Foreign media reports leaked Paetongtarn clip causes stock, political chaos
Foreign media reports leaked an audio clip between Paetongtarn and Hun Sen, with the PM blaming the military. The fallout causes a drop in the Thai stock market and escalates political turmoil, intensifying the border dispute.
According to Bloomberg, Thailand's Prime Minister has blamed her own military for escalating the border dispute with Cambodia, following leaked information that has sparked fresh political turmoil in the country, with opposition groups calling for her resignation.
The report also stated that Prime Minister Paetongtarn Shinawatra criticised former Cambodian leader Hun Sen for releasing a phone conversation on June 15. The 17-minute personal conversation, which was posted in full on Hun Sen's Facebook, should never have been recorded or shared, according to Paetongtarn.
This incident has put the Thai leader under pressure, with the largest coalition partner threatening to withdraw from the government. As a result, Thailand's main stock index dropped to its lowest point in two months on Wednesday.
The report highlighted that Paetongtarn explained her softer tone and empathetic remarks during the conversation with Hun Sen as part of a strategy to ease tensions along the border, describing it as a negotiation technique.
"I acted in such a way with the goal of maintaining peace and protecting our sovereignty. It is now clear that his real intention was to win over his own people, without regard for the impact on bilateral relations," Paetongtarn said.
The new political turmoil may make foreign investors wary, as Thailand has seen net foreign stock sales of US$2.3 billion this year, and the country's main stock index has fallen 22% this year.
This represents one of the worst performances globally, driven largely by concerns over a potential 36% US tax, which could exacerbate the economic growth outlook and negatively affect corporate earnings.
Reuters reported that on Wednesday, the Bhumjaithai Party announced its withdrawal from the government, marking a serious blow to the Prime Minister, who is already facing a crisis. This move has left her coalition government with only a slim majority.
Bhumjaithai, the second-largest party in the coalition and holding 69 seats in the House of Representatives, stated that the decision was driven by the negative impact caused by the leaked audio clip of a phone conversation between Paetongtarn and Hun Sen. Tensions between Thailand and Cambodia have been escalating over the ongoing border dispute.
The Bhumjaithai Party pledged to work with the Thai people in supporting the military and officials in their efforts to protect the nation's sovereignty, territorial integrity, and national interests.
The withdrawal of Bhumjaithai has left Paetongtarn's government hanging by a thread, facing plummeting popularity as she struggles to revive the stagnant economy and potentially faces high US taxes unless she can negotiate a reduction.
Paetongtarn, 38, a political newcomer and daughter of the influential former Prime Minister Thaksin Shinawatra, became a prominent figure less than a year ago when she was appointed Thailand’s youngest-ever Prime Minister following a court ruling that ousted the previous leader. However, her position now seems increasingly fragile, with growing attention turning to the remaining 10 coalition parties and whether they will follow Bhumjaithai's lead.
The unresolved border dispute with Cambodia has sparked concerns of potential confrontation between the two countries, with both sides amassing troops. Paetongtarn is facing public criticism for her soft diplomatic approach, which contrasts sharply with the military's more aggressive stance.
