Thai prime minister suspended from office

Ben McGrath

Thailand’s Prime Minister Paetongtarn Shinawatra leaves Government House in Bangkok, Thailand, Tuesday, July 1, 2025 [AP Photo/Sakchai Lalit]

Thailand’s Constitutional Court suspended Prime Minister Paetongtarn Shinawatra of the Pheu Thai Party (PT) from office on Tuesday pending a final ruling on a petition claiming she is unfit for office. The nine-member court ruled unanimously to review the petition while voting seven to two in favor of suspending her from office.

A final ruling on Paetongtarn’s case could take one to three months. If the accusations against her are accepted, she would be the second Pheu Thai prime minister deposed by the court in the last two years. Srettha Thavisin was removed on trumped-up ethics charges last August.

The claims against Paetongtarn stem from a phone call with Cambodia’s former long-time prime minister Hun Sen, leaked on June 18. The two discussed a border dispute that led to a military clash between Thailand and Cambodia on May 28 that led to the death of a Cambodian soldier. Paetongtarn’s opponents claimed she had made Thailand look weak and moved against her to carry out what is in essence a judicial coup.

Thirty-six senators led by Thai senate president Mongkol Surasajja submitted the petition to the Constitutional Court, a body appointed by the military after it seized power in 2014. Mongkol is part of the leading section of the National Assembly’s upper house known as the “blue faction,” which has close ties with the right-wing Bhumjaithai Party (BJT). The BJT left the ruling coalition, taking 69 seats and leaving the Pheu Thai-led government, with a slim majority in the 500-seat lower house of the National Assembly.

The political stage for the court ruling was set by a large right-wing patriotic protest in Bangkok by the so-called Yellow Shirts—supporters of the country’s traditional elites, the monarchy, the army and state bureaucracy, including the courts. The protesters demanded Paetongtarn’s resignation and for all coalition partners to abandon the government.

Yellow Shirt leader, and media mogul Sondhi Limthongkul openly suggested that the armed forces seize power, telling those assembled that while he did not want to see another coup, he “won’t object if the military does something.” Limthongkul and the Yellow Shirts were instrumental in whipping up protests that preceded the 2006 military coup against Thaksin Shinawatra, Paetongtarn’s father and Pheu Thai leader.

The political crisis unfolding in Thailand is not the result of a phone call. Rather the bitter factional infighting reflects sharp tensions within the ruling class, amid declining economic growth and worsening geo-political conflict. Thailand faces the prospect that Trump will next week impose his threatened 36 percent tariff on Thai exports to the US.

Pheu Thai came to power through an unstable coalition of right-wing parties following the May 2023 general election, only the second since the 2014 coup that ousted the Pheu Thai government of Thaksin’s sister, Yingluck Shinawatra. While the military outright rigged the 2019 election, it took a more cautious approach two years ago, not wanting to spark a renewal of the mass student-led protests that began in 2020.

Through its control of the senate and in alliance with parties like the BJT, the military blocked the election winner, the so-called “progressive” Move Forward Party (MFP). While this party offered very limited reforms, even this was too much for the military. The Constitutional Court barred the MFP leader from standing for prime minister.

Pheu Thai formed an inherently unstable coalition government with military-aligned parties—the United Thai Nation Party and the junta’s Palang Pracharath Party (PPRP)—as well as the right-wing BJT. The PPRP was replaced in the coalition by another right-wing party, the Democrat Party, last August.

As part of this deal, Thaksin Shinawatra, was also allowed to return to Thailand in 2023 after years of self-imposed exile. The ruling class intended to keep Thaksin on a short leash while hoping he would use his influence to mollify anger among Thailand’s rural poor.

With the prospect of being jailed on bogus corruption charges, Thaksin fled the country after the 2006 coup. This sentence was reduced to one year, of which Thaksin served six months while staying in a hospital after his return.

Thaksin currently faces additional criminal charges and investigations, including charges of lèse-majesté stemming from comments he made in a 2015 interview with the South Korean newspaper, Chosun Ilbo. He appeared in court for a hearing on the charges the same day Paetongtarn was suspended from office. Conviction of lèse-majesté carries penalties of up to 15 years in jail.

Pheu Thai has not opposed any of these anti-democratic measures. It is far more fearful of triggering mass opposition, particularly in the working class, than it is of the military and its political allies.

Similarly the MFP refused to defend itself when the Constitutional Court dissolved the party last August. The party’s founder, wealthy businessman Thanathorn Juangroongruangkit, who had appealed to young people in particular on the basis of defending democratic rights, simply told party members and supporters to “just shrug and move forward.” The party was reestablished as the People’s Party (PP), which is currently the main parliamentary opposition party.

