Quotes of the Day

Wichai Wongsawanragamee panned his Handycam across the stage, and then to the crowd of 15,000 in Bangkok's Sanam Luang park, where the enraged protests against Prime Minister Thaksin Shinawatra that had run for weeks were replaced, last Friday, by a jubilation difficult to imagine a week before. The national election held on April 2 had left the country at an impasse, and with neither side seemingly ready to back down, fears grew that the deadlock would be broken by bloodshed in the streets. Yet two days after the election, Thaksin announced that he would step aside, and appealed for an end to the political crisis that had transfixed the nation. That crisis is far from over, but there is a sense that Thailand has passed the worst. "Today is a good feeling for me," says Wichai, an incense trader who brought his six-year-old daughter to Friday's rally. "It's a victory for the people."

"Thailand's silk revolution." That's how Michael Vatikiotis, a visiting research fellow at Singapore's Institute of Southeast Asian Studies, neatly put it in a column last week in the International Herald Tribune. In the space of just a handful of days, the country went from angry street protests, to a spoiled election, to the shocking exit of the polarizing figure who has defined Thai politics for over five years—all without violence or noticeable damage to its humming economy. It might hardly seem democratic that a Prime Minister who managed to capture the majority of votes in an election should be pushed out of power by a vocal minority, but the reality is that Thais faced a seemingly insoluble political dilemma and managed to find a graceful way out—for now. "We have no time to quarrel," said a somber Thaksin during his televised address on April 4 when he announced he was stepping down. "I want to see Thai people unite."

Putting Thailand together again, however, won't be easy. The snap parliamentary election that Thaksin had held two days earlier was a gamble both for him and the political parties and groups allied against him. Thaksin, who called the election three years early, hoped that a conclusive win for his Thai Rak Thai (TRT) party would be enough to prove that most of the country was still behind him. The main opposition parties—the Democrats, Chart Thai and Mahachon—decided to boycott the campaign, urging Thais to vote no on their ballots in an effort to deny Thaksin legitimacy at the polls. In the end, Thaksin won—and then lost. Though TRT candidates earned 51% of the total, some 10 million Thais voted no—leaving the new Parliament short by 38 seats in areas where TRT candidates couldn't muster the 20% of the vote needed by law to win uncontested seats, and one seat where the only candidate running was disqualified. Thaksin initially claimed victory in the aftermath of the election, and the opposition alliance promised renewed protests. Nothing, it seemed, had changed—until Thaksin emerged late on April 4 from a meeting with King Bhumibol Adulyadej and announced that he had decided to step aside, at least partially for the sake of the King's 60th anniversary celebrations in June. Says Thitinan Pongsudhirak, a politics professor at Chulalongkorn University. "We need to put on the best of Thailand for the celebrations."

A CONSTITUTIONAL DEADLOCK
Yet the situation is anything but settled. The Election Commission is rerunning the 39 remaining parliamentary races on April 23, but even with Thaksin gone for now, the main opposition Democrat Party won't field candidates. "We don't think these elections will give the country what it needs," says Korn Chatikavanij, deputy secretary-general of the Democrats. "We don't want to be a part of it."

Another spoiled election would leave the new Parliament short of the 500 M.P.s it needs by law to form a government—which would create a constitutional crisis over the legality of convening Parliament without a full quota. One solution might be a royally appointed interim government, which protest leader Sondhi Limthongkul has been urging for several months. Another possibility is an independent commission that could propose changes to the constitution, which would be subject to public consultation and then parliamentary approval—a process TRT believes could take 12 to 15 months, after which a fresh election would be held. But just the formation of such a commission could be a political headache. The opposition says that supposedly independent agencies, like the Election Commission, are biased toward Thaksin; a constitutional commission, the opposition believes, would therefore have to be truly independent. In any case, under the current rules any constitutional changes would have to go through a Parliament that is locked up by TRT, a fact anti-Thaksin forces are unlikely to accept. "They don't want a continuation of the Thaksin system," says Suchit Boonbongkarn, a former Constitutional Court judge.

