New Thai Prime Minister Chuan working out cabinet

New Thai Prime Minister Chuan working out cabinet

BANGKOK (Agencies): Thailand's new government was taking shape yesterday, one day after Democrat Party leader Chuan Leekpai became prime minister, coalition sources and political analysts said.

But less than 24 hours after taking the top job, Chuan said he needed time to try to solve the country's economic crisis before calling a new election.

"The new cabinet will be able to be announced this week," Chuan told well-wishers at his residence. "We need to form the government as soon as possible in order to make immediate moves to solve the (economic) problems."

After days of negotiations, Chuan had wooed 208 politicians from eight parties into a coalition to replace the government of Chavalit Yongchaiyudh, who resigned Friday.

Chuan was officially appointed premier for the second time Sunday evening.

But the new premier said he did not plan to call quick elections as planned by his predecessor. Chavalit, who stepped down after being accused of failing to solve Thailand's economic problems, had promised a poll early next year.

"I would rather not set a fixed time, which would just pressure the government," Chuan told reporters. "It would take a couple of months to make the economy more stable and some months to scrutinize the electoral laws. I want to ensure the new election will be well prepared ... I don't want the new charter to be a victim of haste."

The new constitution came into effect on Oct. 11. Three electoral reform laws, which the charter says must be passed before the House can be dissolved and new elections called, were approved by Parliament last week after one day's debate.

Chavalit had made passage of the laws a precondition to his resignation. Although the laws passed their first reading, the Democrats abstained from voting. They must still be scrutinized in the House before final passage.

Chuan and two members of his likely economic team, former finance minister Tarrin Nimmanahaeminda and former central banker Supachai Panitchpakdi, said late Sunday that reviving the economy was a top priority.

They said they wanted to restore confidence in the economy, especially among foreign investors.

They also said the government planned to quickly revamp the troubled finance sector and to cooperate with the International Monetary Fund (IMF) to stabilize the volatile baht.

In August, Thailand received a US$17.2 billion international bailout package sponsored by the IMF to help revive the economy.

But analysts warned the new government, while widely seen as honest and competent, would not have a miracle cure to the major economic problems, which have been bubbling under the surface for years.

An initial euphoric reaction to the Democrat-led government in financial markets eased slightly by the end of the day as investors waited to see the new administration's policies.

Although off the day's highs, the baht was still firm against the U.S. dollar. By 1000 GMT on Monday it was quoted at 37.22/37.45 bid/ask in onshore dealings, compared with 38.30/38.60 Friday.

The stock market, which initially registered its approval of the new government by opening nearly 3 percent higher, shed all gains and closed down 1.03 percent at 487.94. Dealers said investors were waiting for a clear indication of what Chuan and his economic team planned to do.

Krikiat Pipatseritham, rector of Thailand's Chamber of Commerce University, said the formation of a strong economic team was key to restoring confidence in Thailand.

Tarrin was expected to be named finance minister and Supachai deputy prime minister in charge of economic affairs. The Democrats were also expected to take the commerce and industry portfolios, political sources said.