A year after Thai coup, stability trumps growth for business

By Amy Sawitta Lefevre and Panarat Thepgumpanat BANGKOK (Reuters) - When Thailand's army seized power in a bloodless coup, much of the business establishment quietly cheered them on. A year on, the captains of Thai industry remain firmly behind the junta, despite a lackluster economy and a delayed return to democracy. For businesses, calm on the streets of a city that was engulfed in chaos for months leading up to a putsch is more important than finding a cure for the malaise in Southeast Asia's second-largest economy. "I'm satisfied. At the very least it has made the country peaceful and it has brought order," Poj Aramwattanont, president of the Thai Frozen Foods Association (TFFA), told Reuters. In the early months of 2014, Thailand's government was paralyzed, parts of Bangkok were shrouded by tear gas and state buildings fortified to look like army barracks. Conditions for growth are better now, reckons Poj. "There is an attempt to reform according to the junta's road map," he said. "Thailand was on pause for a long time because of political problems, so ... the economy has a chance to rebound." A year ago, pro-government protesters camped on the outskirts of the Thai capital swore they would spring into action if the army intervened to remove the elected government. In the city's heart, anti-government protesters, mostly southern Thais and middle-class Bangkok residents aligned with the royalist-military establishment, were equally determined to get rid of Prime Minister Yingluck Shinawatra. On May 22 the military took control, detaining hundreds of politicians and activists on both sides of the divide and dissolving the protests. Investors welcomed the calm imposed on Thailand's febrile politics, and the stock market rallied. Coup leader and Prime Minister General Prayuth Chan-ocha reiterated on Friday that the army had to step in. "We tried everything... How else could we have responded?" he told the nation in a weekly televised address. "We cannot fix the past but we can build for the future and the present." Heavy-handed tactics by the military and police since have ensured that the junta, officially known as the National Council for Peace and Order, has ruled largely unchallenged. Human Rights Watch, in a statement on Friday, said the junta had systematically repressed human rights throughout the country by banning political activity, censoring the media and trying dissidents in military tribunals. "One year since the military coup, Thailand is a political dictatorship with all power in the hands of one man," said Brad Adams, Asia director at Human Rights Watch. Thai police detained dozens of students on Friday for taking part in symbolic protests. Ronnachit Mahattanapreut, senior vice president for finance at hotel and food group Central Plaza Hotel PCL, said what the private sector wanted most was security. "We want political stability so that businessmen can project long-term investment plans," he said. "Countries like China, Vietnam and Myanmar -- their governments can implement key economic policies to keep investments going." VOTE DELAYED Prayuth has talked much about healing Thailand's deep political divisions. Reconciliation is a mantra in his weekly Friday televised address, "Returning Happiness to the People". When asked to comment on the military's year in power this week, he said: "I am satisfied but I am not proud." Critics say politics are simply on hold and that divisions remain as sharp as ever. They say the blueprint for Thailand in a new draft constitution is an attempt by Prayuth and the powers that back him to prevent a comeback by former prime minister Thaksin Shinawatra and his allies. Thaksin this week broke his silence on the junta that removed the remnants of his sister Yingluck's government from office. Its year in power was "not so impressive", he said, but he had no plans to mobilize his "Red Shirt" supporters. The junta on Tuesday delayed a planned election by at least six months to August 2016, to allow a referendum on the new charter. Executives appear unperturbed by the delay. "We don't need elections quickly," said Poj. "If the roadmap is prolonged because of the referendum, then so be it." MISSED OPPORTUNITY Pornsil Patchrintanakul, president of the Thai Feed Mill Association and an adviser to the Thai Chamber of Commerce, scored the junta highly for political governance, but less well on the economy. "Investment and stimulating the economy have been slow," he said. Despite hopes that the generals would unleash a splurge of infrastructure spending, state investment has failed to keep pace even with the levels the paralyzed government of a year ago managed, partly because bureaucrats fear an anti-graft campaign by the junta. Record-high household debt has hurt consumption and Thailand's export-driven economy is suffering as the economy of top trade partner China slows. Thailand downgraded its growth forecasts on Monday by 0.5 percentage points to 3.0 to 4.0 percent for the year. Prayuth said on Friday his government would "try its best" to help the economy. For some analysts, the junta has missed the opportunity to use its almost untrammeled power to drive through investment and economic reforms. "Expectations were high when the military took over that they could kick-start spending quickly," said Bill Diviney, an economist at Barclays in Singapore. "In hindsight, perhaps it was unrealistic to expect so much of a government that, for all intents and purposes, is a caretaker until democracy is restored." (Additional reporting by Pracha Hariraksapitak, Khettiya Jittapong and Manuphattr Dhanananphorn; Editing by Simon Webb and Mark Heinrich)