BANGKOK, Thailand

It was the 18^th coup in Thailand since 1932, but the first since 1992. Before Tuesday, the Thai military had extricated itself from politics and coups seemed passé, as democracy took root. What led to such a reversal and what are the domestic, regional and geopolitical implications?

The tanks surrounding Government House had yellow ribbons, the ubiquitous symbol of the monarchy, tied to their barrels while soldiers tied them to their epaulets, in a sign of reverence to the King. At the root of this was a class issue: Prime Minister Thaksin Shinawatra and his cronies represent the nouveau riche of Thailand and are despised by the monarchy and the old economic elite, the Sino-Thai taipans. Thaksin sought through his populist policies to make himself more popular than the country's beloved monarch, King Bhumipol Adulyadej. But though the coup is firmly rooted in elite politics, it was justified for several reasons, firstly by the ongoing political stalemate caused by allegations of corruption by Thaksin and his administration.

Many in the security establishment also resent Thaksin, a former policeman, for promoting many of his former colleagues and friends over better-qualified and more senior officers. Thaksin too often interfered in the annual promotions of the military, which the corps saw as its purview. And there was disgust amongst the officer core of both the army and police of political interference in quelling the southern insurgency that has left more than 1,300 people dead in the past 33 months-a conflict that is spiraling out of control.

In Bangkok, the middle class is in a bind. They loathe Thaksin. But they are appalled at the sight of tanks on the street and worry about the long-term economic impact of extra-constitutional remedies. While there was no bloodshed as in the 1976 and 1992 coups, it is a clear step backwards in the country's political development. In the countryside, where Thaksin is immensely popular, there is more unhappiness. Thaksin's populist policies included bt30 per visit medical care program and loans-winning him immeasurable support from the country's still majority rural electorate. 

While the world turned its attention to Thai politics with the coup, the political situation had long been simmering dangerously. The Royal Thai Army commander, General Sonthi Boonyaratglin, who seized power Tuesday in the bloodless coup, is a protégé of General Prem Tinsulrad, himself prime minister from 1980-88 and currently, as the chairman of the King's Privy Council, the King's most important advisor. There had been a war of words between Prem and Thaksin for several years, culminating in a small bomb being detonated outside of Prem's home near the palace in early 2006. It is clear that the coup had the backing of the crown, which has given it a veneer of legitimacy, though Sonthi denies that the crown was involved and insists that the overthrow was his decision alone.

The Deal that Broke the Government

Thaksin and his Thai Rak Thai (TRT) party in February 2005 won the election by the largest margin ever in Thai history. Not only was Thaksin the first prime minister in over a decade to serve a whole term, he was also the first one to win re-election. The TRT's dominance was so near total that parliament, for all intents and purposes, was irrelevant.  Thaksin rose to power in 2000 on a xenophobic populist platform, calling for an end to foreign domination of the Thai economy. His position seemed unassailable.

Then Thaksin, despite his nationalist platform, sold his family's corporation (the largest telecommunication company) to Thamasek, the Singapore government's holding company. It was not just the hypocrisy of the sale of a vital national asset that offended many Thais. No taxes were paid on the nearly $2 billion in profits.

The middle class was galled. Street protests broke out. Thaksin decided to quash dissent by dissolving parliament and winning a new popular mandate in polls held on April 2. The opposition, led by the Democrat Party, successfully boycotted the polls, following Thaksin's refusal to implement political reforms. Though Thaksin's TRT won a plurality of votes, in many districts their candidates did not win more than the 20 percent of votes needed to be elected. A re-election was held, but again the boycott was effective. The Supreme Court in the mean time invalidated the entire election saying that it was held too soon. A new election was scheduled for October 15, but that too was to be delayed, given controversy surrounding new election commissioners.

Following the April election, Thaksin announced that he would not have a position in the next government and was taking a "vacation from politics." He left the caretaker government in the hands of Chidchai Vanasatidya, his most trusted lieutenant. Thaksin quietly returned to government with very little public outcry in May 2006. Since then he headed the caretaker government without parliamentary checks. Though there were three different court cases winding their way through the legal system that could have impacted the future of Thaksin and several other key politicians, he was acquitted a second time the day before the coup.

