Farmer unrest dogs Chuan's government

Farmer unrest dogs Chuan's government

By Anchalee Koetsawang

BANGKOK (Reuters): The moment of truth is almost at hand for Thai premier Chuan Leekpai and his government as thousands of poor farmers prepare to descend on Bangkok to air their grievances today.

For Chuan, a humble grassroots leader, it will be painful to see the farmers, their anger stoked by the opposition, march into the capital and accuse his government of helping the rich at the expense of the poor.

Anti-government rallies by farmers in Bangkok occur almost annually, but this protest comes at a critical moment.

The gap between rich and poor is widening, making for a potential threat to the credibility and survival of Chuan's government as Thailand struggles to overcome its worst economic crisis in decades.

The protest, timed for the first reading in parliament of the nation's 1998/99 (October-September) budget, will be the biggest faced by the six-party coalition government since it took power last December.

Foreign investors are worried about the scale of the protest, fearing that social unrest in the heart of the capital could rock international confidence in the country.

"These protests occur every year but this time around it is different because they come along with a sharp decline in economy and negative sentiment arising from that. So it is being watched closely," an Asian diplomat said.

"The government seems ready for it and so far it seems to be contained," he added. "The government has held informal negotiations with the protest leaders but nothing major has emerged. It is left to be seen how it will turn out."

Thai stock and money markets are also nervous about the fall- out of the planned protest.

The farmers, mainly from the impoverished northeast, have threatened to bring Bangkok to a standstill if the government fails to grant them relief from hundreds of billions of baht in debt owed to a state-owned farm bank.

The Northeastern People's Organization (NPO), an umbrella group of the farmers' groups, and seven political activists backed by the main opposition New Aspiration Party (NAP) have vowed to bring at least 20,000 farmers to parliament.

NAP leader and former premier Chavalit Yongchaiyudh, whose government collapsed amid the economic crisis last November and was succeeded by Chuan, has vowed to lead the rally.

Despite claims that the disgruntled farmers might have been misled by politicians, some of their complaints were valid, analysts said.

"Many of them have been pushed out of their original peaceful environs to make way for new dams and commercial structures without proper explanation and compensation," said columnist Suthichai Yoon in the English newspaper, the Nation.

"Others have found the adjustments impossible and have been looking for social safety nets which were either non-existent or never materialized despite promises by local politicians and officials," he wrote.

Most farmers are heavily in debt.

Farm groups say they have been denied financial support while the government has enacted measure after measure to save the rich businesses whose failure sparked the crisis.

The government last month approved decrees to enable it to borrow $18 billion locally and abroad to fund financial sector bail-outs which triggered a public debate about government helping the rich at the expense of the poor.

In a bid to demonstrate that his government was not ignoring the plight of the poor, Chuan recently allocated 10 billion baht for rural programs, besides setting up agencies to care for them.

He defended his government's policy of helping business, saying that if the economy collapsed, both rich and poor would be badly hit.

Somphob Manarangsan, economic professor at Chulalongkorn University, said the government would have to work faster and more efficiently to dispel the feeling of the underprivileged that they were being ignored.

"This protest will pose a big threat to the government because there will be lots of participants in the rally. It will provide ammunition for the opposition to create a perception that this government is anti-poor even though the opposition has shown it cannot handle the problem either," he said.