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Protests over, Thailand aims to revive economy

world Updated: Apr 15, 2009 11:20 IST

Reuters
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The Thai government geared for steps to shore up the economy on Wednesday, a day after it brought a halt to violent protests that have further dented confidence in a country already on the brink of recession.

The streets of Bangkok were calm, with troop presence much reduced after die-hard demonstrators were dispersed overnight.

The Financial Times quoted Finance Minister Korn Chatikavanij as saying that Thailand may expand its stimulus package and increase borrowing to boost confidence and deal with the economic costs of political turmoil.

"We were already anticipating revenue shortfalls in the current fiscal year and that shortfall is almost certainly going to be larger now as a result of what happened over the last 72 hours and so we are going to have to make sure we have sufficient fiscal space," he said in an interview.

Financial markets were closed for the final day of the three-day Thai new year holiday but will reopen on Thursday.

Shares and the baht were expected to come under selling pressure. Tisco Securities strategist Viwat Techapoonphol expected foreign selling to lop between 3 and 5 percent off the main Thai stock index, which has failed to join in the rally on other bourses in recent weeks due to the political crisis.

"Selling pressure will come from foreign funds constrained by their policy of not investing in countries where there is a state of emergency in place," he said.

Markets will open even though the government has extended the holiday to cover the whole week to control the flow of people back into the capital because infrastructure needs to be repaired and some anti-government protesters may still want to fight.

Arrest warrants

Police said arrest warrants had been issued for former Prime Minister Thaksin Shinawatra, the exiled figurehead of the "red shirt" protest movement, and 13 leaders of the United Front for Democracy against Dictatorship (UDD) for violating state of emergency regulations.

Four of them were already in custody. Army spokesman Colonel Sansern Kaewkamnerd said on television late on Tuesday that a few hundred protesters, not wearing their usual red shirts, had gathered at Sanam Luang, an open space near the royal palace, but they had been dispersed without force before midnight.

Police said on Wednesday there was still a police presence in that area, but less than 100 officers. Prime Minister Abhisit Vejjajiva said on Tuesday that the state of emergency imposed on Bangkok on Sunday would remain for the time being to help the authorities restore order.

Newspapers that had lambasted the prime minister for the collapse of an Asian summit at the weekend after protesters invaded the venue in the resort town of Pattaya, praised his handling of the violence in Bangkok.

Two people died, in skirmishes between locals and "red shirts" according to the authorities, while more than 100 were injured in clashes between soldiers and protesters trying to blockade a major road junction on Monday.

But a three-week occupation of Government House, Abhisit's office, was ended without force on Tuesday when the Thaksin supporters decided to surrender as hundreds of troops and riot police surrounded them.

"The government ... should be commended for their demonstration of restraint in the handling of the rioting and, more importantly, for the judgment in not rushing for a final break-up of the protesters at Government House, even though they had the capability to do so and the legitimacy as well," the Bangkok Post said in an editorial.

Thailand's intractable political divide broadly pits royalists, the military and the urban middle-class against the rural poor loyal to Thaksin.