Rising Tensions Threaten Pheu Thai’s Digital Wallet Scheme and Coalition Stability

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Early signs of coalition disunity are emerging, which could culminate in the demise of the much-touted digital wallet handout scheme.

Some critics are beginning to suspect the populist programme may not see the light of day and that the ruling Pheu Thai Party, ironically, may not be all that upset if the axe falls on it. The critics feel the scheme hinges on the strength of ties between the coalition partners. But by the looks of it, the rising concerns about the government’s costly handout policy are not unwarranted.

Pheu Thai has touched a raw nerve with the major rightist coalition partners, Bhumjaithai and the United Thai Nation (UTN) Party, despite government figures repeatedly dismissing the notion of an internal rift between them and the ruling party. Although this government has entered its eighth month in office, some observers reckon it has managed to do surprisingly well to preserve coalition unity, considering the party backgrounds are worlds apart.

Pheu Thai once had an adversarial relationship, particularly with the UTN, which was still a part of Palang Pracharath—also now a coalition party—under the previous administration headed by former premier Gen Prayut Chan-o-cha. He led the May 2014 coup that ousted the then Pheu Thai-led government.

Pheu Thai has maintained a relatively unassailable connection with Bhumjaithai. For a long time, Bhumjaithai has openly declared it makes enemies with no one in politics and has never spoken or acted ill against any party. Its “central” stance and its medium size lend the party an ideal position to join any coalition government. But when it came to the legalization of cannabis, Pheu Thai and Bhumjaithai have not seen eye to eye. The policy, advocated by Bhumjaithai when it was in the Prayut Chan-o-cha administration, was opposed by Pheu Thai during and after the general election last year.

Political observers were betting on the two parties finding common ground and reconciling their differences now that they are in the same coalition. But as it has turned out, the issue has not only gone unresolved; it is looking to have led to cracks in government unity.

A few months ago, Prime Minister Srettha Thavisin told France 24, a state-owned news outlet, of his plan to rein in the use of cannabis, which was decriminalized in 2022. He reportedly spoke in favor of reclassifying cannabis as a narcotic, arguing the social ramifications of cannabis legalization outweigh the economic gains from the plant being opened to medical use and for research purposes. The same message was relayed to the public early last month by Public Health Minister Somsak Thepsutin who reaffirmed Mr Srettha has set a deadline for the ministry to re-list cannabis as a narcotic before the year is out. Mr. Somsak insisted the premier made it a point to have the plant recriminalized “the sooner, the better”.

Avoiding a confrontation with Pheu Thai, Bhumjaithai leader and Interior Minister Anutin Charnvirakul said the plan to reclassify cannabis as a narcotic should be studied and assessed by several health committees before any action is taken. Although Bhumjaithai had pushed for the decriminalization of cannabis, Mr Anutin, a former public health minister, said he would accept the outcome if health committees opt to reclassify the drug.

Meanwhile, with the UTN, Pheu Thai was testing the party’s patience and friendship when newly appointed Finance Minister Pichai Chunhavajira was accused of unfairly delegating a single agency, the Public Debt Management Office, to one of his three deputies, Krisada Chinavicharana from the UTN. Mr Pichai, formerly an adviser to Mr Srettha, divided up the other agencies among his other deputies, Julapun Amornvivat and Paopoom Rojanasakul, who are both from Pheu Thai.

The uneven split forced Mr Krisada to quit as deputy finance minister, it was reported. In his resignation letter seen by the media, Mr Krisada said he resigned because he and Mr Pichai had a different work philosophy and that Mr Pichai failed to treat him with respect when they worked together. A source said Pheu Thai may be rubbing Bhumjaithai and UTN up the wrong way for a reason.

“Imagine the friction getting out of hand and the two parties deciding to be vindictive and voting down the bill to procure the finances to fund the digital wallet scheme in parliament. Pheu Thai may be thankful they did that,” said the source. The source argued Pheu Thai may secretly be hoping and praying the digital wallet scheme meets its demise.

The policy, if allowed to materialize, could run the huge risk of breaking the law over its planned procurement of a loan from the Bank for Agriculture and Agricultural Cooperatives (BAAC) to partially provide the scheme with its needed financial lifeline. The wallet scheme risks defying the BAAC law, which forbids the bank from lending to the government for the purpose of handouts. If the bill is sunk in parliament, the two coalition partners would be faulted for derailing Pheu Thai’s flagship election policy. But if this occurred, Bhumjaithai and UTN would have to exit the government. They may instantly be replaced by the main opposition Move Forward Party, according to the source.

