Bangladesh Signs Deal With US Oil Company

The Awami League government is furnishing antistate accords one after another in the power and energy sector. In this process they have signed an oil and gas production sharing charter against two blocks (Block No 10 and 11) in the Bay of Bengal with US Company Conoco Philips on 16 June 2011. Although the concerned people of the country opposed this accord, government has not paid any attention to that. Protesting this anti-state accord the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port has called already hartal (general strike) across the country. In the mean time, allegation has been surfaced for showing special favor to this US Company using the equivocation of words. Energy experts have termed this accord as against the interest of the country. They said due to the accord instead of ensuring energy security of the country the crisis would be accumulated more. Since the reserve would be finished to cover the cost of extraction of only 55 percent gas. Prof Anu Mohammad, member-secretary of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port, strongly criticizing the signing of accord with US Company said in a press briefing that India is extracting gas in one side of the Bay of Bengal while Myanmar is doing it on the other side. The Awami League has handed over whatever was left to the US Company on 16 June last through an accord. He said it is our resource but we are going to get only 20 percent and the US Company will get 80 percent. However, the government is saying that we are going to get 80 percent of the gas. It is totally baseless, he commented. He said that 55 to 80 percent of the profit had been mentioned in the accord. But before that they would take 55 percent for covering their expenditure. Because of the imbalanced nature of the accord we will not be able to see the face of profit ever. Since the reserve of gas would be finished just to cover the cost of extraction. This accord must be scrapped. Because of this imbalanced accord the energy security of the country will not be ensured. Rather it would make our crisis condensed as only the ocean was the major source of our energy security. Due to this imbalanced accord it has been started by handing over two blocks to the US Company. If we fail to resist it then the entire thing will be slipped through our hands.
Cost of Extraction
Presenting the different sides of the accord Professor Anu mohammad also said where a local company can dig well for only BDT 600 million to 700 million ($8.57-10 million) there foreign companies show the cost four to five times more to withdraw the cost of extraction. That means, 3.50 billion takas ($50 million). Scope has been given to withdraw 55 percent of the cost. He thinks for that they would take away 80 percent of the gas showing excess cost. They would used up the reserve of the gas for withdrawing the cost. Such has been done with Sangu gas field. He also said scope of export has been provided in the accord mainly to hand over the Bay of Bengal to foreigners. He said US Company would take away most of the gas that would be extracted from here. What would be left will not be possible to bring in to the coast setting up 280-km-long pipeline.
Almost 20 percent area of the two blocks that has been covered in the accord for exploration of gas is part of the disputed area. Among this India has objection to some part of block no. 10 while Myanmar has objection for a small part of block no 11. Neighboring country India has claimed over 1,164 sq km area of block 10. Among the 3,864 square kilometer area of block 10 2,700 square kilometer is non-disputed. Area of block no 11 is 2,899 sq km. Among this 2,460 square kilometer is free of dispute. The rest 439 square kilometer area is disputed. Myanmar has claimed over this area. In addition, there is claim of neighboring country over most of the areas of block no 5. Both the countries applied to the Arbitration Council of the United Nations for dispute resolution. The issue is waiting to be resolute.
Accord Consists
According to the production sharing charter signed with the US Company guarantee money would be $160 million. This would be used up in three phases. Among these in the first phase $52 million, $58 million in the second phase and $50 million in the third phase would be spent. For block development they have to make 2D survey in 100 square kilometer area. In the first phase geological survey would be done in 973 line kilometer. In the second phase they would perform 3D survey in 500 square kilometer area and in the third phase exploration wells have to be dug in the sea bed to 2200 kilometer.
Term of Accord
The term of the accord would be nine years. It would be for five years at first then the extension of the accord would be made by two years at a time for twice. After the geological survey, according to the condition of the accord, if the US Company does not dig any exploration well then the accord would be null and void after three years.
Location of Block 10 and 11
Location of block 10 and 11 is 280 kilometer from the Chittagong port. Depth water in these two blocks has been fixed one to one and a half kilometer or 3,300 to 5,000 feet. The total area of these two blocks is 5,158 square kilometer including the disputed area with India and Myanmar. Among these the disputed area is 1,605 square kilometer.
