Circus may visit Bangkok, but it can't stay on

The generals who now control Thailand are making a big show of shifting their attention from guns to butter. Coup leaders are conferring with the central bank, the stock exchange and economic experts to safeguard growth.

They would have better luck if they could communicate their ultimate intentions to the rest of the world.

Military takeovers are rarely, if ever, good for an economy, never mind one like Thailand’s that was already heading for recession when the army grabbed power last week.

It’s true that Thais, who have endured 12 coups in the last eight decades, are more inured to them than most. But the way the generals are behaving this time seems almost certain to tip the economy into the red.

Instead of following usual procedure and soothing markets with talk about restoring democracy and basic freedoms, Thai Army Commander Prayuth Chan-ocha is cracking down on dissent. Coup leaders sent a worrying signal by detaining deposed Prime Minister Yingluck Shinawatra and almost 200 leaders of her party, family and supporters; by switching off television channels; and by muzzling the news media.

Even more frightening were orders for dozens of academics and writers to turn themselves in to the military, presumably for a bit of re-education.

The junta is dangerously mistaken if it thinks it can run a complex and unbalanced $366 billion economy and placate foreign investors while rounding up professors and banning TV stations in the age of the Internet, smartphones and high-frequency trading.

Investors who provide capital and multinational companies that create jobs in Thailand don’t want to see shows of strength — they want certainty. If they think Thailand will remain a stable and prosperous place, they will stay. Instead the junta is giving foreign businesses all too many incentives to look elsewhere.

Although Thailand is a bitterly divided nation, many of its 67 million people are beginning to agree on one thing: this coup was completely gratuitous. That goes for the “Red Shirts” fighting for the return of Yingluck’s brother, ousted Premier Thaksin Shinawatra, but also for the pro-royal “Yellow Shirts” who loathe her family’s hold on the nation.

No doubt, the Reds, made up of mostly rural Thais, are the angrier group. In 2006, their beloved Thaksin was also forced from office by the military and then convicted in 2008 of corruption.

Thaksin’s critics, the urban Yellows, accuse the billionaire-turned politician of using his office to enrich his business interests and of buying votes among the rural poor.

Yet even Thaksin’s foes are sure to become disgruntled about the open-endedness of this military adventure.

What if the Reds and Yellows joined forces against coup leaders?

Such a step wouldn’t just be ironic, but dangerous. Most pundits are busy assigning odds to a Thai civil war in the next few years. I can’t help but wonder if the real risk is an effort by millions of Thais to wrest power from the clutches of the generals. Would Prayuth and his men stand down?

It’s impossible to tell, and that’s just the problem for Thailand’s economic outlook. The circus is meant to visit town — not to stay there. The moment has come for the junta to present a timeline for when a credibly civilian government will be back in place.

William Pesek (wpesek@bloomberg.net) is a Bloomberg View contributor in Tokyo.