Following last night's implementation of emergency rule in Thailand for a period of 60 days, where the ongoing clashes between protesters and the government mean the economy is likely set to grind to a halt at least judging by the constant downward revisions in the country's GDP, the default risk of Thailand just jumped to a fresh one year high, rising to 159 bps, or double where it was in May of this year (but still well below the 240bps hit at the peak of the European crisis in September 2011).
[6]
However, since tensions do not appear to be getting resolved, expect this particular CDS to continue drifting higher, especially following news that the Thai leader of a pro-government group was shot last night.
From the NYT [7]:
A leader of a pro-government faction was shot and wounded outside his home in northeast Thailand Wednesday, one day after Thailand’s prime minister declared the imposition of emergency rule in Bangkok and surrounding areas as tensions in the country escalated.
[8]
Kwanchai Praipana, who runs a group of so-called red shirts that supports the government, was shot in Udon Thani Province in what appeared to be a politically motivated attack, the police said.
“From what we saw on CCTV, a bronze pickup truck drove by and several rounds were fired at the house,” Kowit Tharoenwattanasuk, a police colonel, told Reuters. “We believe this is a politically motivated crime.”
The shooting of Mr. Kwanchai, who has thousands of followers, came as the country’s prime minister, Yingluck Shinawatra, sought to counter the increasingly aggressive moves of antigovernment protesters on the streets of Bangkok. Her declaration of emergency rule on Tuesday suggested a more forceful posture toward protesters who have occupied parts of the city during the past two months and are seeking to overthrow the government.
But officials said they had no plans to crack down on protesters, who have escalated their campaign over the past week by blocking government offices, taking over major intersections and staging daily marches across Bangkok. The emergency decree enacted Tuesday gives the government the power to invoke curfews, censor the news media, disperse gatherings and use military force to “secure order.”
More importantly, those wondering if the current episode will degenerate into the same lethal clashes as were last seen in 2010 when dozens died, are keeping a close eye on what the local army is doing. Here it is in a nutshell from Bloomberg:
Thai army Chief Prayuth Chan-Ocha says the military will provide needed support to police in managing violence linked to anti-govt protests in Bangkok.
Prayuth declines to comment on whether it was necessary for the govt to use emergency decree; On Jan. 20, he said the situation now was not the same as in 2010, the last time the emergency decree was used to control protests.
“It is worrying that divisions in society and families have widened,” Prayuth tells reporters. “I’m concerned how we can live together if people are divided and don’t lower the degree of violence. If conflicts remain, no matter how we enforce the law, it will be dangerous”
Prayuth urges people on both sides of the political divide to hold talks to “find a way out” and says using violent tactics to curb protests “could worsen the situation”
One thing is sure: no matter if Thailand manages to temporarily shove the current bout of social anger under the rug, such escalations in which the poor, with little to lose, lash out against their governments, are sure to become a far more frequenty fixture of daily lives. Let's hope that the Davos billionaires who are meeting right now to fix just this thing, have a quick and painless resolution to this biggest problem modern society is facing. We are not holding our breath.