Economic crisis forces Thai Prime Minister to quit

Chavalit Yongchaiyudh, Thailand's embattled Prime Minister, has announced he is stepping down from office after just 11 months. During that time, Thailand has entered its worst economic crisis for decades. As Matthew Chance writes from Bangkok, the PM has
Click to follow
The Independent Online
It was the announcement many Thais have been waiting for. After months of deepening economic hardship, provoking heated street demonstrations in Bangkok over recent weeks, Mr Chavalit could wait no longer to end the months of speculation over his future.

"I think it is time to open a chance for another person to work. The country will have a new government, and new people to serve in it," he told reporters.

Nationwide radio and television quoted the Prime Minister as saying that he would remain in office at least until tomorrow, before seeking the approval of King Bhumibol, as the Thai constitution requires. In the meantime, perhaps in a bid to salvage something from the crisis of his administration, Mr Chavalit says he will see through parliament a number of key items of financial legislation.

There is no escaping the fact that at the end of his short, 11-month administration, Thailand's once dynamic "Asian tiger" economy lies in disarray. The country's banking and property sectors, once booming and lucrative, have stagnated, sending Thailand's finances plummeting. No less than 58 Thai financial companies, buried in billions of pounds worth of debt, have been suspended from operations. And since July, a financial crisis has seen the currency, the baht, lose half its value.

An emergency rescue package for Thailand, brokered by the International Monetary Fund three months ago, worth more than 10 billion pounds, restored some confidence in the embattled Thai economy. But Thailand's failure to act quickly to implement much-needed financial cut-backs has heightened suspicions amongst investors that the government is complacent about economic reform. And the local press, the public at large, even members of his own government have repeatedly named the Prime Minister as the man to blame above all others.

The exit of Mr Chavalit from power may not be the complete solution to Thailand's economic woes. In his announcement, the Prime Minister made no mention of who was to succeed him, or what form the new government would take. And there is concern that confusion might replace the chaos of the Chavalit government, and a change at the top might delay serious economic reform.