Abhisit Vejjajiva, leader of the Democrats, insists that the boycotts have strengthened his party, and that they are ready to fight at the ballot box. "Once reforms are complete, we will be joining elections," he says. But if the street protests drag on, they run the risk of alienating Thais who are tiring of the standoff. "All of a sudden we have a supreme politburo on the streets," says Tom Vamvanij, a translator and blogger who supports Thaksin. "They say what they want and expect the whole country to follow."

In any event, has Thaksin really disappeared from the political scene? Though he handed over the reins of government for now to police general Chidchai Wannasathit, a close associate, Thaksin has said that he'll remain a Member of Parliament and the leader of TRT. Chidchai, who is now interim Prime Minister, is considered little more than a caretaker, and top TRT leaders are already jockeying for the job. But given his dominance over the party he founded, it's not hard to envision Thaksin as the power behind any new leader, or even a new Prime Minister in a future TRT-led government. "It's quite clear the Prime Minister has decided to stay," says Panitan Watanayagorn, a political analyst at the Institute of Security and International Studies at Chulalongkorn University. "We are heading toward another confrontation."

BEYOND THAKSINOMICS
One crisis has just passed and another is possibly looming. Yet Thailand's economy has hardly blinked. The Thai stock market never dipped more than 4.5% from the start of the most intense protests in February, and investors greeted Thaksin's exit with a strong rally, pushing the market up to its highest level in more than two years. Usara Wilaipich, senior economist for Standard Chartered Bank in Bangkok, points out that foreign investors logged a net buy of $55 million on the Thai stock exchange on April 5. "This reflects that foreign investors continue to be confident in Thailand's fundamentals," she says.

Thailand's economy expanded at an average of 5% per year during Thaksin's time. Economists debate just how much credit he deserves for Thailand's decisive recovery from the Asian financial crisis of the late 1990s, but the country's strong economic performance was the main reason Thaksin in 2005 became the first Thai Prime Minister ever elected to a second term. His Keynesian agenda, dubbed "Thaksinomics," poured vast amounts of money into pump-priming infrastructure programs, defended local big business from bankruptcy, and engineered cheap national health care and discounted loans for farmers and small businesses. Those policies helped stimulate domestic demand and earned him staunch support in rural areas, but proved a drain on the national budget and inadvertently led many Thais into debt. "A lot of farmers who were lent money thought they were basically not going to have to pay it back," says Sanyalak Manibhandu, manager of institutional research at Kim Eng Securities, Thailand's largest stockbroker.

In the immediate future, whoever runs the country is likely to continue a version of Thaksinomics, though perhaps with less emphasis on privatization, after a senior court last month blocked the planned sale of Thailand's biggest electricity generator. Exports will remain the key pillar of Thai growth, but lengthy political paralysis could endanger free-trade pacts, including negotiations with the U.S. that have been put on hold by the current crisis.

THE SOUTHERN FRONT
If Thaksin's economic legacy is a mixed success, his heavy-handed policy in Thailand's troubled south was a disaster. When Thaksin took over in 2001, violence in the south was on the wane, as Muslim-separatist groups who had been fighting Bangkok for decades were losing support among the local populace. But Thaksin took a hard line from the start with the south, avoiding compromise while seeking to wipe out the separatists—a policy that has helped turn a low-level dispute into an active and bloody rebellion. Assaults on policemen and Buddhist civilians began to escalate, culminating in a January 2004 attack by more than 100 Muslim youths on a Thai army camp. Thaksin responded by declaring martial law and flooding the region with security forces.

When other politicians suggested a softer approach, he ignored them—which made the tragedy of Tak Bai almost inevitable. On Oct. 25, 2004, several hundred young Muslim men staged a protest outside a police station in Tak Bai district, Narathiwat province. The response was harsh. Soldiers tied up the protesters and stacked them on top of each other in trucks, before driving several hours to a military base; 85 died of suffocation. Though he initially dismissed the deaths, and most Thais took little notice of the tragedy, the damage to Thaksin in the south and in the international community was irrevocable. The five Muslim-majority provinces in the south, which voted for TRT in the 2001 election, are now implacably against Thaksin.

