The standoff between pro- and anti-government factions of the Thai political establishment continues unabated two days after the imposition of a state of emergency in Bangkok. Despite a ban on political gatherings and the stationing of troops on the streets, thousands of Peoples Alliance for Democracy (PAD) demonstrators remain entrenched in the Government House compound, which they have occupied since August 26.

Prime Minister Samak Sundarevej declared the state of emergency on Tuesday after clashes early that day between PAD protesters and government supporters, each armed with slingshots, firearms and clubs, left one person dead and several others injured. PAD leaders responded by declaring their occupation would continue until Samak had resigned and their demands had been met in full.

The right-wing PAD organisation, which is led by media tycoon Sondhi Limthongkul and former army general and Bangkok governor Chamlong Srimuang, is backed by sections of the military, state bureaucracy and royalist establishment. It accuses Samak and his Peoples Power Party (PPP), which won elections last December, of functioning as a proxy for former Prime Minister Thaksin Shinawatra, who was ousted in a military coup in September 2006 following months of political turmoil.

Despite its name, PAD is profoundly anti-democratic, reflecting the contempt of the Bangkok elites towards rural voters who supported Thaksin’s Thai Rak Thai (TRT) party and, after it was banned, the PPP, which was formed by former TRT supporters to contest last year’s election. PAD’s four demands include maintaining the present constitution drawn up the military junta and “political reform”, which would involve 70 percent of parliamentarians being appointed by the military and state bureaucracy.

PAD leader Sondhi told Time this week: “It’s taken for granted in the West that democracy is the best system. But all we are getting in Thailand is the same vicious cycle of corrupt, power-hungry leaders. This system is not working.” Many of the generally well-heeled middle class PAD protesters share the sentiment. “If democracy brings Samak, then I don’t want it. We have to figure out another way,” finance executive Wijeau Noinoo told the magazine.

PAD has also been backed by some public sector union leaders who called for strike action yesterday to cut water and electricity, and disrupt telecommunications, rail, road and air transport. The unions, which cover an estimated 200,000 workers, first backed PAD during its anti-Thaksin protests in 2006 as a means of posturing against his government’s privatisation plans. Now these union bureaucrats are seeking to tie sections of the working class to PAD’s anti-democratic agenda.

In the event, few workers took part in the strike. While workers are not supportive of the conservative Samak government and its economic restructuring agenda, the low turnout indicates at the very least a distrust of the right-wing PAD demagogues. Over the past week, rail workers and groups of protesters have disrupted rail lines and airports in southern Thailand. Resentment toward Thaksin is especially strong in the country’s south, where he unleashed a brutal military crackdown on Muslim separatists.

The ability of PAD leaders to defy the state of emergency rests in large part on the refusal of the military thus far to take any action to disperse the occupation at the Government House compound. The army has deployed soldiers in riot gear but without firearms on the streets of the capital.

After being handed emergency powers, army commander General Anupong Paochinda held a media conference on Tuesday in which he declared: “I can assure every person that the Thai police and military will not use force against any civilian by any means.” While not actually ruling out an army takeover, he added: “If the military uses force to stage a coup, it will create more problems.”

Calling for negotiations to resolve the impasse, the general said: “This is a very sensitive issue, and whatever we do, we have to be careful not to take sides. This is a situation among people in society, two groups who do not agree.” The army has not been noted for its neutrality or concern for the use of force in the past. Anupong was one of the generals involved in ousting Thaksin in 2006. Although that coup was bloodless, the army has not hesitated in the past in gunning down unarmed demonstrators.

While apparently reluctant to intervene directly, Anupong is clearly sympathetic to the PAD leadership. Moreover he is under pressure from army factions that are pressing for the overthrow of the government. Asia Times correspondent Shawn Crispin explained yesterday: “Analysts and government officials contend the escalating conflict is being driven at least partially by intra-military competition, pitting hardliners against moderates. PAD leader and former army brass Chamlong Srimuang is known to have ties to a hardline camp, including former Internal Security Operations Command deputy director Panlop Pinmanee and former spy chief and 2006 coup architect Prasong Soonsiri.”

The events of the past week are the product of bitter factional infighting within the Thai elites that stretches back to late 2005 when Sondhi Limthongkul launched a protest campaign aimed at bringing down the Thaksin government.

Sondhi had initially backed Thaksin, who came to office in 2001 by exploiting the widespread discontent with the previous Democratic Party government and its implementation of the IMF agenda in the wake of 1997-98 Asian financial crisis. Thaksin won support on the basis of a right-wing populist program that appealed to Thai nationalism on the one hand and promised limited handouts, particularly to rural villages.

