Thai "red shirts" vow to step up Bangkok protest

BANGKOK (Reuters) - Anti-government protesters say they will take their mass rally in Bangkok to "another level" on Wednesday as pressure mounts on Thailand's prime minister to end a tense five-day standoff in the main commercial district.


A supporter of former Prime Minister Thaksin Shinawatra waves a Thai national flag and a flag with an image of revolutionary leader Che Guevara during a rally in the main shopping district of Bangkok April 6, 2010. (REUTERS/Sukree Sukplang)
Red-shirted supporters of ousted former Prime Minister Thaksin Shinawatra gave little away, but said they would surprise the military-backed government with new moves to force an election after nearly four weeks of sporadic protests. Tens of thousands of "red shirts" have occupied Bangkok's Rachaprasong intersection since Saturday, rejecting demands by the government to leave an area lined with posh department stores, which have had to stay closed, and luxury hotels.

"We will take it to the next level," protest leader, Nattawut Saikua, told the crowd late on Tuesday. "We can't say what we will do, we won't give the government chance to prepare."

Investors have remained confident Thailand's government, with its support from military top brass and the royalist establishment, will survive the increasingly bold showdown with the mostly rural and working class protesters.

Foreign investors have been ploughing money into the fast-recovering economies of Southeast Asia and have not left Thailand out despite the political turbulence. Since Feb. 22 foreigners have bought a net $1.73 billion of Thai stocks.

"It's likely to be a volatile session but the big picture is that the market is still in a positive mood. Fund flows into the region were quite good yesterday and oil prices will support energy stocks," Broker Philip Securities said in a research note.

"But the market will closely monitor the political situation. If there is violence, it will trigger a quick sell-off," it said.

The market, which has risen more than 80 percent over the past 12 months, reopens at 0300 GMT after a holiday on Tuesday.

FDI CONCERN

There is concern the crisis could squeeze longer-term foreign direct investment (FDI), which was has been volatile since a 2006 military coup that ousted the twice-elected Thaksin after allegations of corruption.

"I've been getting a sense for the first time in the more than three years since the coup that FDI -- including our client base -- is really taking a hard look at Thailand long-term because of this," said Roberto Herrera-Lim, an analyst at consulting firm Eurasia Group.

"They see that the conflict is much deeper than the elite conflict of the past."

Abhisit is facing pressure from Bangkok's elite and middle class and even his own government to halt the rally, but has held back to avert a confrontation that many believe would cause even greater damage. Threats to arrest the protesters have not been carried out, emboldening the movement.

"The police, the government and myself are still very committed to enforce the law and solve the problem," Abhisit said in a televised national address on Tuesday. "We want to see the country being peaceful."

Most analysts say further dialogue is Abhisit's only way out, but protest leaders have refused.

The "red shirts" have taken aim at the urbane, Oxford- and Eton-educated economist, whom they see as a front man for an unelected elite and military that is secretly intervening in politics and operating with impunity.

They say Abhisit, who came to power in a 2008 parliamentary vote after courts dissolved a pro-Thaksin ruling party, should call an election and let the people choose their government. "Red shirt" leaders say they will respect the result.

"The opposition leaders now have claim to partial moral authority based on the grievances of rural folk and the downtrodden," said Thak Chaloemtiarana, a Thai academic at Cornell University in the United States.

But the protesters risk losing support if shops remain shut and high-end hotels such as the Four Seasons and Hyatt remain blocked, and if traffic remains disrupted, analysts said.

"They run the risk of this backfiring," said Joshua Kurlantzick of the Carnegie Endowment for International Peace, a U.S. think tank.

"At some point they are going to seriously anger Bangkokians. They don't want to totally alienate Bangkok opinion, especially the opinion of working class people in the capital whose jobs might be affected."