Due of Bangladesh
US Company will get the highest 55 percent of the gas of the total explored gas as for charge of the cost of exploring gas if gas or oil is found in any of the blocks. Bangladesh will get minimum 60 percent to highest 85 percent of the gas out of the rest of 45 percent. And Bangladesh will get minimum 55 percent to highest 80 percent of the natural gas.
Condition of Export of Gas
Scope of exporting gas has been included in the accord. But in that case the Petrobangla has to be notified first. If Petrobangla does not respond within six months then they would look for some other excluding Petrobangla for selling gas within Bangladesh. If Petrobangla rejects then they would sell gas to third party within Bangladesh. If the third party is not found for selling gas then they would be able to export gas to abroad. But in that case the gas has to be transformed into LNG (Liquid Natural Gas). According to the international market value of the gas, Bangladesh has to pay that. Before exporting LNG permission of the Petrobangla is to be required.
Income Tax has to be borne by the Company
According to the accord, the US Company has to bear all the income taxes. In that case if the US Company signs agreements with other company then the tax would be borne by them including the income tax of all officers and employees of the company.
Allegation of Granting Special Favor to US Company Using Equivocation of Words
Energy experts have said that in the signed accord with US Company Conoco Philips more scope of protecting the interests has been given than the Model PSC 2008 where the scope of protecting the interests of foreigners was provided. Using the equivocation of words special favor has been made to this US Company. This not only hampered the interest of the country but also scope of giving ownership of most of the extracted gas from the seabed has been given to Conoco Philips.
An official of Petrobangla claimed anonymity said when the tender for exploring oil and gas in the deep sea has been invited on 15 February of 2008 then seven companies participated. Evaluation Committee recommended to award block 10, 11, 12, 15, 16, 17, 21 and 29 (total eight blocks) to US Company Conoco Philips. But due to conflict with India and Myanmar with maritime border later in the meeting of ECNEC on 24 August of 2009 permission to sign PSC for exploration in block 10 and 11 was given. US Company Conoco Philips participated in the tender following all the condition s of the tender. But later special favor had been provided to this US Company in several regards. Even the objection of the law ministry raised during the vetting of law ministry for verifying the draft of the accord has not been followed.
That responsible official of Petrobangla said there was condition in the Model PSC that for dispute it would be resolute in the court of Dhaka following the conventional laws of Bangladesh. But changing that, it has been said that if the contractor does not agree about Singapore then the arbitration would be held in Dhaka. That means, it entirely depends on the US Company. They do not agree about Singapore then it would be held in Dhaka. As a result, if any such major accident like Niko occurs then the resolution of that would be held in Singapore instead of Dhaka.
In the meantime, in the Model PSC sole authority was given to Petrobangla to determine the quantity point for gas. But changing that, it has been said that it would lie where the development plan would held. At the same time it was said that the contractor will be liable to pay compensation if any accident occurs due to inefficiency. But dropping the term inefficiency it is said that they would held responsible for the accident if it occurs due to negligence.
It is known, objection has been raised from the Law Ministry about this during the vetting. But the accord has been signed accepting that. According to that if any accident happens then it would be difficult to get compensation. Because they would say that they have not done anything that can be termed as negligence. Accident has been occurred because of inefficiency.
However, the government has to install pipeline to bring gas. But if the authority of determining the quantity point was given to Petrobangla then they would be liable to send gas to that point where Petrobangla would fix it.
According to the energy experts, it is rare to provide such special favor to a foreign company dropping a word. Because, on one hand, scope of export has been given and on the other hand, Bangladesh has been deprived of rational share. According to them, we will only get 20 percent of the gas reserve and the rest would be obtained by the US Company. The 20 percent that we will get will not be able to bring to the coast. Since the cost of bringing that 20 percent gas is higher than the import cost of such amount of gas.

China and Future of Asian Security Order

Since 2010, the success or failure of peace settlement of conflict in the South China Sea has become a hot issue of concern to the international political community. From 18 to 23 July, the negotiation between China and the Association of South East Asian Nations (ASEAN) (over territorial dispute in the South China Sea) finally reached a breakthrough.
