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The Star Online: World Updates

Stumbling Thai economy lends urgency to junta's revival efforts

Posted: 30 May 2014 03:22 AM PDT

BANGKOK (Reuters) - Private investment and consumption remained stagnant in Thailand in the run-up to this month's military coup, further evidence of a stumbling economy that will lend urgency to the junta's efforts to get the country working again.

Southeast Asia's second-biggest economy has been battered by political turmoil since late last year, when protesters backed by the royalist establishment launched a bid to oust the populist government of Prime Minister Yingluck Shinawatra.

The government clung to power even after a court forced Yingluck out of office for abuse of power on May 7, but the military ousted it in a coup on May 22, saying a takeover was necessary to restore order and prevent further violence.

Gross domestic product shrank 2.1 percent in the first quarter of 2014 as the lengthy anti-government protests damaged confidence and scared off tourists.

With only caretaker status after dissolving parliament in December for a February election that was later annulled, Yingluck's besieged government had lacked the power to take policy decisions or approve new spending.

A senior central bank official, Mathee Supapongse, said on Friday that under the new military government, "the overall picture looks better, but it's not easy to get to the central bank's economic growth forecast of 2.7 percent".

"We need time to assess the situation first," said Mathee, head of the bank's macroeconomics department. "It's been half a year now and stimulus measures will not come all at once, but gradually, so the effect will rather be felt next year."

He was speaking at a briefing after the release of central bank data that showed private investment in April, the first month of the second quarter, was 4.7 percent lower than in the same month last year and consumption was down 0.8 percent.

It followed data on Wednesday that showed factory output fell for the 13th straight month in April, imports plunged and exports remained weak, underscoring the difficulty the military government faces in averting recession.


While the United States and other allies have urged a quick return to democracy, Thailand's new military rulers have held out little hope for early elections.

Army chief and coup leader General Prayuth Chan-ocha has spoken of the need for broad reforms before an election. Another top officer said on Thursday that conditions had to be right and divisions healed before a return to civilian rule.

Despite martial law and a ban on gatherings, small peaceful protests against the takeover have been held daily in Bangkok. Activists, spreading word through social media, say they will hold a big show of opposition on the weekend.

A military spokesman said on Friday the junta was "carefully checking" the Internet for the planning of protests.

"If there are gatherings then we will start with negotiations with the crowd but if there is no understanding then we will have to apply the law strictly," deputy army spokesman Winthai Suvaree told reporters.

Thailand has become polarised between supporters of Yingluck and her influential brother, deposed premier Thaksin Shinawatra, and the royalist establishment that sees Thaksin and his populist ways as a threat to the old order.

Despite the animosity of the elite and the Bangkok middle class, Thaksin's popularity in the rural north and northeast has ensured that he or his allies have won every election since 2001.


Navy commander Admiral Narong Pipattanasai, the junta member overseeing tourism, told reporters on Thursday that 26 million people were expected to visit this year, down from a targeted 28 million, because of the unrest.

He said revenue from tourism was expected to drop to 1.8 trillion baht ($55 billion). The authorities had been banking on 2 trillion.

"We will do our best to improve the situation," Narong said. "The next pressing task is to build confidence among tourists and to show them that they can travel in Thailand freely ... through campaigns and other methods."

Tourism accounts for about 10 percent of the economy. Many foreign governments have issued warnings about travelling to Thailand, which can affect insurance cover.

Narong said a nationwide night-time curfew, imposed on the day of the coup for seven hours but cut to four hours on Wednesday, could be shortened again in tourist areas. Even in Bangkok, the curfew is not being strictly enforced.

The protests in Bangkok have been rowdy and tense at times but there has been no serious violence. For a day or two after the coup there were also small protests in the northern city of Chiang Mai, but tourist resorts have been unaffected.

The National Council for Peace and Order, as the military junta is known, has imposed rigorous security and censorship, detaining more than 200 people including Yingluck and ministers of the ousted government, though she and many other detainees have since been released.

An ardent supporter of Thaksin and leader of his "red shirt" activists said upon release from detention he was washing his hands of politics for the sake of national reconciliation.

Suporn Attawong, known by followers as "Rambo Isarn" after the northeastern heartland of Thaksin support, said he had not been pressured by the army to quit politics.

"I had a lot of time to contemplate and realised that some of us need to back down for Thailand to be at peace. I have been in politics since I was 20 years old, it's time to step away," Suporn told Reuters on Friday.

