By Daniel Ten Kate and Rattaphol Onsanit
Oct. 7 (Bloomberg) -- Thai Deputy Prime Minister Chavalit Yongchaiyudhresigned after more than a hundred of anti- government protesters were injured as police cleared a blockade of Parliament, undermining efforts to end a five-month standoff.
Police fired tear gas shortly after dawn and again in the afternoon at thousands of demonstrators who attempted to prevent lawmakers from accessing the building. Chavalit, a former army chief, was brought into the Cabinet Sept. 24 to persuade protesters to end their occupation of the prime minister's office.
The clashes may increase pressure on Prime Minister Somchai Wongsawat, whose Parliamentary today address was boycotted by almost half the country's lawmakers in protest against violence. Demonstrators and opposition leaders accuse the government of being a proxy for former leader Thaksin Shinawatra, who fled to the U.K. in August to escape corruption charges.
``The government's legitimacy is reduced as people were injured,'' Panitan Wattanayagorn, a political analyst at Bangkok's Chulalongkorn University, said in an interview. ``If the situation gets out of control, a coup is possible.''
The ruling People Power Party won December elections, a year after the military ousted Thaksin. The party inherited his platform of cheap health care and microcredit that appealed to the country's poor northeast region, where a third of Thailand's 66 million people live. Wealthier Bangkok residents accuse the government of buying rural votes and have called for a new electoral system where half of the parliament is appointed.
Somchai, Thaksin's brother-in-law, took office Sept. 18 saying said his government would reconcile with protesters and restore confidence among investors and tourists.
The benchmark SET index slid to its lowest in more than five years and the baht dropped to a three-week low. The cost of protecting external debt from default surged over deepening concern the political crisis will spur an exit by investors.
``The news about the clash has accelerated the baht's weakness, which has already been depressed by outflows of foreign investment from the stock market,'' said Usara Wilaipich, an economist at Standard Chartered Bank in Bangkok. ``The escalating political conflict will certainly spur additional selling of stocks by overseas investors.''
The number of injured protesters rose to 108 as of 2 p.m. Bangkok time, according to the Public Health Ministry. Most suffered from tear gas irritation, while four were seriously injured, including one person who lost a leg, the ministry said earlier.
Police Officer Stabbed
A police officer was stabbed with a flag pole from his stomach through his liver and diaphragm, according to Teerapol Pogpong, a spokesman at Bangkok's Pramongkut Hospital said in an interview with state-run Thai PBS television.
The demonstrators blocked access to roads around Parliament, setting up barriers of tires stacked chest high next to barbed- wire fences. Many of them wore helmets and goggles, and they carried wooden planks and metal bars as weapons. Somchai, 61, was forced to climb over a fence to avoid protesters when he left Parliament, media reported.
Army chief Anupong Paojinda met with senior generals today to assess the situation, the Bangkok Post reported. He expressed confidence that the police could maintain control, the newspaper said.
The People's Alliance for Democracy has vowed to demonstrate until the government steps down, saying it won't accept anyone who has ties to Thaksin.
``We came here to upgrade the rally and make a big noise,'' said Kusol Pravichpibul, 51, a protester who volunteered at a medical site near the Parliament building. ``It worked 100 percent.''