Based on the Declaration on the Conduct of Parties in the South China Sea, ASEAN and Chinese officials have reached a diplomatic agreement on a set of guidelines that can help to promote the creation of a mutual trust, mutual cooperation mechanism to implement the Declaration on the Conduct of Parties in the South China Sea.
Sovereignty Claim
Although this mutual cooperation mechanism will not change respective country's position on the sovereignty claim of maritime rights and islands in the South China Sea, but as we look at this breakthrough from all perspectives, the signing of this agreement has carried with it great significance.
First, after the relationship between China and Southeast Asian countries went through a round of crisis last year, the signing of the Guidelines now ushers a new turning point for China and Southeast Asian countries to move toward the right direction in resolving the conflict in the South China Sea. Second, despite the fact that the cause that led to the crisis in the South China Sea in 2010 was very complicated, but the arrival of the turning point this year has reflected the fact that China has the ability to digest and resolve crisis and turn crisis into opportunity. Third, more importantly, the signing of this ‘Guidelines’ agreement also signifies that Asian countries have the ability to use their own method to deal with one another's disputes and to establish an Asian regional order among them.
Presence of US forces in Asia
The presence of the US forces in Asia is an objective reality and the presence of the US forces in Asia is viewed by ASEAN member countries as a necessity force to ‘balance’ China. As such, very often, the US factor tends to make the construction of an Asian regional security order more complex. To China, the presence of the United States in Asia is something China cannot avoid but yet the presence of it is not at all that bad. While the presence of the United States in this Asian region has increased the difficulties of China in handling issues relating to Asia, the presence of the United States in Asia has also made China becoming more rational in handling regional affairs.
From historical perspective, the establishment of any form of regional order, especially the establishment of regional security order has never been an easy one. Most of the regional security orders that people see now were in fact achieved through wars. For example, the formation of the European security pact cannot be separated from the two world wars. The security alliance pact between the United States and Japan and the security alliance pact between the United States and South Korea are also inseparable from the past wars. Apparently, it is comparatively easier to establish new security order in post-war period.
War is a matter of life and death. Very often, in the post-war period, countries can discover many favorable conditions to form a new security order. In Europe, the two world wars have brought immense disaster to mankind. This disaster nevertheless led countries to reach a consensus on the need to establish a common security order to avoid future war. But in the process of building the European security order, the United States has played a leading role. After the Second World War, the United States has become the world leader acceptable by all the countries in Europe. Meanwhile, the United States also has the ability to play such a role using his massive economic power and military strength. In addition, development of the Cold War has also helped the United States to ascertain and establish its world leadership. During that period, Western Europe faced a strong Soviet Union; they needed such a similar strong US leadership to withstand their external threat. The Cold War that persisted for as long as half a century has highly institutionalized the security order in Europe and in the United States (mainly reflected in North Atlantic Treaty Organization [NATO]). After the Cold War, the United States and Western Europe are able to expand the NATO mechanism to cover the whole of Europe.
Western Security Order Derived From Long Period of War
Similarly, the security alliance partnership between the United States and Japan as well as between the United States and South Korea alliance pact were also formed in the post-victory period of the United States. After the defeat of Japan in the Second World War, the United States took control of Japan for the then Japan did not have any independent diplomacy. To a very large degree, the US-Japan security alliance after the Second World War was arranged by the United States single-handedly. Although Japan is the main participant in the US-Japan security pact, Japan does not have very much say in it. The security pact signed between the United States and South Korea is also quite similar. South Korea has no difficulty to accept the US leadership and allow the US troops to be stationed in South Korea because South Korea's security threat comes from North Korea.
However, in many ways, the kind of security order formed after the ‘post-victory’ period did reflect many internal inequities. Regardless of whether it is the European security order, or whether it is the alliance pact signed between the United States and Japan or the alliance agreement signed between the United States and South Korea, the United States is in a position to command absolute leadership. While on one hand, the leadership status of the United States is useful for the establishment of new security order, but on the other hand, member countries within the security pacts must accept the US leadership. Yet for the United States to maintain its leadership status, there are some basic prerequisite and conditions the United States must observe. First, there is the cost of war to bear. Second, there is the external threat to face. Third, the openness of the US leadership with the system and the ability of this leadership to accommodate the interests of the members within the group or security pact must adhere. If substantial changes occur in these conditions, the fundamental basis of such security order will be threatened.
