Even after Thaksin's self-imposed suspension from politics, there is no guarantee that the political climate will clear any time soon. There are technical hurdles, particularly relating to the workability of the House of Representatives, which still has dozens of unfilled or unfillable seats, the possibility of a delay in the election of the next prime minister and formation of a provisional government, which in all likelihood will be led by the much-reviled Thai Rak Thai Party, not to mention the contentious political reform process.

The political uncertainty, if prolonged much longer, will begin to weigh on the country's gross domestic product (GDP), which was previously projected to rise by 5 per cent this year. The World Bank is the latest to caution about a significant drop in economic growth if a new government fails to materialise in the next few months.

In the World Bank's best-case scenario - in which a new government can be set up sooner rather than later - the expected higher export growth and slower growth of imports this year could push GDP growth up to 5 per cent, from 4.5 per cent last year, while growth of imports could fall to 6.6 per cent, from 9.3 per cent last year.

But other fundamental economic indicators do not appear very encouraging. Domestic demand has already been affected negatively by political uncertainty, depressed confidence, rising real interest rates and high oil prices.

Growth in private investment has already been revised down from 11 per cent to 9.5 per cent, as investors remain jittery about political uncertainty and external risk factors. Public investment does not look good either, with the expected growth for the year again revised down to 6.5 per cent, if not lower. The previous Thaksin government's plan to invest Bt290 billion on infrastructure mega-projects this year is unlikely to be implemented in the second half as earlier scheduled.

Growth of foreign direct investment is expected to stall this year, not only because of the delay in mega-projects but also because the prolonged political turmoil has compelled foreign investors to postpone many investment plans.

The caretaker Thaksin government, which is on the way out, has lost control of economic stewardship since the Thai Rak Thai leader and his family controversially sold their controlling stake in Shin Corp, a telecom conglomerate founded by Thaksin, to Temasek Holdings of Singapore for a tax-free Bt73.3 billion. That transaction, widely seen as a blatant conflict of interest in addition to obvious regulatory breaches, together with pre-existing corruption scandals and other anti-democratic tendencies, triggered an anti-Thaksin campaign that ultimately pressured him to step aside.

The culture of deceit and corruption allegedly perpetrated by Thaksin and his Thai Rak Thai Party over the past five years also explained deep public suspicion about the government's handling of economic liberalisation programmes, such as the foiled partial privatisation of the Electricity Generating Authority of Thailand, the state power company. The Supreme Administrative Court delivered a final blow to the Thaksin government's credibility when it ordered the privatisation to be abandoned because it was fraught with conflict of interest and other irregularities.

In this context, the new prime minister and the emerging provisional government will have to rise to the great challenge of restoring public confidence. This is the single most important factor to determine whether they will be able to put the political system on an even keel and the economy back on track for strong and sustainable growth. To do this, they need to seek consensus on political reform and economic and social development strategies through brainstorming with a broad cross-section of Thai society and arrive at common national development objectives. In other words, they need to make a clean break from autocratic Thaksin's corruption-prone legacy.