Sunday, 3 August 2008

Thailand's Samak Replaces Ministers After Protests (Update1)
By Rattaphol Onsanit and Daniel Ten Kate

Aug. 2 (Bloomberg) -- Thailand's Prime Minister Samak Sundaravej removed five ministers and announced six new appointments following months of street protests and a series of court rulings that forced out key members of his cabinet.

Samak transferred Commerce Minister Mingkwan Sangsuwan to the Industry Ministry, while Finance Minister Surapong Suebwonglee kept his position, according to a statement from the Royal Palace in Bangkok today. Chaiya Sasomsup, who was forced to step down as health minister after the Constitutional Court said he failed properly to disclose assets, replaces Mingkwan.

The overhaul of what Samak has called an ``ugly'' cabinet is aimed at calming anti-government protesters who say he is a proxy for former Premier Thaksin Shinawatra, deposed in a 2006 coup. Three ministers, including Thaksin's former lawyer and a prominent anti-coup campaigner, have quit over legal rulings since Samak formed his government six months ago.

New cabinet members include Kowit Wattana, a former police chief who briefly joined the junta after the coup before falling out with the leadership. He replaces Chalerm Yoobamrung, a former police captain who escorted Thaksin from the airport when he returned in February after 18 months in exile.

The shuffle comes after consumer confidence dropped for three straight months and the benchmark SET Index dropped almost 23 percent since street protests began May 25. Thailand's currency was the worst performer in Asia over the same period, declining about 4.3 percent against the dollar.

Samak Foe

The protests against Samak are led by Sondhi Limthongkul, a former Thaksin business associate who fell out with the ex- premier in 2005 and led demonstrations that preceded the coup. His group has vowed to continue protesting until Thaksin is convicted on corruption charges.

``We are in need of a capable economic team,'' said Ekachai Chongvisal, who helps oversee $2.3 billion at Tisco Asset Management Co. in Bangkok, before the announcement today. ``The problem with the government at the moment is that there seems to be a lot of talk and not much action, so whoever comes in must push forward.''

Surapong, the finance minister, faced pressure to resign after a court ruled July 28 that the former premier's administration illegally created a lottery. Surapong was one of three ministers who also served in Thaksin's administration. The others are Labor Minister Uraiwan Thienthong and Deputy Transport Minister Anurak Jureemart, who also stayed in cabinet.

`Not Budging'

``The three ministers have said they're not budging, so Samak would need a lot of courage to actually replace them,'' said Prudhisan Jumbala, a political science lecturer at Chulalongkorn University in Bangkok.

Samak appointed Tej Bunnag, a former ambassador to the U.S., as foreign minister on July 26. He replaced Noppadon Pattama, Thaksin's former lawyer who quit July 10 after the Constitutional Court ruled that the cabinet acted beyond its power in approving a joint statement backing Cambodia's attempt to list the Preah Vihear temple as a United Nations World Heritage site.

Protests stemming from the decision prompted Cambodia and Thailand to deploy 1,500 soldiers to the area for two weeks before they agreed to a troop withdrawal on July 29. Tej, who has also served as an adviser to the office of King Bhumibol Adulyadej's Principal Private Secretary, led the Thai side in the latest round of negotiations.

Royal Connection

``The new foreign minister is a palace connection, which signals that the palace is seriously concerned about this Thailand-Cambodia territorial dispute,'' said Thitinan Pongsudhirak, director of the Institute for Strategic and International Studies at Chulalongkorn University in Bangkok.

Tej is an ``immaculate choice'' and his appointment is ``a big credit to the Samak government,'' he said.

Bhumibol, the world's longest-reigning monarch, is revered as a symbol of stability in the nation of 66 million people, many of whom hang his portrait in their homes. As a constitutional monarch, the 80-year-old king is head of state while the prime minister and parliament govern.

The opposition Democrat Party has said it plans to impeach members of Samak's government.
The prime minister won a parliamentary confidence vote last month with 63 percent support.

A ruling by the Supreme Court that a former executive of Samak's People Power Party bought votes in last year's election could lead to the dissolution of the party. The party denies wrongdoing.

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