Far from opposing suspension of Paetongtarn, the PP openly supports it on the basis of the same reactionary patriotic basis as the Yellow Shirts. Party leader Natthaphong Ruengpanyawut declared on June 19 that Paetongtarn’s phone call with Hun Sen “has completely destroyed public trust in the government.”

While calling for new elections, the PP is openly colluding with the right-wing Bhumjaithai Party, having entered into negotiations to support its head Anutin Charnvirakul for prime minister if the latter backs constitutional reforms. The BJT, the very party now at the forefront of the latest judicial coup in alliance with the military, also played a crucial role in blocking the MFP from forming a government in 2023.

A sharp warning on the state of the global economy

Nick Beams

Bank for International Settlements in Basel, Switzerland [Photo by Wladyslaw Sojka (Free Art License 1.3)]

In its annual report, the Bank for International Settlements (BIS), the umbrella organisation for central banks, has painted a picture of a world economy and financial system, increasingly fractured, full of contradiction, conflicts and vulnerabilities, amid a long-term global slowdown.

The report contrasted markedly with the relatively upbeat report presented year ago.

According to this year’s assessment: “The prospects for the global economy have become much more uncertain and unpredictable in recent months, marking a notable departure from the relative optimism of the previous year when a soft landing was in sight. Trade disruptions now threaten to reshape the global landscape, as long-standing political and economic relations are being questioned,” according to the opening sentences of chapter one of the report issued on Sunday.

The immediate focus is on US trade policy and the disruption of the Trump tariffs, with their “unknown eventual scope and impact.” These have “elevated measures of economic uncertainty to levels typically associated with crises and sparked high volatility in financial markets.”

Even before the Trump economic war, however, the world was “already grappling with significant vulnerabilities.”

These are rooted in the very foundations of the global economy which the report noted in the introduction “is facing long-standing and emerging challenges. Productivity growth has been trending down in many advanced economies for decades and more recently in several emerging market economies, acting as a drag on overall economic growth.”

Economies have become more vulnerable to inflation because of ageing populations and emerging labour shortages with trade fragmentation which “could further reduce supply flexibility.”

On top of this, “high public debt in several jurisdictions makes the financial system vulnerable to interest rate rises, while reducing governments’ ability to respond to adverse developments.”

The use of the world “several” represents a significant underestimation of the situation as the growing debt crisis is concentrated in the major economies. 

The US has a debt of $36 trillion, rising at what is universally characterised as an “unsustainable” rate. In the UK, which experienced a major crisis in 2022, there have been warnings of a bond market sell-off because of the high levels of debt. European countries, particularly France and Italy, are weighed down in debt, while the Japanese prime minister has likened the government’s financial position to that of Greece in the 2010s. 

The report said that while higher public debt levels are “sustainable in the presence of strong income growth and low interest rates, current and future conditions look less than favourable.” 

Again, that is something of an understatement for as the report itself continued, “economic growth is expected to remain subdued for the foreseeable future” and interest rates “may not return to the low levels observed in the pre-pandemic decade.” 

These mounting problems are compounded by major changes in financial markets flowing from the rise of private credit—so-called non-bank financial institutions (NBFIs). Their increased use in the financing of public debt “has heightened liquidity risks in bond markets, raising the potential for financial stability risks to emerge outside the traditional banking systems.”

Elaborating on these risks, the report noted that “a growing share of long-term credit to small or medium-sized and highly indebted companies is provided by private credit funds,” which are in turn funded by pension funds and insurance companies. The connections in this form of funding are “notoriously opaque.” 

The overall result is that “financial conditions as well as financial stability risks are increasingly influenced by players outside the traditional banking system.” But the banks are ultimately involved because of the support they provide to the private markets.

The financial crisis of 2008, the report said, was primarily a banking crisis with mortgage markets at its core. But today the landscape has “government bond markets at its centre and asset managers of various stripes as the key intermediaries.”

This is particularly the case in the repo, or repurchase, market where hedge funds use government bonds as collateral in very short-term borrowing from banks to finance highly leveraged trades.

“By using government securities as collateral in the repo markets to borrow cash for additional securities, these strategies boost returns but are also vulnerable to adverse shocks in funding, cash or derivative markets. This vulnerability has increased further as financing terms have become increasingly lax.”

Creditors, the report found, have “stopped imposing any meaningful restraint on hedge fund leverage.”

This leaves the broader market more vulnerable to disruptions because “even slight increases in haircuts [losses] can trigger forced selling and amplify financial instability”. That was evident both in the market turmoil in March 2020, at the start of the pandemic and in turbulence of April this year.

