Q+A - What is going on in Thailand?

By Alan Raybould
12/04/2010

BANGKOK (Reuters) - Thai anti-government protesters gathered on Monday in Bangkok carrying coffins in memory of their comrades killed in clashes at the weekend in the country's most violent political protests in almost 20 years.

Thai soldiers fight with an anti-government "red shirt" protester as they are deployed near the parliament building during clashes with the protesters in Bangkok April 10, 2010. (REUTERS/Kim Kyung-Hoon)

The tense stalemate and possibility of more violence sent Thai stocks, one of Asia's most buoyant this year, more than 4 percent lower at the start of trading on Monday.

Thailand's government could propose early elections to defuse a month-long political crisis, the Bangkok Post daily, citing unnamed sources, said.

The "red shirt" protesters, mostly supporters of ousted Prime Minister Thaksin Shinawatra, are confident of winning the next election. They see Prime Minister Abhisit Vejjajiva as a front for the establishment elite and military who came to power, not in an election, but in a parliamentary fix in December 2008.

WHO ARE THE RED SHIRTS?

They are an increasingly organised group known as the United Front for Democracy against Dictatorship (UDD).

The UDD is largely backed by the rural poor, loyal to Thaksin because of his welfare and rural development policies while in office from 2001-2006. They are also now drawing sizeable support among the urban working class.

They back Thaksin despite his conviction for corruption after he was ousted in a 2006 military coup. In February this year, the courts confiscated $1.4 billion of his assets, deemed to have been amassed through abuse of power.

Many red shirts believe the graft cases were an attempt to keep him out of politics after the coup. Not all red shirts back Thaksin unreservedly, but all are angered by the manner of his removal and believe democracy is being systematically undermined by powerful, unelected figures.

The UDD operates dozens of community radio stations, websites, a TV channel and merchandise shops, and claims to have scores of organisations running "UDD political schools". Some websites and TV stations were closed down on Thursday.

Some pro-Thaksin military figures have claimed they have set up a "people's army" of militias, but the UDD has been quick to deny any paramilitary movement.

WHAT ARE THEY RALLYING FOR?

Opponents say they are being used by Thaksin to get a friendly government elected so he can return home, recover his money and possibly renew his political career.

The red shirts themselves say their campaign is above all a fight for democracy and a battle against Thailand's elite -- royal advisers, influential businessmen, military generals and the judiciary, who they say have conspired to overthrow elected governments to maintain their wealth and power.

The UDD says Abhisit's coalition government is illegitimate because it was not elected but pieced together with the backing of the army in a "silent coup" in December 2008 after a ruling pro-Thaksin party was dissolved. It wants new elections, which it is confident the pro-Thaksin Puea Thai Party would win.

WHAT DO THE MARKETS THINK?

Numbed by more than four year of political tensions, foreigners had mostly shrugged off the latest round of demonstrations in the Thai capital -- as long as they remained non-violent. They were net buyers in every session since Feb. 22, even when the state of emergency was declared on April 7, amassing $1.82 billion of stock.

But the market fell nearly four percent at the start of trading on Monday after the protests turned deadly, with tourism-related stocks especially hit on concerns the sector would suffer over the violence in the Thai capital.

The five-year bond yield had risen steadily from 3.38 percent in mid-March to 3.56 percent in late March on speculation about an interest rate rise. It has since fallen back to 3.38 as investors bet any rate hike could be delayed if political events derailed economic recovery.

WHERE IS THAKSIN?

Thaksin, a former telecoms billionaire and once the owner of Manchester City soccer club, is widely seen as the de facto leader of both the UDD and Puea Thai. He phones in frequently to red shirt rallies, usually from undisclosed locations. He fled Thailand in 2008 and was later sentenced in absentia to two years in prison for corruption. In February, a court seized $1.4 billion of his family's assets, deemed to have been amassed through abuse of power while he was in office.

He is based in Dubai but travels frequently, although some countries have made him persona non grata since his conviction.

The authorities in Montenegro said in March he had been given citizenship there and he also has a passport from Nicaragua.

More troubling for the Thai authorities, last year he was given a home and a government job just over the border in Cambodia by its prime minister, Hun Sen. He has met family and political colleagues in the tourist town of Siem Reap. Diplomatic relations between Cambodia and Thailand have been severed.

HOW FAR ARE THE RED SHIRTS WILLING TO GO?

In April 2009, the red shirts blockaded the prime minister's office for three weeks and shut down other key intersections in Bangkok. They also forced the cancellation of an Asian summit 150 km (95 miles) away.

Hundreds of red shirts then battled for 14 hours with troops in Bangkok and gave in only when surrounded by troops at Government House, the prime minister's office.

Saturday's fighting, the worst political violence in the country since 1992 and some of it in well-known Bangkok tourist areas, only ended after security forces pulled back late in the night, and the capital has been calm since then.

A government spokesman said on Sunday a line of communication with the red shirts was open but conditions were not right for formal talks.

But thousands of protesters are in a defiant mood after the army failed to move them from one of two Bangkok bases where they have camped out for a month. "We don't negotiate with murderers," red shirt leader Weng Tojirakarn said on Sunday. "We have to keep fighting."

(Writing by Bill Tarrant; Editing by Sanjeev Miglani)