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...year began, Bangkok was swirling with speculation about the masterminds behind the bombings. Initial suspicion centered on Muslim insurgents, who have terrorized Thailand's south with unrelenting attacks that have claimed nearly 2,000 lives over the past three years. But the insurgents, some of whom are fighting for a separate Muslim state, have never taken their bloody campaign out of the south. "It's unlikely this was the work of southern insurgents," says Francesca Lawe-Davies, Southeast Asia Analyst for the International Crisis Group. "It's always been more about their territory; if they were to stage an attack...

Author: /time Magazine | Title: The Trouble with Thailand | 1/4/2007 | See Source »

...However, managing public anger can be a perilous task. So far, Thailand's ruling junta has enjoyed remarkable domestic support, particularly among the urban ?lite who normally might have been counted upon to support a democratic transition over a military coup. Nevertheless, cracks are appearing in the generals' popularity. Though coup leader Sonthi Boonyaratglin is a member of Thailand's Muslim minority, insurgent attacks in the south have increased since his administration took office. Sonthi has also been criticized for meddling in the drafting of Thailand's new constitution. And even though the junta put technocrats in charge...

Author: /time Magazine | Title: The Trouble with Thailand | 1/4/2007 | See Source »

...Further spooking investors are the Ministry of Commerce's proposed amendments to the Foreign Business Act, which could force thousands of international companies to change their shareholding structure if they wish to continue operating in Thailand. Currently, many foreign firms invest in Thailand by putting the majority of shares in the name of a local nominee who has little real authority. But the amendment, which could be announced as early as this month, may require local partners to have voting power commensurate to their shares. Already, according to Yoichi Kato, head of the Bangkok office of the Japan External Trade...

Author: /time Magazine | Title: The Trouble with Thailand | 1/4/2007 | See Source »

...part, the interim government's financial team maintains that Thailand's economy needs such safeguards against destabilizing foreign forces. With unprecedented capital inflows pouring into Thailand, the baht hit a nine-year high in December, making the country's exports more expensive abroad. Meanwhile, other export-reliant nations like China have kept their currencies' appreciation to a minimum, prompting the Bank of Thailand to unveil its ill-fated capital controls. "I've told the International Monetary Fund that they really need to consider restructuring the world financial system because of these imbalances that are hurting small, open economies," says Bank...

Author: /time Magazine | Title: The Trouble with Thailand | 1/4/2007 | See Source »

...most immediate task for Thailand's new rulers is to bring the New Year's Eve bombers to justice. "Whether or not they can catch those who are responsible will be very important to the credibility of this government," says Professor Panitan. "As long as they can't arrest these people, the international community will not have confidence in Thailand." After such a tumultuous 2006, Thais can only hope that the new year restores some measure of stability-and safety...

Author: /time Magazine | Title: The Trouble with Thailand | 1/4/2007 | See Source »

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