In response to the unexpected size of Trump’s “reciprocal tariffs” on “liberation day,” April 2, interest rates on government bonds spiked. But contrary to what normally takes place, the US dollar fell in international currency markets and for some days the market mantra was “sell America.”

The report pointed to the complex effects of tariff hikes in the conditions which now prevail.

“The global economy is not a collection of islands; it consists of a dense web of interconnections among suppliers, customers, consumers and the financial intermediaries that knit them together. Activity straddles the border, so that traded goods undergo many rounds of value added before finding their eventual customers.”

And the disruption of supply chains would again lead to “upside surprises in inflation.” 

The issue of inflation raises before the BIS and all central banks—the guardians of the interests of finance capital—one of the issues of greatest concern, namely the response of the working class.

The report itself used carefully guarded language saying that “households … may show less tolerance for real wage declines following the sharp rise in living costs after the pandemic.”

In his remarks on the report, BIS managing director Agustin Carstens was a little more direct.

“If evidence of de-anchoring [a code word for a rise in workers’ wages struggles because of the expectation of further price hikes] emerges, central banks must respond forcefully to inflationary shocks.” 

That means interest rates must be lifted even if that pushes the economy into recession. In fact, the BIS report looked on such a development positively in regards to inflation, saying a global slowdown could be a mitigating factor in its development.

The BIS also bared its class teeth when it came to deal with the general slowdown and the growing fiscal crisis, reflected in the escalation of government debt.

It insisted that so-called “structural reforms” were the key to addressing the persistent challenges of low economic and productivity growth experienced by many economies in recent decades” and that such reforms were the only means to overcome this.

“Neither expansionary monetary policy nor expansionary fiscal policy can act as a lasting driver of long-term growth.”

In the capitalist economy, where “productivity” is ultimately based on the rate at which surplus value, the basis of profit, can be extracted from the working class, “structural reform” comes down to the reduction of the labour share of national income and the worsening of working conditions.

The same class dynamic was seen in BIS’s prescriptions for the reduction of government debt which it identified as the source of financial instability.

It said countries facing “large fiscal deficits and limited fiscal space must pursue fiscal consolidation.” But it ruled out achieving that by increased taxation on corporations and the wealthy saying that “relying heavily on tax-based consolidation could hinder growth further.”

Under conditions where all governments are increasing spending on the military to their highest levels in the post-war period, “fiscal consolidation” means deepening attacks on social services such as health, education and pensions, which in turn impacts on the working class, well beyond the levels already carried out.

The BIS report is a warning both as to the depth and growing intensity of the crisis of the global capitalist economy and the response of the ruling class and its state agencies to it.

Thai government on brink of collapse

Robert Campion

Thailand’s coalition government of Prime Minister Paetongtarn Shinawatra is on the verge of collapse following a leaked phone call between Paetongtarn and former Cambodian leader Hun Sen. The call took place on June 15 and was made public three days later. It dealt with the growing tensions between the two countries over a border dispute that sharply escalated last month.

Thailand‘s Prime Minister Paetongtarn Shinawatra, centre, arrives at Government House for cabinet meeting in Bangkok, February 4, 2025. [AP Photo/Sakchai Lalit]

The call was recorded and leaked by Hun Sen, who was prime minister of Cambodia from 1985 to 2023. Though he has passed on the premiership to his son, Hun Sen remains president of Cambodia’s senate and continues to carry considerable influence.

Since the May 28 border clash that led to the death of a Cambodian soldier, tensions have grown as both sides militarily reinforced the border and restricted crossings and trade, raising the potential for further escalation.

The two countries have a long-running border dispute dating back to 1907 and the French mapping of the region when France controlled Cambodia as a colony. While Thailand was never colonized, it had been forced to surrender significant territory to France. To date, approximately 195 kilometers of the 798-kilometer Thai-Cambodian border has still not been demarcated. Armed clashes also took place in 2011.

In the call, Paetongtarn addressed Hun Sen deferentially as “uncle,” which her political opponents seized upon to claim she made Thailand look weak. Right-wing and military circles also accused Paetongtarn of undermining Lieutenant General Boonsin Padklang, the commander of Thailand’s Second Army Area responsible for the border with Cambodia. The general has been whipping up nationalist sentiment since the border clash occurred.

Paetongtarn told Hun Sen that Boonsin was “playing tough.” She dismissed his hardline stance as simply “wanting to look cool and saying things that are not useful to the nation, but in truth what we want is peace.”

