BANGKOK (Reuters) - When television broadcasters suddenly went off the air in Thailand recently, many people thought it could only mean one thing: the start of a military coup.
Authorities were quick to assure the public the three-hour blackout on April 21 was the result of a faulty satellite, not a putsch. But the coup speculation in a country that has seen 18 military takeovers since the 1930s illustrates the depth of uncertainty ahead of elections in late June or early July.
The odds favour the Democrat Party of Prime Minister Abhisit Vejjajiva in the coming poll. But he's unlikely to win by a comfortable margin. And regardless of who prevails, neither side may respect the result.
If Abhisit loses, his royalist and military backers are unlikely to give way quietly, possibly using judicial intervention or a coup to restore the status quo.
But if he wins, the red-shirted supporters of his political nemesis, self-exiled former premier Thaksin Shinawatra, could take to the streets in a new wave of anti-government protests.
Siripan Noksuan, a political scientist at Chulalongkorn University, said Thailand's five-year political crisis could intensify if Abhisit fails and the Thaksin-allied opposition Puea Thai Party wins.
"If Puea Thai manages to form a government, against all odds, there would likely be a coup," she said. "If there is another coup, it will be a big turning point for Thailand. The resistance will be strong and would likely bring bloodshed."
The poll is 46-year-old Abhisit's first popular test, giving him a chance to answer accusations he came to power illegitimately in 2008 when a court dissolved the ruling pro-Thaksin party and the military helped to piece together his coalition.
His party has not won an election in nearly two decades and the British-born, Oxford-educated premier has always struggled to connect with Thailand's working-class masses.
But several factors are in his favour: the opposition is in disarray, Thailand's economy -- Southeast Asia's second largest -- is performing strongly, and Abhisit has rolled out a raft of populist economic policies and subsidies targeting the poor, the vast majority of voters.
His campaign staff say his strategy is to convince voters Thailand should look ahead rather than dwell on its troubled past, especially the weeks of unrest last year in which 91 people were killed, Bangkok paralysed and the government was nearly felled.
His victory could give Thailand a rare dose of policy continuity after four changes of government since 2006. That's encouraging for investors eager for a continuation of the status quo following a 41 percent rise in Thai stock prices last year. Stocks and the baht currency are up again this year.
But Abhisit is unlikely to win decisively. That means Thailand can expect another coalition government and more back-room deals with shady figures in smaller parties, a recipe for corruption.
"That is really what is pulling this government back, this kind of coalition government that relies on appeasing demands of smaller parties and giving them control of the Commerce Ministry and various other important ministries," said Danny Richards, Southeast Asia specialist at the Economist Intelligence Unit.
"It really undermines the quality of policymaking. It is unlikely to change," he said.
Although the mostly working-class red shirts say they will honour the outcome, any perception of foul play or behind-the-scenes interference could trigger an ugly backlash.
The opposition is launching its campaign on Saturday with the slogan: "Thaksin Thinks, Puea Thai Acts", hoping to tap the popularity of the 61-year-old ethnic-Chinese telecommunications tycoon whose party was the first and only one in Thai history to win two landslide elections before he was toppled in a 2006 coup.
He was later convicted of breaching conflict-of-interest laws and sentenced in absentia to two years in prison.
But he is still idolised by many rural and urban working-class voters, a figurehead and assumed financier of the red shirt protesters who occupied swathes of Bangkok for nine weeks last year and battled troops in clashes that killed 91 people. From his villa in Dubai, he is effectively running the opposition, mostly through webcam teleconferences.
Still, his party is in disarray and has no clear candidate for prime minister. Most reckon his sister, Yingluck Shinawatra, would be in line for the job.
Internal power struggles that pit pro-Thaksin parliamentarians against red shirt protest leaders have driven at least 10 of the parliamentarians to defect this year, fueling speculation more could leave for other parties as the poll draws closer.
The party has also been on the defensive over accusations by the military that anti-monarchy comments were made from the stage of a red shirt protest that drew 40,000 supporters on April 10, a serious charge in a country with the world's toughest lese majeste laws and where 83-year-old King Bhumibol Adulyadej is widely revered.
"There is a bit of discomfort among some that the party's agenda is being driven by the street movement and not the other way round," said Pornthep Thepkarnjana, a former justice minister and close ally of Thaksin. "That is driving a wedge between different groups."
The resignation of political heavyweight and former premier General Chavalit Yongchaiyudh as opposition chairman on April 18 has also been a setback. His role was to build bridges to the military establishment and to show that the opposition was loyal to the powerful monarchy.
The broader question is whether the election can end a political crisis marked by two years of violent street protests, the takeover of Bangkok's two main airports in 2008 by royalist yellow-shirted protesters and questions over the future of the monarchy with King Bhumibol hospitalised for more than a year.
The unrest and frequent changes in government are taking a toll on Thailand's $320 billion economy, said Bank of Thailand Deputy Governor Atchana Waiquamdee.
"Policy that has been accepted and improved by one government, when the new government comes, it becomes uncertain," she told Reuters. "Government officials who have some duty to deliver government policy, if they perceive this is a short-lived government ... projects are postponed."
The Democrat Party's campaign manager said a big election win would allow them to roll out infrastructure projects, raise wages by 25 percent over two years and strengthen strategic agro-business and tourism industries.
"We need an investment strategy to make Thailand more competitive, to raise the standard of living, and we cannot do that without a big win," Korbsak Sabhavasu, also the party's deputy leader, told Reuters.
Korbsak expects the Democrats to continue to dominate in the south, gain ground in the lower-north and lose some seats in the central region. Analysts say the polarised electorate makes it hard for either side to win a majority, but Korbsak says there may be a "tipping point" where Abhisit gains enough to dominate.
The two unprecedented landslides won by Thaksin in 2001 and 2005 on a wave of populist policies allowed him to push ahead with long-term spending programmes and formulate infrastructure plans, earning him support from foreign investors.
But Thaksin's exit led to a purge of most of the top technocrats, with plans either delayed, revised or scrapped. The worry for investors is that a Puea Thai-led government could bring another unsettling change of the guard, pushing Democrat spending plans off the table.
Finance Minister Korn Chatikavani said the unstable political environment was holding back investment and stifling the economy, which most expect to grow by 4 percent this year.
"Our natural rate of growth should definitely be something at least around 7 percent for the next several years," he told a recent Reuters forum. "We have been held back from realising our potential for obvious reasons for the past three or four years."
Editing by Robert Birsel