From Bangkok's The Nation, Jan. 4:

Blasts shatter hopes for reconciliation
The bomb blasts that hit Bangkok on New Year's Eve signalled that the worst is yet to come. The explosions, which killed three people and injured almost 40, were certainly not the work of international terrorists, who typically direct their attacks at large targets for maximum impact and exposure -- that much is certain. However theories and counter-theories abound regarding the other two key suspects -- southern insurgents and the remnants of the previous regime. Some analysts have ruled out militants from the deep South on the grounds that it would be unlikely for them to want to venture beyond their accustomed areas. Besides, the manner in which the bomb devices were planted in eight different locations in Bangkok was too sophisticated for southern insurgents.

However, some military insiders have refused to dismiss the role of southern insurgents too easily. While a stepped-up campaign of terror spreading to Bangkok makes little strategic sense, nobody expected the problems in the deep South to escalate to this level either. After all, the militants did choose a period around this time of the year to launch their war of terror in the region a few years ago.

Those who believe that national politics were behind the bombings point to the bomb explosion in front of Privy Council President Prem Tinsulanonda's residence and the car bomb incident allegedly plotted against ousted prime minister Thaksin Shinawatra. They believe that, as in these two previous incidents, the New Year's Eve bombs seemed to have the signatures of people in the Army written all over them.

Few political conspiracy theorists believe that members of the "new power" associated with the Council for National Security and the [Prime Minister] Surayud [Chulanont] government could have staged the attacks, a foolish act at a time when both are having great difficulty building trust and maintaining political stability. The "new power" has only been around for three months - too short a time to plot something that risky.

Both the coup leaders and the Surayud government have been on the defensive all along for failing to take tough action against the remnants of the previous regime, which is obviously out to reclaim its power. The greatest suspicion has fallen on the remnants of the previous regime, with both Sonthi and Surayud claiming that those who "have lost political benefits" are responsible for the bomb blasts. Thaksin wrote a letter from China to defend himself. He also asserted that it was possibly the work of southern insurgents, who during his premiership staged an attack on Hat Yai. The police support Thaksin's theory that it could have been the work of southern insurgents.

Officials of the "new power" were initially reluctant to take tough action against remnants of the old regime for fear of creating a backlash. The National Counter Corruption Commission and the Assets Examination Committee have been honing in on the corruption and tax scandals of the previous government, causing bitter dissatisfaction among members of the "old power" who might be motivated to strike back to defend huge fortunes.

Thailand, once again, is being driven into a dead end. If the "new power" didn't go after the assets of the "old power", they would give the latter a big chance at a political return. On the other hand, tough, ruthless action could provoke something like the New Year's incidents and the country could be dragged down a disastrous path.

National reconciliation is becoming even harder now. Over the next two to three months, we can expect more political volatility and possibly some violence as it will not be possible for this deep political conflict and confrontation to be resolved amicably. The stakes are very high and getting higher and higher for both, those in charge now, and the old regime. Thailand will face greater political risks over the medium term. The Surayud government will be subject to greater public pressure. The transition to democracy will be met by protests from vested interest groups. Moreover, the Surayud government can't afford to let its economic policy be derailed like the errors of the wholesale capital controls to rein in baht speculation.

Paying the price will be the tourism sector, which is being hit by the bomb blasts in the capital. The bombings might also take a toll on investment at a time when confidence is still recovering after the September 19 coup. Overall, Thailand's gross domestic product will have to shave off its growth to take into account the slowdown of business activities amid the gloomy political climate.

See our last post on Thailand.