With a general election credibly within sight after three years of delays, Thais have become more upbeat about politics. Regardless of the election’s outcome, policy continuity and a smooth political transition are likely under the junta’s reforms, which entrench the long-term influence of the military and will constrain future elected governments. 

FTCR’s Political Sentiment Index (PSI) for Thailand climbed 6.7 points to 51.4 in the third quarter, the first increase since late 2016, as political activity ramps up. The index also returned to positive territory for the first time in five quarters. 

The improvement in the PSI ahead of the election reflects increased optimism that the poll will indeed finally be held, pushing the country out of political limbo. The military government continues to state its default plan for February elections, and current laws say these must take place by May. We believe a small delay into April or May is possible, but no later. Since the May 2014 coup, the junta has repeatedly pushed back the timing for a poll, which was first promised for late 2015. 

FTCR’s third quarter survey found that 72 per cent of respondents believe the election will take place by the end of 2019, versus 28 per cent who forecast 2020 or later, the highest margin since we began asking this question. This suggests a growing belief among consumers that the junta is acting in good faith to move the country towards a poll after years of delay. 

The resurgent economy is also a significant factor in the PSI increase, which correlates with an eight-point jump in the Economic Sentiment Index (ESI) for Thailand. Since 2014, the PSI has generally moved with the ESI, reflecting dissatisfaction with the government over sluggish growth. The economy is now recovering, and full-year GDP growth of around 4.5 per cent is expected, which would be the fastest in six years. 

Puea Thai still the favourite 

Although the main parties have not finalised their leadership or platforms, the pre-election landscape is becoming clearer. A new military-linked party has entered the fray, fuelling speculation of a bid to retain the premiership by Prayuth Chan-ocha, the army-chief-turned-prime minister who led the 2014 coup. 

However, the Puea Thai party, which led the last elected government, is under investigation over the continued influence of Thaksin Shinawatra, the former prime minister who was ousted in a coup in 2006. Parties linked to Mr Thaksin have taken every national election since 2001. Despite living in exile for over a decade, he remains the most polarising and significant figure in Thai politics. 

Puea Thai has set up proxy parties in case the military government forces it to disband, a fate suffered by both its precursors. 

The next election will be held under a 2017 constitution that is widely seen as disadvantageous to major parties. However, recent polls show that Puea Thai remains by far the most popular party, indicating that it has the best chance to win a majority or lead a coalition government in the 500-seat House of Representatives. 

In the 2011 election (the most recent where the outcome stood), Puea Thai won 265 of the 500 seats, versus 159 for the Democrats and 76 for all other parties. 

There is a smaller probability of a Democrat-led coalition, or a coalition around the pro-junta faction. 

20 years of ‘guided’ democracy 

Even if Puea Thai wins, the military will continue to loom large over the government. Perhaps most importantly, the new constitution stipulates that the entire 250-member senate will be directly or indirectly appointed by the junta’s National Council for Peace and Order. The upper house, which has veto powers over legislation, could also vote with the lower house to block the newly formed government’s selection of prime minister. This makes a future Puea Thai administration much less likely to nominate another explicit proxy for Mr Thaksin, as it did in 2011 with his sister Yingluck. 

The new charter also includes a mechanism to replace the sitting premier with an outside prime minister in a so-called “time of crisis”, while a 20-year plan called the National Strategy Act requires future governments to pursue a broad set of economic and social goals, with political and even criminal punishments for failure to comply. Therefore, controversial or anti-military actions taken by a new Puea Thai administration, such as amnesty for Mr Thaksin — a key flashpoint for anti-government protests in 2013-14 — would be extremely risky. 

The general’s new clothes? 

Another question is Mr Prayuth himself. The junta leader has indicated that he may enter politics and recently launched a highly polished campaign-style website and social media presence that appear to be testing the waters. 

An electoral return to the premiership would be a controversial move, given Mr Prayuth’s leading role in toppling the elected Puea Thai government and promulgating the pro-military constitution. A technicality of election law appears to disqualify him from running directly for a seat in parliament, but he could be chosen as the prime ministerial candidate of the new government. 

However, given the constitutional restrictions Mr Prayuth has put in place on future elected governments, we believe it is more likely that he will step away from active politics, perhaps to return later through a congressional vote if instability returns or a Puea Thai-led administration tries to upend the junta’s political changes.

FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and south-east Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors.