Few obstacles as behind-scenes deal struck

A behind-the-scenes political deal has been struck. The Bhum Jai Thai Party and other coalition partners are not likely to create trouble by voting down the measures. Suthep Thaugsuban, the deputy prime minister, is lobbying hard for passage of the financial measures, as well as the Budget Bill for fiscal 2010.

Bhum Jai Thai has now accepted the reality that it will not get the NGV bus-leasing deal worth Bt64 billion it so craves for. The Democrats have delayed the bus deal until next month, forcing Bhum Jai Thai into a situation where it has to vote for the important pieces of legislation first. But this high-stakes game is too dangerous, for it can potentially bring down the government. So both the Democrats and the Bhum Jai Thai have agreed to abandon the bus deal and go for other projects instead.

In the meantime, the Abhisit government is struggling to fill up its dwindling coffers through borrowing. The public finances are under strain.

Although the bills might finally sail through Parliament, it will not be a smooth ride to borrow Bt800 billion from the market. Of the total bank deposits of Bt6 trillion-Bt7 trillion, some Bt1.5 trillion is held by small companies and individual Thais. The small companies would need Bt700 billion for cash-flow management, while individuals are holding the rest.

Once the Finance Ministry issues bonds worth Bt800 billion, it will not easily find the subscribers even though it will try to introduce attractive yields.

About Bt400 billion will go mainly to paying the salaries of civil servants and other mandatory expenditures. The other half - introduced as an executive decree - will be earmarked for spending on other projects, including about Bt200 billion for the mass-transit system and other projects belonging to Bhum Jai Thai.

Abhisit is now learning Thai politics the hard way. He will try to keep the country moving with the passage of the three pieces of legislation, before settling the score with his coalition partners later on. But one must not bet that he will enjoy a smooth ride from here. Until the votes are counted, nothing is certain.