The return of Wissanu Krea-ngam to politics as Prime Minister Srettha Thavisin’s adviser left observers wondering about Pheu Thai’s resources when it comes to legal experts. Mr Wissanu has worked in 12 governments and under eight former prime ministers, during which time he played a prominent role as a government legal expert. So, when he announced in August last year that he was done with politics, some observers doubted whether he would or actually could wash his hands of it.

Even so, given the criticism he has received from Pheu Thai heavyweights, they did not expect him to assume any role in the Pheu Thai-led coalition. As it turned out, Mr Wissanu appeared to be “one of many” legal experts Mr Srettha turned to for advice as he is embroiled in a case in the Constitutional Court over his appointment of controversial politician Pichit Chuenban as a PM’s Office minister in the recent cabinet reshuffle. Pichit is off the hook because he resigned from the cabinet shortly before the Constitutional Court agreed to hear a petition lodged by 40 senators over his controversial appointment. But Mr Srettha, who signed off on Pichit’s appointment despite the latter’s questionable background, may be removed from office if the court agrees he violated cabinet minister ethics rules.

Pichit served jail time for contempt of court in connection with an attempted bribery case when he represented now-paroled former premier Thaksin Shinawatra, who is widely respected in Pheu Thai, in a controversial land deal case in 2008. On June 25 that year, the Supreme Court sentenced Pichit and two of his colleagues to six months in prison after they tried to bribe Supreme Court officials by handing them a paper bag containing 2 million baht in cash a fortnight earlier. Based on media reports, when Mr Srettha approached Mr Wissanu to assist him, the prime minister offered him a deputy prime minister post. But Mr Wissanu turned it down for a number of reasons, including health problems. The prime minister then asked Mr Wissanu to become an adviser instead. Mr Wissanu declined again because there were several legal experts in the coalition government ready to lend a hand. He eventually gave in when Mr Srettha insisted on having a politically neutral adviser.

However, several analysts find it hard to believe that Mr Wissanu would accept the job simply because he could not resist the call of a prime minister in need. They reckoned Mr Wissanu took the job at the urging of key figures who have no better choice than Mr Srettha who they think can serve as a link between the conservative camp and Thaksin, the alleged de facto leader of the ruling party.

Phichai Ratnatilaka Na Bhuket, a lecturer from the National Institute of Development Administration (Nida), said Mr Srettha is unlikely to step down over the controversial appointment of Pichit and the prime minister will use every option he has to stay in power. At the same time, the conservative camp also needs Mr Srettha to remain and Mr Wissanu, who has decades of legal wisdom under his belt, is expected to help him navigate the legal minefield and ensure he stays premier for as long as possible, according to Mr Phichai.

However, the analyst does not believe that Mr Wissanu’s legal assistance will be extended to Thaksin, who faces an indictment on lese majeste and computer crime charges related to an interview given to the South Korean Chosun Ilbo newspaper in 2015. Thaksin is alleged to have defamed the monarchy with his comments where he claimed privy councillors supported the 2014 coup that ousted the government of his younger sister Yingluck Shinawatra. On May 29, the attorney general decided to indict Thaksin but could not arraign him as planned because his lawyer submitted a medical certificate stating the former premier had Covid-19 and needed to rest. Thaksin is scheduled to appear before prosecutors on June 18 so the indictment process can begin.

Like other political pundits, Mr Phichai said the indictment against Thaksin is a warning from the conservative establishment for him to toe the line after he sought to regain a prominent role in politics. Thaksin fled Thailand in 2008, shortly before the Supreme Court convicted him for helping his then-wife Khunying Potjaman Na Pombejra buy prime land in the Ratchadaphisek area at a discount while he was prime minister. He returned late last year amid rumours about a deal being struck with the conservative camp. According to Mr Phichai, Thaksin is highly likely to flee again at the first sign he will not be granted bail.

“If there are negotiating skills left in him, Thaksin is likely to be granted bail [when he reports for the indictment.] If bail is denied, it means the deal has collapsed,” he said. A source close to Thaksin said the former premier, who has kept a low profile since the indictment issue arose, is still in the country but it is anybody’s guess if he will turn up for the June 18 appointment with the prosecutors.