After the phone call was made public, the conservative Bhumjaithai Party, with its 69 seats, withdrew from the ruling coalition, which is led by Paetongtarn’s Pheu Thai Party. The coalition now holds a slim majority of 260 seats in the 500-seat lower house of the National Assembly. Some leading members of the United Thai Nation Party, now the second-largest partner with 36 seats, are demanding Paetongtarn’s resignation as a condition for remaining in the coalition, which she has so far refused to do.

If the ruling coalition loses its parliamentary majority, Paetongtarn could remain in power. However, her government’s ability to pass legislation would be sharply curtailed, practically necessitating her resignation.

The main opposition People’s Party has called for the dissolution of parliament and a new general election, saying it is necessary to prevent a coup. Army head General Pana Klaewplodthuk claimed that the military was committed to “democracy” and that the armed forces would continue to operate within “existing mechanisms.”

This is no guarantee a coup will not occur, especially in a country that has experienced two in the present century alone. Anti-government protests have taken place, with more planned. The military could use these demonstrations or the overall instability in the government to carry out a coup under the pretext of restoring order.

The factional warfare among the Thai ruling class now erupting to the surface is not the result of a diplomatically embarrassing phone call. It has been ongoing behind the scenes for months and has already claimed one Pheu Thai prime minister. Srettha Thavisin was removed from office on trumped up ethics charges last August. It is an expression of the profound contradictions gripping not only Thailand but the entire region, under the impact of the crisis of global capitalism and escalating US-instigated wars in Ukraine and the Middle East.

Washington is escalating its preparations across the Indo-Pacific region for war against China and is applying pressure on countries like Thailand to line up with its military plans, including through Trump’s “reciprocal” tariffs. Thailand faces a potential rate of 36 percent when the tariffs are set to take effect on July 9 if a trade deal is not worked out.

These negotiations are critical for Thailand’s economic stability. In 2024, Thailand exported $63.3 billion worth of goods to the US. But Washington’s attempt to coerce Thailand is driving the tensions in Bangkok. China is Thailand’s largest trading partner and one of its largest foreign investors. There are factions within the Thai ruling class, including inside the military, that favor friendly relations with Beijing.

Between 2016 and 2022 under the military junta that seized power in the 2014 coup, Thailand purchased $394 million worth of weaponry from China, compared to $207 million from the US.

The Trump administration is exploiting trade talks with Thailand and other countries such as Vietnam and Indonesia to bully them to line up against China. Washington is demanding Bangkok purchase US military equipment such as 130 Stryker armored vehicles and other weaponry.

Thailand is also the oldest US military ally in Asia. It played a major role in the Vietnam war, providing approximately 40,000 troops and major air bases from which US aircraft launched bombing missions over North Vietnam, Laos, and Cambodia. Washington no doubt hopes Thailand would play a similar role in a war against China. Today, Thailand alongside the US also hosts Cobra Gold, the largest annual multinational military exercises in the Indo-Pacific region.

Additionally, the Thai ruling class is deeply concerned that the crisis of capitalism will ignite an eruption of working-class struggle that Paetongtarn and Pheu Thai will be unable to contain. Thailand’s GDP grew only 2.5 percent in 2024, roughly half the average growth of other countries in the region. Without a tariff deal, financial analysts are predicting this could drop to only 1 percent this year.

According to Thailand’s Kasikorn Research Center (KResearch), more factories will close in 2025 than in the last two years, during which there was an average net loss of 53 factories per month. These closures have been particularly prevalent in sectors like electronics, automotive, and food processing, which are heavily reliant on exports to the US.

Thailand’s automotive industry, the 10th largest in the world, saw car sales contract by one percent in the first half of this year, with the expectation that they will decline another 1.7 percent in the second half of the year according to KResearch. Overall, domestic car production is expected to fall by 6 percent for 2025.

Consumer confidence fell to 54.2 on the Consumer Confidence Index in May according to the University of the Thai Chamber of Commerce, the lowest level since March 2023. A score lower than 100 indicates general pessimism with the state of the economy while a score greater than 100 indicates optimism.

Thai credit growth is also turning negative for the first time since the 2008 global financial crisis, with a forecast by KResearch of –0.6 per cent for 2025. Non-performing loans (those which default on their payments), are set to rise from 2.7 percent to 3 percent.

The Thai ruling class is turning to nationalism and militarism in order to project these mounting internal tensions outwards against an external enemy. Whether Paetongtarn’s government falls remains to be seen, but no section of the ruling class has a progressive solution to the worsening crises facing the working class.

Britain’s National Security Strategy prepares militarisation of society

Thomas Scripps

Britain’s National Security Strategy (NSS) 2025 is Labour’s blueprint for militarising society in preparation for major wars. It calls for a “hardening and a sharpening of our approach to national security across all areas of policy, already seen in a shift towards more investment in hard power and an emphasis on increasing the lethality of our armed forces.”

