Bloomberg Thai Troops to Clear Protesters Outside Main Demonstration Site

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May 14 (Bloomberg) -- Thai authorities ordered troops to clear hundreds of anti-government demonstrators outside the main protest site, risking clashes after a night of sporadic violence.

The red-shirted protesters threw bottles toward a line of troops several hundred meters away on an eight-lane boulevard, images on Thai PBS television showed. Gunfire could be heard in the background and a burning tire on the road billowed black smoke.

Security forces “will prevent protesters from gathering in other areas” outside the barricaded zone, army spokesman Sansern Kaewkamnerd told reporters today. About 5,000 demonstrators remained on site, he said.

Gunfire and grenade attacks last night after the shooting of a renegade general at the camp killed one protester and injured 11 others, Bangkok’s medical emergency unit said. Authorities extended an emergency decree to northern parts of the country to cover 17 of 76 provinces.

“The government is clearly worried that whatever happens in central Bangkok will trigger a much broader pattern of unrest through areas that are very loyal to the Red Shirts,” said Michael Montesano, a visiting research fellow at Singapore’s Institute of Southeast Asian Studies. “That is where things really get scary and where the grip of the Thai government gets very shaky.”

Thailand’s SET Index fell 1.2 percent at the mid-day break after dropping as much as 1.4 percent on concern further bloodshed will deter tourism and curb economic growth. The benchmark has risen 3.1 percent this year, compared with a 0.5 percent decline for the MSCI Asia-Pacific Index.

‘Stand Down’

“We’ll be as patient as we can be,” Finance Minister Korn Chatikavanij said in an interview with Bloomberg Television today. “We very much would like a couple hours for protesters to stand down to avoid further violence.”

Major-General Khattiya Sawisdipol, who sided with the anti- government protesters, “can die any second,” Chaiwan Charoenchokethavee, head of Vajira hospital in Bangkok, told reporters. The government is investigating who shot him, Korn said, adding that “it pretty much could be anybody.”

The general “might have been shot by someone on his own side because he was standing in the way of a settlement with the government,” Jacob Ramsay, an analyst with Control Risks Group, said on Bloomberg Television. “If he was shot by the government, they’ve effectively removed the one symbol that was preventing some sort of closure to the protests.”

The cost of protecting Thai government debt from default jumped. Credit-default swaps on Thailand climbed 25 basis points to 140 basis points as of 9:10 a.m. in Singapore, according to Royal Bank of Scotland Group Plc.

Terrorism Charges

Khattiya, who helped build barricades around the business district, was shot during an interview with the New York Times, the newspaper reported. He is one of nine protest leaders facing terrorism charges for their role in violence that has killed 30 people since round-the-clock rallies began on March 12.

“Protesters were counting on him to provide combat experience to the guards” protecting demonstrators, Sean Boonpracong, a spokesman for the Red Shirt protest group, said by phone, referring to the general, who is also known as Seh Daeng. “It’s a psychological blow.”

The Red Shirts, who mostly support ex-leader Thaksin Shinawatra, have defied a state of emergency since April 7. The demonstrators are coordinating with supporters in northern areas of the country to fight back in the event of a crackdown.

Gunfire, Explosions

Gunfire, at times heavy, and explosions could be heard around Lumpini Park, on the outskirts of the protest site. Most high-rise buildings in the area were completely dark overnight and most street lights were off last night.

Behind a barricade of rubber tires and bamboo sticks on one street next to the park, one of about six scattered around the area, about three dozen protesters wore helmets and facemasks. Scores of small bottles filled with gas lay next to the barricades.

“I’m not scared of dying,” said Sorn Omsakul, 34, from northeastern Thailand, dressed in black from head to toe. “We’ve been ready to fight for many days.”

The U.S. Embassy in Bangkok, located on one of the streets the army is trying to clear, is closed today, according to a posting on the embassy’s website. Residents and businesses were asked to vacate the downtown Ratchaprasong shopping district.

Cutting Utilities

The army began cutting electricity, water and phone signals and blocking off roads and canals around the site to “block and squeeze” the area, army spokesman Sansern Kaewkamnerd told reporters. Anyone seeking access to the protest faces two years in jail, according to an announcement read on television.

Prime Minister Abhisit Vejjajiva withdrew an offer to cut short his term and hold a Nov. 14 election when protesters failed to disperse by a midnight deadline. The group backed away from supporting Abhisit’s election plan this week, attaching new conditions, including criminal charges against Deputy Prime Minister Suthep Thaugsuban.

Pro-Thaksin parties have won the past four elections on a platform of improved health care and cheap loans. Abhisit took power in a December 2008 parliamentary vote after a court disbanded the ruling party for election fraud. His Democrat party hasn’t won the most seats in a nationwide vote since 1992.

The Red Shirts will rally “indefinitely,” leader Jatuporn Prompan said yesterday. “We will continue to fight.”

Thai Troops to Clear Protesters Outside Main Demonstration Site - BusinessWeek