Thai charter vote foreshadows post-transition politics

Subject

Outlook for the post-transition political system.

Significance

The August 7 constitutional referendum will be conducted under tightened controls on political organisation, making a 'yes' vote more likely. Although the Democratic Party criticises the draft for its attempt to return Thailand to a semi-authoritarian state, efforts by deposed former Prime Minister Thaksin Shinawatra's 'red-shirt' supporters to organise protests offer the only real opposition to the junta's plan. This struggle foreshadows the political system that is likely to emerge after the next parliamentary elections.

Impacts

• Regulatory risk to investors post-transition would be limited: the military, the Democrats and the PTP are pro-business.
• China will not alter the status quo in its Thai relations, but will need to invest in building ties with the next monarch.
• Washington will tolerate most eventualities, except a violent crackdown against the military's opponents.