Embattled Thai PM easily survives no-confidence vote

Yingluck Shinawatra, Thailand's prime minister at Parliament House in Bangkok on Nov. 28, 2013.
Dario Pignatelli | Bloomberg | Getty Images

Thailand's embattled Prime Minister Yingluck Shinawatra on Thursday breezed through a no-confidence vote in parliament where her party holds a commanding majority, but faced mounting pressure from widening anti-government protests.

The vote, however, is unlikely to defuse tensions or end the biggest anti-government protests since deadly political unrest three years ago. Protesters plan to march to the national police headquarters and defense ministry on Thursday.

"I will not dissolve the house," a defiant Yingluck told reporters before the vote.

(Read more: Political protests spook Thai central bank)

Upward pressure on dollar-baht to remain: Pro

"It is clear the protesters are not looking for house dissolution so, starting today, let us find a way out this together," Yingluck said.

Yingluck needed more than half, or 246 votes, out of the 492 votes in the lower house to prevail. She won 297, with 134 votes against her.

Her Puea Thai Party and coalition partners dominate the lower house with 299 seats and comfortably survived the three-day debate during which the opposition grilled Yingluck on a 3.5 billion baht ($108 million) water management scheme and financially troubled government rice intervention scheme.

Protest leader Suthep Thaugsuban has ruled out talks with the government or other parties. "No more negotiations," Suthep told cheering crowds late on Wednesday after thousands massed outside four Thai government ministries, a major state office complex and 31 provincial halls.

Economy at risk

The protests threaten to destabilise Thailand at a delicate time, just as its $366 billion economy, Southeast Asia's second biggest, is losing momentum. Data released on Wednesday showed exports fell 0.7 percent in October from a year before, worse than the 0.7 percent rise most economists had expected.'

(Read more: Spotlight on Thailand as political strife escalates)

Waving multi-coloured flags, tooting on whistles and backing up traffic, the protesters appear intent on shutting Thailand's government. They have occupied the Finance Ministry since Monday but have failed to force their way into other ministries. Instead, they gather at the gates, causing staff to evacuate.

Responding to the crisis, Thailand's central bank unexpectedly cut interest rates by a quarter point at its policy-setting meeting on Wednesday.

I'm 'worried' protests could effect economy: Thai Deputy PM

The demonstrators, a motley collection aligned with Bangkok's royalist civilian and military elite, accuse Yingluck of being an illegitimate proxy for her billionaire brother, former Prime Minister Thaksin Shinawatra, a populist hero of the rural poor who was ousted in a 2006 military coup.

Most of the 31 provinces where demonstrators had massed are in the south, a traditional stronghold of the opposition Democrat Party, although four were in the north and northeast, where the Shinawatra family is hugely popular.

The aim of the rallies was to wipe out the "political machine of Thaksin", said Suthep, a former deputy prime minister under the military-backed government that was routed by Yingluck in a 2011 election.

(Read more: Thai capital hit by biggest protests since deadly 2010 unrest)

Amnesty bill sparked protests

The protests are all-too familiar in Thailand, which has seen eight years of on-off turmoil, from crippling street rallies to controversial judicial rulings and army intervention, each time with Thaksin at the centre of the tumult.

Despite fleeing into exile to dodge a jail sentence for abuse of power in 2008, billionaire former telecommunications mogul Thaksin has loomed large over Thai politics.

He won the support of the rural poor who voted him twice into office, in 2001 and 2005, before he was ousted in a 2006 coup. His supporters remain fiercely loyal to him and swept Yingluck to power in an election landslide in 2011.

Thaksin's opponents are fewer in number than his supporters but hold considerable power and influence, among them wealthy conservatives, top generals, bureaucrats, royalists and many members of the urban middle class.

(Read more: Thailand's investors spooked by 'forgiveness')

Many of them see Thaksin as a corrupt, crony capitalist who manipulates the masses with populist handouts and is a threat to the monarchy, which he denies.

The anti-government campaign started last month after Yingluck's ruling Puea Thai Party tried to pass an amnesty bill that critics said was designed to absolve Thaksin of his 2008 graft conviction.

The protests, though peaceful, have raised fears of unrest. Anti-government protest leaders, from all sides, have a tradition in Thailand of trying to provoke a violent crackdown by the government to rob it of legitimacy.

Fearing clashes could erupt and further weaken her government, Yingluck said police would keep the peace.