(Bloomberg) — Srettha Thavisin, a former real estate magnate, has become Thailand’s first new prime minister in nearly a decade.
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Backed by a coalition of populist and conservative parties, Srettha won nearly two-thirds of lawmakers’ votes in a joint meeting of the House of Representatives and Senate on Tuesday. The election of the Pheu Thai Party candidate ends a three-month political stalemate that unnerved markets and raised concerns about policy delays.
Srettha, 61, entered the race after Pita Limjaroenrat of the Move Forward Party — which won the most seats in the House in the May 14 general election — was blocked by senators last month. Srettha’s victory on Tuesday came hours after billionaire Thaksin Shinawatra, a former prime minister who effectively runs Pheu Thai, ended his 15-year exile and flew home.
The new prime minister must now put together a cabinet whose members will be divided among the many coalition parties – a task that could take several weeks.
“I am deeply honored to be elected Thailand’s 30th Prime Minister,” he said in a brief statement at party headquarters. “I will do my best and work tirelessly to improve the well-being of all Thai people.”
Challenges facing the new prime minister include a society deeply polarized by post-election unrest, a fragile economic recovery and nationwide household debt that has risen to an all-time high since a 2014 coup led to a nearly decade of military-backed rule.
Who is Srettha?
The new Prime Minister spent more than 30 years in the real estate industry after earning an MBA from Claremont Graduate School in the US. Srettha joined Pheu Thai this year as a chief advisor to Thaksin’s daughter Paetongtarn Shinawatra.
Srettha had been a top executive at Sansiri Pcl since the late 1980s before stepping down as president and chief executive in April. He got out of the luxury real estate developer by transferring all his shares to his daughter. He has also sold or transferred his interests in other companies to comply with Thai law.
An avid footballer and fan of Liverpool FC in the English Premier League, the new Prime Minister was a driving force behind the Sansiri Academy, which trains aspiring local players. Six foot tall Srettha is married to Pakpilai Thavisin, a specialist in anti-ageing medicine. The couple has three children.
Long before venturing into politics, Srettha was an outspoken advocate for LGBTQ rights and environmental sustainability, as he willingly commented on the topics on social media – unlike most Thai business people.
How did he become the top contender?
Despite a disappointing second place for Pheu Thai in May’s general election, the party found a political opening following failed coalition-building efforts by former partner Move Forward and its leader Pita, whose pledge to amend Thailand’s strict royal insult law. and other reformist agendas left him with virtually no support from the pro-royalist senate or conservative parties.
Pheu Thai surged to head its own coalition, with the party choosing Srettha over Thaksin’s 37-year-old daughter as its candidate for prime minister.
What about allegations of tax evasion?
Chuvit Kamolvisit, a former businessman, alleged that Srettha was complicit in helping a group of people evade taxes in 2019 when they sold a plot of land to Sansiri. Srettha has denied any wrongdoing and has filed a 500 million baht ($14 million) defamation suit against Chuvit, which has also accused the company of other illegal land transactions.
The allegations do not pose a direct threat to Srettha’s premiership, although they raise wider questions about how the real estate companies conduct business.
What are his priorities?
In an interview with Bloomberg earlier this year, Srettha said he wants to boost economies that are lagging behind the growth of his neighbors and bridge the gap between rich and poor through a “digital wallet” program that every Thai aged 16 and up can use. older 10,000 baht.
Srettha will also have to fulfill Pheu Thai’s campaign promises, such as a 70% increase in the minimum wage, a guaranteed household income of 20,000 baht per month and a tripling of agricultural profits to boost economic growth to 5%.
What are the challenges he will face?
Southeast Asia’s second-largest economy is facing headwinds from a slowdown in China, which has hurt Thai exports and led to a slow return of tourists from China – the main source of visitors before the pandemic. It also struggles with a long-standing problem of high household debt that has risen to about 90% of the economy’s nearly $500 billion.
Srettha will have to balance the interests of the conservative and military personalities who continue to grip Thai politics with the clamor of a younger voter base that gave the fledgling Move Forward Party the most seats in the lower house in May’s elections .
With Pheu Thai joining hands with a party backed by former junta leader Prayuth Chan-Ocha – who led the 2014 coup that overthrew a previous Shinawatra-led government – Srettha must ensure his party’s base is not eroded . His government will also have to honor a promise to quickly rewrite the constitution to make Thailand more democratic.
How do investors view him?
Srettha and Pheu Thai are likely to be well received by investors given their promise to stimulate the economy through government spending. That could boost gross domestic product growth to more than 3% this year, the Thai Chamber of Commerce said on Tuesday.
The party also promised to cut electricity rates, enforce more free trade agreements to attract foreign investment and take steps to legalize gambling, which is likely to be praised by the market.
Foreign investors have dumped about $3.8 billion worth of Thai stocks this year, sending the main stock index down more than 7%, making it one of Asia’s worst performers.
–With help from Low De Wei, Suttinee Yuvejwattana and Anuchit Nguyen.
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