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What’s ahead for Thailand after King Bhumibol’s death?

  • Published at 10:21 pm October 13th, 2016
What’s ahead for Thailand after King Bhumibol’s death?

King Bhumibol Adulyadej, who died peacefully on Thursday, was the world's longest-reigning monarch, credited with restoring the influence of Thailand's royalty during 70 years on the throne and earning the devotion of many of his subjects.

For the majority of the country's 68 million people, the king was a pillar of stability in rapidly changing times - Thailand embraced industrialisation during his reign but also saw its parliamentary democracy punctuated by 10 military coups, the most recent in May 2014.

King Bhumibol, who ascended the throne on June 9, 1946, was seen as a force for unity, and there have long been concerns that the political tensions that have riven Thailand over the past decade could worsen after his death.

That may be less likely under the regime of the leader of the most recent coup, Prime Minister Prayuth Chan-ocha. The former general has held a tight grip on power since toppling the remnants of Thailand's last democratic government in 2014.

Thailand has been divided for years between the royalist establishment and the red-shirted supporters of exiled former Prime Minister Thaksin Shinawatra, who was ousted in a 2006 coup.

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Though officially above politics, he first started to speak out on political issues in the 1960s against the backdrop of a creeping communist insurgency.

In 1973, he intervened personally after bloodshed in Bangkok when students demonstrated against military rule. He nominated a new prime minister, diffusing the political tension.

Although backing the students then, as a social conservative King Bhumibol was worried about the threat to public order inherent in any people's movement, and three years later he intervened on the side of the military after another bloody putsch.

The king's image as a political truce-maker peaked after bloody clashes in 1992 between pro-democracy protesters and the army. He summoned the protagonists, a former general leading the protests and an army-chief-turned-prime minister, and with the two prostrate before him, ordered them to desist.

His intervention led to the subsequent collapse of military rule.

[caption id="attachment_21847" align="aligncenter" width="800"]Thai King Died People weep after an announcement that Thailand's King Bhumibol Adulyadej has died, at the Siriraj hospital in Bangkok, Thailand, October 13, 2016 REUTERS[/caption]

The king retreated from active political intervention after the events of 1992 in favour of influence wielded through a network of ageing generals, judges and bureaucrats on his Privy Council of advisers who helped oversee what some academics view as a "managed democracy", in which the military remained prominent.

The army avoided direct intervention in politics from 1992 until the 2006 coup against Thaksin, a populist telecoms billionaire the military said was corrupt and disloyal to the monarch.

Thailand's monarchy is one of the world's richest, although the value of its assets and the wealth of family members have never been made public.

The Crown Property Bureau, which manages the institutional assets of the monarchy, has stakes in top Thai firms such as Siam Commercial Bank and Siam Cement Group and extensive land holdings believed to be worth tens of billions of dollars.

The bureau does not publicly disclose its overall income, or detail where the money is spent. The Foreign Ministry insists the bureau's assets are not the king's personal wealth.

Despite the monarchy's wealth, King Bhumibol was the keen proponent of a "sufficiency economy" philosophy - known in Thai as a "just-enough economy", or the idea of moderation and self-reliance, which drew on Buddhist teachings.

Revered by many

The king was seen as semi-divine by many ordinary Thais, an image bolstered by Thailand's education and legal systems.

"The King shall be enthroned in a position of revered worship and shall not be violated," states the constitution.

Thailand has lese-majeste laws that impose long prison terms for insulting the monarchy. The laws have been enforced harshly as the establishment sought to control new, less deferential political forces and as dissent has found avenues of expression through social media.

Prayuth is a staunch royalist and under his government there has been a surge in prosecutions and tougher sentences for lese-majeste.

King Bhumibol himself said in a 2005 speech that he was open to criticism and those jailed for offending him should be released, but that did not stem the rising number of cases in the troubled years since.

The country faces an uncertain future. The vast majority of Thais have lived only under Bhumibol.

His presumed successor, Crown Prince Maha Vajiralongkorn, 63, has taken a more prominent part in royal ceremonial and public appearances in recent years, but he does not command the same level of devotion as his father.

Economic disruption unlikely

Thailand is unlikely to face major economic disruption after the death of revered King Bhumibol Adulyadej, although many people in the country will be grief stricken, some risk analysts and diplomats said.

The government might postpone to 2018 a general election scheduled for next year, and Thai stocks and the baht currency are likely to be volatile immediately after the king's death, the Eurasia Group of risk analysts said in a report issued before the announcement of the king's death.

Overall, the impact on the investment environment will be "relatively minor" and limited to what is likely to be an initial mourning period of 100 days, it added.

[caption id="attachment_21813" align="aligncenter" width="700"]Short profile of Thai King Bhumibal's life Short profile of Thai King Bhumibal's life[/caption]

The Stock Exchange of Thailand's benchmark index fell as much as 6.9% on Wednesday to its lowest since March 1, but recovered to close down 2.5%.

It closed 0.47% up on Thursday before the announcement of the king's death.

Nordea Markets' chief analyst Amy Yuan Zhuang, based in Singapore, said the economy was not as sentiment-driven as the baht, which could be vulnerable to capital outflows.

King Bhumibol was widely loved and most Thais have known no other monarch. Although his health had been poor for years, many will be shocked and deeply saddened by his death and will wear black and make offerings at Buddhist temples.

A royal cremation is likely to take months to prepare, according to palace tradition and two royal funerals over recent decades. Mourning rituals in temples are likely to be observed for many months, perhaps even years, if recent royal funeral rites are repeated.

Companies are likely to postpone some kinds of events, such as product launches, for the initial mourning period, the Eurasia Group said.