In the Aftermath

Thailand had emerged, in the past 14 years, as the most stable and economically prosperous democracy in Southeast Asia, with a free press and enshrined civil liberties. These were gradually undermined under Thaksin, but it is hard to see how they will be quickly remedied or how the rule of law will weather extra-constitutional actions. Sonthi announced that a civilian caretaker administration will be put in place within two weeks, by mid-October. He hopes that an election can be held by October 2007. The reality is, though, that Thaksin won two democratic elections and even commanded a strong majority in the elections that were just annulled by the Supreme Court.

The coup could also have a regional impact. While democracy is being consolidated in Indonesia, it has taken many hits in Southeast Asia in the past few years. Malaysia and Singapore remain quasi-authoritarian states. Vietnam, Laos, Burma, and Cambodia remain under one-party authoritarian rule. The Philippine democracy is under strain, with president Gloria Macapagal Arroyo recently surviving her second impeachment. Politically weakened, she has become more dependent on the political support of the politically inclined armed forces. Events in Thailand could encourage the generals in that coup-prone nation.

Still, the Thai economy is likely to rebound, after an initial drop in tourism and a fall in the value of the baht. On Thursday, the first day of training after the coup, the Thai Stock Exchange fell precipitously, but is expected to rebound. The country's economic fundamentals are still sound. Thailand remains an important destination for tourism and foreign investment and exports are booming. The interim government will have to make considerable investments in infrastructure and education, however, both of which fell during Thaksin's term, in order to keep Thailand globally competitive.

The coup leaders have established the Council for Democratic Reform (CDR) and must now find an acceptable front man with administrative experience that is acceptable to the military yet independent enough to assure the international business and diplomatic community. The name most heard is that of the Bank of Thailand Governor M.R. Pridiyathorn Devakula, a well-respected and clean technocrat. Another candidate is former army chief and supreme commander, General Surayud Chulanont, currently a privy councilor-but many see a former army man as inappropriate. Anand Panyarachun, who served as a caretaker prime minister in 1992, has also been suggested.

Sonthi has ordered the state auditor general to continue with her work, indicating that anti-corruption measures will be the priority in the coming months. While they have not explicitly stated so, it is implied that the CDR wants to target the ill-gotten wealth of Thaksin and his cronies in the TRT party. The threat alone has kept Thaksin and his family from returning from London.

But it is unlikely that the CDR will be able to fundamentally change the political system and eliminate the age-old tradition of vote buying, which gives cash-flush parties like the TRT the advantage over smaller and more principled parties like the Democrat Party. The CDR has dissolved the 1997 constitution and has stated its intentions to draft a new charter. Without fundamental electoral reforms, Thai politics could be back to square one in a year's time.

The Insurgency and Washington

Then there is the southern insurgency. Will the CDR and interim administration be better equipped to deal with? At the very least, there will be less political interference in counter-insurgent operations and fewer personnel reshuffles and policy initiatives from an impatient "CEO prime minister." Second, the CDR is likely to implement many of the recommendations of the National Reconciliation Council that Thaksin had blatantly ignored. Though the NRC's recommendations alone will not quell the insurgency, they will have an important impact in regaining the trust of the Muslim community. Third, Sonthi has expressed a willingness to talk with insurgents, though to date only PULO has offered to talk and the aged leaders in Europe have no control over the insurgents. And many in the military establishment including Sonthi, himself a Muslim, have publicly refused to see the insurgency for what it is, denying it any religious overtones or secessionist goals. Nor is the political situation likely to alter the campaign of the insurgents. If anything they may step up attacks in an attempt to provoke a heavy-handed government response. The Muslim provinces have been under martial law for over two and a half years, with little to show for it but an alienated and angry populace.

The U.S. government has condemned the coup and called for the immediate restoration of democracy. U.S. officials were also unhappy about the setback to the Free Trade Agreement that was being negotiated with the Thaksin government and is now on indefinite hold. The policy options for the United States are less clear. Thailand is a major non-NATO treaty partner and an important ally in the war on terror, winning plaudits from the Bush Administration for sending some 130 troops to Afghanistan and 450 military engineers to Iraq. Thailand is also host to the annual Cobra Gold military exercises, which began in 1982 and are now the largest military exercises in the Asia Pacific region. The 2004 exercise included 13,000 U.S. troops and more than 5,000 Thais. Thailand receives considerable military aid, preferential arms sales and training under the IMET program.  Washington is now considering a range of sanctions on the Thai military.

In Thailand so far, the calm after the coup is holding. But the need for reform, the insurgency and country's divisions present durable challenges.

Zachary Abuza is associate professor of political science at Simmons College. He is the author of the forthcoming Conspiracy of Silence, a study of the Thai insurgency.