Thai cabinet meets king; doubt grows over power handover schedule

Thailand's Prime Minister Prayuth Chan-ocha (R) and Deputy Prime Minister and Defence Minister Prawit Wongsuwan (L) leave Government House as they lead a new cabinet to an audience with King Bhumibol Adulyadej at Siriraj Hospital in Bangkok September 4, 2014. REUTERS/Athit Perawongmetha

By Amy Sawitta Lefevre BANGKOK (Reuters) - Thailand's new military-stacked cabinet met King Bhumibol Adulyadej in Bangkok on Thursday, marking the formal start of an administration that will spend at least a year overhauling the political system before calling an election. The leader of a May 22 coup, army chief General Prayuth Chan-ocha, who is now prime minister, has said he wants a year of reforms to culminate in a late 2015 election. But observers say there are signs a power transfer could be delayed. "Prayuth has given himself several tasks to attend to while he is appointed prime minister," said Paul Chambers, director of research at the Institute of South East Asian Affairs affiliated with Chiang Mai University. "These could likely legitimize a reason for him to extend his term as prime minister and thus consolidate the power of his military faction and himself." Dressed in a crisp, white military uniform, Prayuth, 60, led his cabinet to Bangkok's Siriraj hospital, where King Bhumibol, 86, has been staying while he undergoes a health check-up, the palace says. The army seized power after months of protests in Bangkok by supporters of the royalist establishment against Prime Minister Yingluck Shinawatra. Analysts say the coup leaders want to end influence of Yingluck's brother, former telecoms tycoon and populist premier Thaksin Shinawatra, who was ousted in a 2006 coup. He lives abroad to avoid a jail term for graft but retains huge support, to the anger of the establishment which sees him as a threat. The military-backed government installed after the 2006 coup re-wrote the constitution to try to curb Thaksin's sway. But that failed to derail his political juggernaut and Yingluck swept a 2011 election. "Rightly or wrongly, there is a feeling among the generals that the armed forces is the only institution in Thailand that is capable of revamping the political landscape and rooting out Thaksin's influence," Ambika Ahuja, a Southeast Asia specialist at Eurasia Group, a New York-based political risk consultancy, told Reuters in an email. POLICY MISSTEP Since taking control Prayuth has rolled out a temporary constitution that grants the military absolute powers and hand-picked an interim parliament stacked with military figures that appointed him prime minister. The military government is striving to revive an economy that contracted in the first half of the year. There are signs of recovery but data on Friday suggested a broad-based recovery is some way off.[ID:L3N0QY1ZS] The man overseeing the economy in the new cabinet is one of its few civilians, Pridiyathorn Devakula, 67, a former central bank governor who was finance minister in the government the military set up after the 2006 coup. During that government, he bungled an attempt to impose capital controls to prop up the currency, leading to a sharp fall in the stock market. His appointment has garnered mixed reactions. "I don't think he is a stand-out to foreign investors and any who have followed Thailand for a long time remember his capital controls mistake," Andrew Stotz, chief executive at A. Stotz Investment Research in Bangkok, told Reuters. Others welcome someone they say is respected in the international financial community who, as economics adviser to the junta, has helped ease foreign investor concerns about stability. But democracy, said Chambers, may have to wait. "Prayuth's promises to achieve multiple goals also gives them what they perhaps perceive as a mandate to remain in power until these objectives are reached," said Chambers. "Only one year until elections? I doubt it." (Additional reporting by Pracha Hariraksapitak and Orathai Sriring; Editing by Simon Webb and Robert Birsel)