In office, however, Thaksin came under pressure from international finance capital, especially as the economy began to slow. His government increasingly turned to privatisation, economic restructuring and free trade agreements as a means of attracting foreign investment against fierce competition from regional rivals such as Vietnam. As he did so, Thaksin confronted growing resentment and opposition from his erstwhile supporters, who accused him of corruption and pandering to the rural poor.

Confronted with growing PAD protests in 2006, Thaksin called and won a snap election but the country quickly became embroiled in a protracted constitutional crisis. The army, backed by King Bhumibol Adulyadej, seized power and implemented an economic program based on the monarch’s theories of national self-sufficiency. The junta quickly ran into difficulties when it attempted to impose capital controls in December 2006 provoking a huge one-day fall in share prices of 14 percent and prompting a partial reversal of the policy. A similar market reaction took place in January 2007 when the regime imposed new foreign capital restrictions.

Foreign investment slumped last year and the economy grew by only 4.8 percent—nearly one percentage point below the average for 2002-2006. Under growing criticism from business and foreign investors, the military announced its intention to hold new elections. Before doing so, however, the junta pushed through a new constitution and a special security law sanctioning a continued political role for the military. The TRT was outlawed and 111 senior TRT figures, including Thaksin, were banned from politics for five years.

The fact that the pro-Thaksin PPP won the election last December incensed its political opponents, who relaunched the PAD demonstrations in May, ostensibly in reaction to Samak’s threats to change the constitution. At the same time, a series of legal battles were waged, aimed at convicting Thaksin of corruption and illegalising the PPP for alleged electoral breaches. Yesterday, the election commission finally called on the courts to ban the PPP—a move that could further undermine the Samak government.

The excruciating character of the present crisis was summed up in a Bangkok Post editorial on Tuesday. “As the situation now stands,” the newspaper declared, “it appears there is still no solution to the current political impasse. The big question now being asked by all concerned citizens is how long the standoff will last and whether the country will survive without collapsing first.” The editorial concluded with a forlorn appeal for PAD to call off its protests and for Samak to call fresh elections. Few people believe, however, that such steps would resolve the protracted infighting.

A marked shift in attitude is evident in the international press, reflecting the concern in financial circles that the crisis will affect not only the Thai economy but also the broader region. Unlike in 2006, press reports have increasingly emphasised the conservative and anti-democratic character of the PAD organisation and its backers in the Thai elite. This appears to be one “colour revolution”—PAD protesters all dress in royalist colour of yellow—that the major powers are reluctant to support.

The British-based Telegraph, for instance, described the PAD protestors in the following scathing terms: “This is an epic love-in to end democracy. The problem for the middle-class protesters camped out at Government House in Bangkok—and for their leaders, and their leaders’ backers, who are throwing this enormous free party—is that the poor who dominate the electorate keep choosing the wrong government.”

A Newsweek article pointed to the underlying economic issues: “Those who populate the Peoples Alliance include prominent Bangkok-based politicians, retired military officers and conservative religious leaders as well as union bosses representing state enterprises and civil servants. This ‘old elite’ is seen to fear deregulation, unfettered global competition and greater foreign participation in Thailand’s economy that both Samak and Thaksin favour. They have accused both leaders of manipulating poor, uneducated rural voters to upset Thailand’s long established social order and even challenge the monarchy.”

A Financial Times editorial yesterday bluntly warned against another coup, declaring: “Thailand should pause. If Mr Samak is to fall from power, it should be by parliamentary means. Ruling coalition politicians may have grounds for ousting the prime minister in the event he mishandles the crisis. That would mean fresh elections. But the removal of Mr Samak by an alliance of street protesters and a reactionary elite would mean mob rule in Thailand.”

All these newfound concerns for the rule of democracy in Thailand, the role of “a reactionary elite” and the rights of the poor have to be taken with a large grain of salt. The international media had virtually nothing to say about the political character of PAD and its backers in 2006 and voiced only the mildest of criticisms when the army seized power. This time around, not only is the press sympathetic to the government’s economic agenda of opening up Thailand to foreign investors, but it fears that the protracted turmoil has the potential to spill over into other countries in the region where signs of an economic slowdown are already emerging.

One final point needs to be made. In the midst of this intense political crisis, the absence of any party that fights for the interests of the working class is particularly marked. Despite their professions to the contrary, neither of the two competing factions has the slightest concern for the plight of workers or the rural poor, who are facing escalating prices and declining living standards. Each side is relying on its supporters among the conservative trade union leaderships and the plethora of non-government organisations to maintain the illusion that it somehow supports working people and the poor.

To fight for their own independent class interests, workers and youth need to begin the construction of a socialist party, which in turn requires coming to terms with the reactionary legacy of Stalinism in Thailand and internationally and assimilating the key historical lessons of the world Trotskyist movement.