(Bloomberg) — Paetongtarn Shinawatra, a daughter of former Thai leader Thaksin Shinawatra, won a parliament vote to become the Southeast Asian nation’s new prime minister, capping a tumultuous spell during which a court ousted her predecessor and dissolved the top opposition party.
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Paetongtarn, 37, secured the support of 319 lawmakers in the 500-member House of Representatives. Her nomination was backed by coalition led by Shinawatra-controlled Pheu Thai Party and included a number of conservative and military-backed parties.
She becomes the third member of the influential Shinawatra clan to lead the country and the youngest prime minister in Thailand’s history. She was picked for the top job after the country’s Constitutional Court dismissed Srettha Thavisin as leader in an ethics violation case linked to the appointment of a tainted lawyer as a minister.
Paetongtarn’s elevation came after Srettha’s 11-month-old tenure saw his party’s popularity sliding and that of the now-disbanded Move Forward — the principal opponent of the pro-royalist establishment — steadily climbing. The Shinawatra scion, in the company of her still popular father, is expected to counter the rise of the opposition People’s Party that’s seeking to reform lese majeste — a law that protects King Maha Vajiralongkorn and other top royals from criticism.
Thaksin Deal
The support of conservative groups for a Pheu Thai-led government is a sign that a deal between the pro-royalist establishment which allowed Thaksin to return from a 15-year exile was still intact.
Although her victory ended a brief period of political uncertainty, analysts say it is far from certain that her government will be stable. The shadow of her father, a two-time former premier who still wields much influence over Thai politics, will be looming over her leadership.
“She will be her father’s puppet and won’t likely be able to do much,” said Punchada Sirivunnabood, an associate professor at Mahidol University in Thailand. “Questions remain how she’ll be able to solve economic issues which even Srettha couldn’t.”
While Paetongtarn may continue much of the policies pursued by Srettha’s administration, it may abandon a controversial plan to distribute 10,000 baht ($286) each to an estimated 50 million adults to stimulate the economy, according to local media reports on Friday. Most of the members of Srettha cabinet may remain in their roles, while Pichai Chunhavajira, who helmed the finance ministry may be excluded, Thai-language Krungthep Turakij reported.
On Thursday, Paetongtarn vowed to “do everything in my capability” to pull Thailand out of the “economic crisis” with the support of the coalition. Her administration challenges include bolstering growth through looser fiscal policies and tackling the high cost of living and near-record household debt.
Besides steering an uneasy coalition, Paetongtarn will need to find ways to lift average annual economic growth of below 2% over the past decade, attract foreign investment into high-tech industries and stem the exodus of foreign funds from the nation’s stocks.
The alumnus of the University of Surrey has previously favored lower interest rates and slammed the central bank, saying its autonomy posed an “obstacle” to resolving the country’s economic issues. The bank of Thailand has held borrowing costs at a decade-high 2.5%, ignoring calls from Srettha and his aides to cut the rates.
Thailand’s benchmark stock index is among the world’s worst performers this year with foreign funds withdrawing more than $3 billion during the period. The baht has lost about 2.8% this year, and foreign investors have net sold $691 million of bonds this week in a sign that the notes are losing their appeal.
–With assistance from Suttinee Yuvejwattana, Pathom Sangwongwanich and Anuchit Nguyen.
(Updates with final vote count and analyst comment from second paragraph.)
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