The document’s release comes just days after Prime Minister Keir Starmer announced a commitment to lifting military spending to 5 percent of GDP by 2035, adopted as a common goal at yesterday’s NATO summit, which the NSS hails as “the largest sustained investment in our armed forces since the Cold War, with an emphasis on greater lethality” and “warfighting readiness”.

Prime Minister Keir Starmer watches Dutch-UK Marine training, June 24, 2025. [Photo by Simon Dawson / No 10 Downing Street / CC BY-NC-ND 4.0]

Russia and Iran are listed as the UK’s primary targets, with more guarded but still adversarial references to China. Everything is framed in terms of “defence”. The imperialist gang-up on Iran in the last weeks explodes this fiction. As for Russia, Donald Trump’s US Presidency has further exposed the predatory interests which animated NATO’s proxy war in Ukraine from the start.

The offensive nature of the wars envisaged by the Labour government was underscored this week by Starmer’s announcement of a new squadron of 12 American-made F-35A jets, capable of delivering US tactical warheads to be stored on British soil for the first time in nearly 20 years. The B61-12 gravity bomb has an explosive power three times that of the weapon dropped on Hiroshima.

British imperialism’s ability to exert its “hard power” abroad depends on mobilising a pro-war constituency and a technical-industrial base which are sorely lacking. The National Security Strategy announces Labour’s plans to change this situation.

According to its authors, “the essence of our approach will be: to harness the nation’s productive, industrial, technological and scientific strengths more closely to our national security objectives to an extent not seen since wartime; and to do more to answer the concerns of everyday British working people through a more systematic approach to pursuing national interests.”

The government “will seek to partner with all parts of society, business, academia, and devolved and local governments in a new national resilience effort on the journey to 5%. This process starts with building greater public awareness of the threats we face… and builds towards a new social contract between government and the British people”.

“This is the task ahead of us,” the document summarises, “to mobilise the nation in the common cause of our national security.”

There is something desperate and self-deluding about this. Deeply unpopular and ruling a country seething with social discontent, Labour would love to believe in the dream of social peace at home through war abroad.

But what is being outlined is a brutal restructuring of the economy and state spending to meet the demands of the military by clawing money out of the backs of the working class. Far from unifying the nation, it will bring class tensions to breaking point.

The NSS alludes to this, demanding “realism and frankness about the world in which we operate. The months and years ahead will see difficult compromises and trade-offs on resource allocation and prioritisation”. Which is why Labour’s agenda will be coupled with an attempt to whip up nationalist hysteria directing social tensions outwards at a foreign enemy.

The NSS warns, “For the first time in many years, we have to actively prepare for the possibility of the UK homeland coming under direct threat, potentially in a wartime scenario.” It outlines a “new Resilience Strategy” which will “launch public communications to inform citizens about preparedness for risks” and “run annual National Exercises in order to test our whole-of-society preparedness.”

The government has also launched plans to boost military recruitment, including a thousands-strong Home Defence organisation (“potentially modelled on the Reserves,” the NSS explains) and increasing the size of the cadets by 40,000 to 180,000 school-age young people.

The Guardian explains how the cadets initiative will “see ‘public outreach events’ across the UK ‘explaining’ current and future threats and the rationale for more defence spending. Part of this will involve the armed forces becoming ‘more visible’ in society and the sight of people in uniform less rare in daily life.”

The Ministry of Defence will also work with the Department for Education “to develop understanding of the armed forces among young people in schools”.

These initiatives are aimed at creating a siege atmosphere, justifying crackdowns on popular protest and political opposition. References in the document to the threat of “extremist ideologies” and “viewpoints” should set alarm bells ringing in the aftermath of the decision to ban protest group Palestine Action under anti-terror laws.

The normalisation of the military personnel in domestic settings should be understood in light of Trump’s deployment of US marines against protesters in Los Angeles and threats to deploy the army more broadly against migrants. Starmer’s Security Strategy likewise repeatedly references the “scourge of illegal migration” as a security concern.

“[W]e should be optimistic,” the document concludes, more in hope than expectation. The fact is that millions of people are already fiercely opposed to Labour’s authoritarian and warmongering policies and attempts to push them further will provoke mass opposition. The government’s propaganda cuts both ways.

While the prospect of war on British soil—always presented as the result of some unprovoked attack—is put forward to demonise British imperialism’s opponents, it draws back the veil the ruling class has placed historically over the consequences of its military aggression. By recklessly escalating conflicts with major powers like Russia, and ultimately China, they are threatening to bring the wars currently fought out by proxies back home.