UPDATE 3-Thai prime minister survives no-confidence motion

* Debate follows worst political violence in modern
Thailand

* Coalition still behind PM Abhisit but rift emerges
(Adds comment from prime minister, detail)

By Pracha Hariraksapitak

BANGKOK, June 2 (BestGrowthStock) – Thailand’s prime minister
survived a parliamentary no-confidence vote on Wednesday
brought by the opposition after weeks of political protests
during which 88 people were killed and both tourism and the
economy suffered.

The victory will give Prime Minister Abhisit Vejjajiva some
political breathing room, easing pressure from within
parliament to hold a quick general election.

But the narrow margin of his victory highlighted an
unstable relationship within his six-party ruling coalition
that was stitched together in December 2008.

The opposition had accused the government of violating the
human rights of thousands of anti-government protesters whose
nine-week demonstration from mid-March descended into urban
warfare and the worst political violence in modern Thai
history.

The government also stood accused of corruption and
economic mismanagement, while the foreign minister faced
accusations of disloyalty to the monarch — a serious
allegation in a country with some of the world’s toughest
lese-majeste laws.

After two days of parliamentary grilling broadcast live on
television, Abhisit won 246 votes with 186 against.

“Abhisit has emerged reasonably strong from the debate, at
least among the powerful middle classes,” said Sombat
Thamrongthanyawong, head of the National Institute of
Development Administration.

“Since he is the incumbent who has support of the
coalition, he won’t feel the need to go to the polls soon,” he
said.

But other cabinet members won by narrower margins, in some
cases winning barely half of the 475 parliamentary votes.

The vote threatens to widen a rift between two small
coalition parties after a faction in one withheld support for
some ministers from the other.

Abhisit said he had assigned his deputy to smooth over the
rift and make sure it did not undermine stability.

Stock investors had expected Abhisit to win the vote and
the benchmark SET index (.SETI: ) ended 1.18 percent higher after
the central bank kept its policy interest rate unchanged.

Separately to events in parliament, the central bank left
its main interest rate unchanged at 1.25 percent but said it
was ready to raise it in July if there was more stability and
euro zone problems eased. [ID:nSGE65103A]

The economy expanded faster than anticipated in the first
quarter of 2010 but activity slowed in April, partly because of
politics.

The country’s main airport operator (AOT.BK: ) said it was
confident of making a net profit in April-June, although
earnings would be lower than the previous quarter as the
violence had dragged down passenger numbers.

“EXCESSIVE MEASURES”

The opposition Puea Thai Party, the latest in a series of
political parties led or backed by ousted former prime minister
Thaksin Shinawatra, said the government was at fault for the
weeks of violence in which nearly 1,800 were wounded.

Its speakers said excessive measures were used by troops in
attempts to surround two protest sites before they finally
dispersed the demonstrators on May 19.

The Oxford-educated Abhisit said shadowy militants among
the peaceful demonstrators triggered the bloodshed to discredit
his government. He promised an independent investigation.

Chalerm Yoobamrung, chairman of the opposition, said on
Tuesday Foreign Minister Kasit Piromya had tried to undermine
the country’s revered monarchy with “wretched and vile”
comments about reform of the royal institution — a rare
accusation against the royalist-backed government.

Chalerm was referring to comments made by Kasit in a speech
in April at Washington’s Johns Hopkins University, in which he
said Thailand should consider how the monarchy could be
reformed in a globalised world.

Lese-majeste, or insults to the royal institution, carries
a punishment of up to 15 years in prison in Thailand. The
Democrat Party-led government is popular among royalists and
few allegations of disloyalty have been made against it.

The mostly poor rural and urban protesters, broadly allied
with Thaksin, had demanded an early election, saying Abhisit
had no popular mandate after coming to power in a parliamentary
vote at the head of a coalition assembled with help from the
military.

Abhisit says he was voted into office by the same
parliament that picked his Thaksin-allied predecessors.

Puea Thai was formed after the ruling pro-Thaksin People’s
Power Party was dissolved for electoral fraud. Its previous
incarnation, Thai Rak Thai, was disbanded after a 2006 coup
that removed Thaksin, who lives in self-imposed exile to avoid
a jail term for graft and new charges of terrorism.

Stock Trading

(Writing by Ambika Ahuja; Editing by Robert Birsel and Paul
Tait)

UPDATE 3-Thai prime minister survives no-confidence motion