(Reporting by Bangkok bureau; Writing by Robert Birsel; Editing by Alan Raybould and Alex Richardson)

Russia has withdrawn most troops from Ukraine border - U.S. official

Posted: 30 May 2014 03:20 AM PDT

SINGAPORE (Reuters) - Russia has withdrawn most of its troops from the Ukrainian border, but seven battalions, amounting to thousands of men, remain, a U.S. defences official said on Friday.

U.S. Defences Secretary Chuck Hagel, in Singapore to attend a weekend security conference, has called the withdrawal of thousands of Russian troops from the border a promising sign, but said all troops positioned there earlier this year needed to be moved back.

The defences official said that most of the troops had been pulled back.

"The majority have gone," he told reporters. "But seven battalions remain." The official said he had no figure for the number of troops that had withdrawn. "But ... thousands still remain," he said.

Hagel, speaking earlier on the plane taking him on a trip to Asia and Europe, said it was known that "thousands of Russian troops have been pulled back and are moving away. We also know that there are still thousands of Russian troops still there that have not yet moved.

"Any time you are moving troops away and equipment and assets away, that's promising, but they are not where they need to be and won't be until all of their troops that they positioned along that border a couple of months ago are gone.

The U.S,-led NATO military alliance has previously estimated that Russia had around 40,000 soldiers close to the border.Ukraine's acting defences minister said on Friday that Ukrainian forces would press ahead with a military offensive against rebels in the east until peace and order had been restored there.

Speaking after 14 servicemen, including a general, were killed on Thursday when rebels shot down an army helicopter, the minister, Mykhailo Koval, said: "Our given task is to bring peace and order to the region."

(Reporting by David Brunnstrom; Editing by Ron Popeski)

Two killed after peacekeepers clash with protesters in Central African Republic

Posted: 30 May 2014 03:15 AM PDT

BANGUI (Reuters) - At least two people were shot dead on Friday by Burundian peacekeepers who clashed with protesters in the capital of Central African Republic, in a second day of violent demonstrations after an attack on a church ignited tensions.

A spokesman for the African Union peacekeeping mission said Burundian troops returned fire after being shot at by members of a crowd calling for their departure and the resignation of interim President Catherine Samba-Panza.

However, the protesters said they were unarmed and had come to hold talks with the head of the U.N. mission, which has its headquarters nearby.

"There were some armed demonstrators and they attacked the Burundian base. The Burundians responded with live fire and there were two people killed and two wounded amongst the assailants," Francis Che, spokesman for the African Union mission (MISCA), told Reuters by telephone.

"The crowd has dispersed. We recovered two weapons and a hand grenade."

Demonstrators had gathered outside the headquarters of the U.N. mission in Bangui - which is some 200 metres (yards) from the Burundian base - from around 5 a.m. (4 GMT) on Friday, demanding the departure of the Burundian troops, whom they accuse of favouring Muslims.

Protesters told Reuters TV that five people were killed in the clashes.

"We gathered here this morning, with women and children and with no weapons, and the Burundians have killed five people," said Eric Sako, a businessman. "We were in the U.N. offices trying to explain things, and they opened fire on us." Frustration is running high at the failure of the interim government and some 8,000 African Union and French peacekeepers to return peace to country. It was stoked by Wednesday's attack on the Fatima church by Muslim gunmen in which some 15 people killed.

Youths burnt tyres at roadblocks on main roads in Bangui on Friday while, in several neighbourhoods, residents beat pots and pans in an early morning protest, and others fired guns into the air. French peacekeepers used bulldozers to remove the barricades on Friday.

The country has been gripped by ethnic and religious violence for more than a year since Seleka rebels, who are mostly Muslim, seized Bangui in March 2013. The Seleka left power in January under international pressure and since then the anti-balaka militias have attacked on Muslims.

Those attacks have largely driven Muslims from the capital and areas to the west, effectively partitioning Central African Republic, whose northeast is controlled mainly by Seleka.

Following Wednesday's attack on the Fatima church, Sebastien Wenezoui, a leader of the anti-Balaka Christian militia, accused international forces of abandoning the church to its attackers and singled out Burundian soldiers and French soldiers for being too slow to respond.

(Additional reporting by Hubert-Mary Djamany in Bangui and Daniel Flynn in Dakar; Writing by Daniel Flynn; Editing by Bate Felix)

Kredit: www.thestar.com.my

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