Thai premier speaks, but not in parliament

BANGKOK - Thailand's new prime minister used his delayed maiden policy speech to lawmakers yesterday to warn that the stalled economy was unlikely to recover as long as the country was held hostage by political conflict.

But the challenges facing Abhisit Vejjajiva's administration were thrown into stark relief when thousands of his opponents surrounded parliament, forcing him to give his speech in the Foreign Ministry.

"Political conflicts that have spread to civic groups could push the economy, along with the tourism industry, into recession if action is not taken quickly to resolve them and revive confidence among investors and foreign tourists," Abhisit said. "These conflicts are the country's weakness, especially at a time the world economy is entering its worst crisis in a century."

The Oxford-educated Abhisit, 44, is Thailand's third prime minister in four months. He came to power after his Democrat Party managed to persuade enough members of the previous ruling coalition to defect when their leader, former Prime Minister Somchai Wongsawat, was banned from holding office because a court had found his party guilty of vote-buying.

But supporters of Somchai and his political sponsor, former Prime Minister Thaksin Shinawatra, question the legitimacy of the new government and have vowed to continue demonstrating until Abhisit dissolves parliament and calls elections.

For most of this year, the deep divisions between the country's conservative middle-class elites and its rural poor paralyzed the ability of Abhisit's predecessors to govern a country sliding into an economic quagmire.

Many had hoped that Abhisit, who is more acceptable to the protesters who have caused so much disruption in recent months, might be able to take the country forward. However, his appointment appears to have galvanized the opposition of other groups.

Thailand relies on exports and tourism for about 70 percent of its national income. Its economy is being squeezed by the twin threats of the global slowdown, which has slashed demand for its main exports, and the damage done to investor confidence by the last six months of domestic political unrest, culminating in the closure last month of the country's two busiest airports.

The new prime minister is expected to launch an ambitious $8.7 billion stimulus program to try to restart the economy. He warned yesterday that unless the government was able to take prompt action, the official unemployment rate could double.