Thailand’s prime minister elect, Yingluck Shinawatra, said on Tuesday it was too early to decide on her cabinet as jockeying for posts started and investors expressed concern her populist policies would fuel inflation, forcing interest rates up.
Yingluck’s choice of ministers will need to address concerns about possible cronyism and pacify critics who fear the return of her divisive brother, Thaksin, after their Puea Thai Party won a landslide victory in Sunday’s election. “At this time there have been no consultations about the cabinet,” Yingluck told reporters. Puea Thai won 265 seats in the 500-seat parliament, according to the latest Election Commission tally on Tuesday, and could govern alone, but Yingluck, who will be Thailand’s first female prime minister, has said she would form a five-party coalition controlling 299 seats.
“We will not exclude anyone, be he an insider or outsider,” said Yingluck. The formation of a coalition is seen as a way of projecting an image of broad parliamentary support for Puea Thai and easing political friction as it seeks to implement policies.
A cabinet dominated by pro-Thaksin ministers could weaken Yingluck’s calls for reconciliation after six often bloody years of political crisis. “Yingluck’s most urgent and challenging task is to dispel the climate of mutual suspicion among differing political stripes,” said Avudh Panananda, a columnist at The Nation newspaper.
Reconciliation will not be easy for the political novice Yingluck who has never held political office. Thailand remains bitterly divided between pro- and anti-Thaksin camps and another confrontation is still widely feared sooner or later.
“Yingluck’s ‘learning curve,’ or her ability to govern, will be the basis for medium- to long-term risk premia,” said Jun Trinidad from Citi AP Economics Research in Manila.
“The PT party’s cabinet appointments and post-election agenda will be crucial to reassuring investors and underpinning market sentiment.” Comments by PT economic chief and a top candidate for finance minister that Thailand should adopt a managed exchange rate similar to Singapore and China will raise investors concerned over central bank independence. “There is no country in this region that adopts a fully flexible exchange rate. China, Hong Kong, Singapore and others all have adopted managed exchange rate policies,” Suchart Thadathamrongvej told Reuters in an interview on Tuesday .
Sunday’s election result was seen as a rejection of Thailand’s traditional establishment of generals, “old money” families and royal advisers who backed the outgoing government.