There is some hope that with Thaksin apparently gone, a new government may be able to take a softer approach in the south. The key will be rebuilding networks of communication and trust between security forces and community leaders in the south that existed before Thaksin took power. But the atmosphere of fear and hatred created by Thaksin's policies in the south will surely haunt the next government. "The south is one of the greatest failures of Thaksin and his administration," says Sunai Phasuk, the Thai representative of Human Rights Watch Asia.

BLOWING A MANDATE
The overreach that Thaksin displayed in the south finally caught up to him after the controversial $1.9 billion sale of his family's shares in Shin Corp. to Singapore's Temasek Holdings in January, which fatally intensified growing public anger against him. But Thaksin's downfall began long before the Shin sale. His historic election win in 2005 was so total that he was able to rule with virtually no serious opposition. Then things began to go wrong. Corruption scandals, which would become a recurrent theme in the street protests, began to crop up with greater frequency. In the Senate, Thaksin's allies tried to remove Jaruvan Maintaka, a respected corruption fighter, from her post as auditor-general. She fought back, and when the Senate sent the nomination of a new auditor-general to the palace for confirmation, the King didn't respond, though nearly all such nominations are confirmed within a couple days. The signal from the palace was clear: the King was not happy that a graft buster was being pushed out of her job. After a three-month stalemate, the nomination was withdrawn by the Senate, and Jaruvan eventually returned to her job this February.

The Shin sale in January proved the tipping point. When he was first elected, Thaksin portrayed himself as a nationalist who was wealthy enough to be above corruption, but many Thais saw the deal with Temasek as a case of Thaksin enriching his family by selling off national assets to foreigners. His opponents accused him of behaving as if he were answerable to no one. "After he won with such a landslide, he thought he was a god," says Vikrom Kromadit, vice-chairman of the Thai-China Business Association and CEO of Amata Corporation. "He forgot he was just a Prime Minister."

Thaksin remains extremely popular, however, outside the cities, in towns like San Kampaeng in the north, where portraits of the now ex-Prime Minister loom above street corners and noodle stalls. Here there is only sadness at his loss, and a sullen anger at the élites who pushed out the town's most famous native son. "Nobody ever says anything bad about him here," says Lungchoei Taepin, a former kickboxer who opened a noodle stall in the 1950s next to a coffee shop owned by Thaksin's father. Across the street from the site of Thaksin's birthplace, 89-year-old Fongaew Tiraksawat remembers the gifted boy she taught in nursery school. "He was clever at math and reading and writing Thai, so different from the other boys," says Fongaew, an ethnic-Chinese Muslim and a distant relative of Thaksin. "Everyone is so disappointed." She touches her green headscarf and smiles. "But we believe he'll be back."

Whether or not he does return, Thaksin has altered Thailand's political map. In early February, even as protests in Bangkok were growing to a crescendo, Thaksin spent a week taping a "reality-TV show" in a rural northeast village, giving out money and gifts to his faithful supporters. The micro-loans and other handouts under Thaksin have made a real difference in the lives of rural Thais—one they're not likely to forget. Where many urban Thais see a corrupt autocrat, their country cousins see a man of action, and a man of the people. It is this split, more than constitutional conflicts or personality clashes, that will become one of the central challenges for Thailand's political leaders in the future. For all the damage his critics accuse him of inflicting on Thailand's democratic institutions, Thaksin made the 45 million Thais who live in the countryside feel that they truly counted in their own democracy. "This is the first time rural Thailand has really been courted by a Prime Minister," says Panitan. "The people are demanding they be taken care of and want real leadership. They won't accept indecisive leaders anymore." There's a lesson for whoever succeeds Thailand's fallen chief.

• Bryan Walsh
• Thai Prime Minister Thaksin Shinawatra steps down and defuses a political crisis. But the country's future remains uncertain