helmed by King Maha Vajiralongkorn. Move Forward was the only major party calling for changes to Article 112 to allow greater freedom to discuss the royal family, and it took 32 of 33 constituency seats in the capital Bangkok.
“This is a political earthquake,” said Thitinan Pongsudhirak, a professor at Chulalongkorn University in Bangkok.
“More Forward’s numbers attest to that testify to the people’s demand for change and reform, so it would behoove the establishment to make concessions and come to some kind of compromise instead of playing for keeps and risking everything,” he added.
Tensions around the role of the monarchy have been brewing since 2016, when Vajiralongkorn took the throne following the death of his father, King Bhumibol Adulyadej, who reigned for 70 years before passing away at the age of 88.
Investors appeared to bet that Move Forward’s win could lead to a stable government. The baht edged up against the dollar as Asian investors wake up to the Thai election results, trading around 0.5% stronger against the dollar at 33.83 as of 8:44 a.m. Hong Kong time, from around 0.2% at 7 a.m.
“There should be more stability than the market anticipated,” said Jitipol Puksamatanan, chief strategist and head of Macro and Wealth Research at CGS-CIMB Securities in Bangkok. “Moreover, given the potential for a small number of parties to collaborate, their pro-growth proposals are more likely to be put into action.”
Pheu Thai has yet to comment on whether it will seek to form a government with Move Forward. Paetongtarn Shinawatra, Thaksin’s daughter and Pheu Thai’s front-runner for prime minister, expressed “very high confidence in our victory.” Srettha Thavisin, another party candidate for premier, said Pheu Thai “will prioritize talks with pro-democratic parties.”
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“The first option for Pheu Thai is to form a coalition with Move Forward and put pressure on the Senate to approve a prime minister,” said Napon Jatusripitak, a research fellow at Singapore-based ISEAS-Yusof Ishak Institute. “The second option that Pheu Thai has is to look elsewhere.”
There may also still be a role for the centrist Bhumjaithai party — which emerged as a king-maker in the 2019 election on a vow to decriminalize marijuana, and was in third place with about 70 seats, according to the uncertified results.
Under a constitution promulgated in 2017, the military-appointed senators get to vote alongside the 500 elected lower house members to decide on the next prime minister.
Political parties affiliated with Thaksin, 73, have won the most seats in every national vote dating back to 2001, only to be unseated from power by dissolutions or coups.
Whether Thaksin’s planned return to Thailand in July will exacerbate tensions with the military elite is another question. The telecoms magnate has been living in self-imposed exile after fleeing to avoid prison over a corruption conviction that followed a coup that toppled his own government in 2006.
Addressing concerns last week about the potential for another coup, Thailand’s army chief said there was “zero chance” of the Southeast Asian nation returning to military rule in the event of post-election turmoil.
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Regardless of who becomes premier, Thailand’s next leader will be tasked with bolstering growth in a $506 billion economy that has lagged its regional peers and whose citizens have struggled to keep up with inflation and high household debt.
Reflecting the economic concerns of Thai farmers and consumers, most of the major parties promised a similar package of cash handouts, higher minimum wages and a suspension of debt repayments if they took power.
Further clouding the outlook, the arrival of the El Nino weather pattern could cut into the country’s rice crop, a critical export for the Southeast Asian nation. It also remains to be seen if the election can revive Asia’s worst-performing stock market this year after foreign investors withdrew about $2 billion.
Before voting ended, the Election Commission secretary-general told reporters that balloting proceeded smoothly, signaling no significant irregularities. Approximately 52 million Thais were eligible to vote, and more than 90% of about 2.3 million people who registered for early polling did so last week.
--With assistance from Anuchit Nguyen, Pathom Sangwongwanich, Janine Phakdeetham, Cecilia Yap and Randy Thanthong-Knight.
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