Thai PM hands out cheques as thousands protest

BANGKOK (Reuters) - More than 20,000 protesters surrounded the offices of Thai Prime Minister Abhisit Vejjajiva on Thursday, distracting his government as it began giving cash handouts to the poor in a bid to stave off recession.

In the latest episode in Thailand's long-running political crisis, protesters derided Abhisit's handling of the economy and vowed to stay at Government House until he resigned.

"We want to get rid of Abhisit. We will stay until we achieve our goals," said Jatuporn Prompan, a leader of the United Front for Democracy against Dictatorship (UDD), which backs former Prime Minister Thaksin Shinawatra, ousted in a 2006 coup.

Thousands of police and unarmed anti-riot soldiers ringed the Government House compound as the red-shirted crowd waved "Abhisit, Get Out" banners and speakers hurled abuse at his three-month-old government.

The demonstrators had earlier pushed through police lines to get closer to the compound, but did not try to enter. The crowd was calm as night fell.

Government House was occupied for months during occasionally violent protests last year by yellow-shirted, anti-Thaksin demonstrators that helped undermine a series of governments loyal to the former premier, who now lives in exile.

Analysts say these latest street protests do not pose a serious threat to Abhisit, who easily won a no-confidence vote in parliament last weekend. But the unrest is a distraction for policymakers when they should be concentrating on the economy.

Abhisit launched the government's latest effort to prop up the domestic economy on Thursday by handing out 2,000 baht (38 pounds) cheques to low-income workers to supplement their income.

"We don't want people to panic because it will add to our economic woes. If you want to help the economy, eat and use Thai products and travel in the country," Abhisit told a group of workers at City Hall not far from the anti-government rally.

The cash scheme is worth about 19 billion baht and will help over 9 million low-income Thais, officials said.

Economists said it would help, in the short term at least.

"Pumping money into short-term projects to support spending in the first and second quarters is a good thing. I think it will ease the pain and will have some quick impact," economist Carl Rajoo at Forecast in Singapore said.

BETTER THAN NOTHING

Finance Minister Korn Chitikavanij said the cash handouts would help boost gross domestic product by 0.2 percentage points and create about 80,000 jobs in an economy his ministry warned on Wednesday could shrink by as much as 3 percent this year.

Thousands of jobs in key manufacturing and export sectors are being shed as demand for Thai electronics, auto parts and other goods dries up due to the global economic slowdown.

Like other countries, Thailand has launched a package of stimulus measures, including tax breaks, cash handouts, and cheap utilities and transport, to prop up the economy.

To support its spending, Bangkok is seeking $2 billion (1.4 billion pounds) in foreign loans and drawing up plans to spend $44 billion, mostly on infrastructure projects, over the next three years.

The government has also introduced an intensive job retraining programme, but it will help only 240,000 of the more than 1 million people expected to lose their jobs this year.

Thailand's jobless rate is expected to jump to 3.8 percent in 2009, representing about 1.4 million people out of work, from 1.4 percent at the end of last year, the Finance Ministry said.

Pimonwan Mahujchariyawong, an economist at Kasikorn Research Centre, said the short-term stimulus measures would do little to help the unemployed find good jobs.

But for Thayee Moklek, a cheque is better than nothing.

"I've lost my factory job since my pregnancy a year ago. Now, no one wants to hire me," said the 23-year-old, who earns 70 baht a day doing odd jobs.

"I want the government to help us more," she told Reuters, cradling her baby in her arms.

(Additional reporting by Pracha Hariraksapitak, Boontiwa Wichakul, Orathai Sriring and Kittipong Soonprasert; Writing by Darren Schuettler; Editing by Alan Raybould and Dean Yates)