After the end of the Cold War, NATO is able to continue and survive and expand by relying on its expansion range. At the same time, it might be that the security threat coming from Russia has also helped in the cohesion of NATO. In the case of the alliance pact between the United States with Japan and with the alliance pact between the United States and South Korea, there were certain periods of time when these alliance pacts between them becoming loose due to the lack of external threats. During certain period, the outcries of the people in South Korea in demanding the US troop withdrawal from South Korea were very high. In Japan, during Japan's Democratic Party leader Hatoyama's tenure as the Prime Minister of Japan, Hatoyama has also proposed the establishment of an East Asian Community in order to pursue equality status of Japan with the United States. Nevertheless, in recent years, North Korean has been viewed as the threat of both Japan and South Korea. Behind the security alliance pact of Japan and South Korea with the United States, these three countries have now considered China as their external threat.
In addition, a region's geopolitical environment can also have a unique impact on that particular region's security order. Such geopolitical impact is most obviously manifested in North America. In North America, the natural environment of the United States in that particular region makes the United States holding a dominating and supremacy position and so the United States has naturally become the leader in North America. It is also apparent to all that the North American security system is a kind of highly hierarchical dependence type of security system. In all aspects of strength and capability, whether it is Mexico or Canada, these two countries cannot be compared with that of the United States. These two countries also do not have any ambition to challenge the United States. Coupled with the openness of the US system itself, North America has developed a more natural regional security order than other regions in the world.
In Asia, the construction of the regional security order does not follow such a pattern. In the first place, unlike Europe, Asia has not gone through the type of prolonged war that Europe has gone through in the past. Moreover, even when there were wars in Asia, the wars did not produce any ‘victor’ similar to that of Europe. In the 1930s of the last century, Japan had wanted to establish the Japanese Imperial order though the use of war, but Japan's ambition ended in failure. While we can China was the ‘winner’ or ‘victor’ after Japan's defeat, but in reality, China neither had the concept nor thought to establish a regional security order similar to that of the western countries. This was in addition to the fact that China did not have the ability and sufficient power to do so too. Due to the development of the Cold War, the US-Japan and US-Republic of Korea alliance were formed. In this regard, it was also quite impossible for a regional security order be formed in Northeast Asia to include all the countries in that region then. On the contrary, due to the fact that the security pacts signed between the United States and Japan as well as the security pact signed between the United States and South Korea have all viewed China as their potential external threat, the security order in the Northeast Asian region is in fact an ‘insecure’ security order. Under the current situation, for a security order to be formed in the Northeast Asian region, it must satisfy the following two conditions. First, China has to accept the regional security order led by the United States; and at least for the minimum, China must not challenge such a regional security order led by the United States. Second, the United States must accommodate China's interest to a certain level. However, these two considerations are rather unstable. As such, as of today, the Northeast Asian region still faces the challenge to form a regional security order that can include the need of both China and the United States.
ASEAN Regional Security Order
However, ASEAN is a special case. It is a successful non-western regional security order. While western security order has set conditions for its formation, there is no such condition exists among ASEAN member countries. For example, although there are sporadic conflicts among ASEAN member countries, however, within ASEAN there is no breakout of war in magnitude comparable to the type of war that happened in Europe in the past. As such, within this ASEAN regional group, there is no ‘winner’ or ‘victor’ of wars or conflicts. Moreover; the Southeast Asian region also does not have a natural leader similar to that of the United States in other regions of the world. Although among the ASEAN member countries, Indonesia is a natural big country within the Southeast Asian region, but in term of Indonesia's internal strength and external influence towards other countries in Southeast Asia, the status of Indonesia is far less from such a position that can be compared with that of the United States in North America. Moreover, although at different period of time, Southeast Asia also faced some external threat, but these threats were far less serious than the situation in Europe or Northeast Asia.
Under such conditions, the countries in Southeast Asia embarked on a non-western path and established a non-western regional security order for themselves. After the formation of ASEAN, due to the fact that ASEAN's security order is different from that of the western style secur ity order, ASEAN has all along been viewed as a regional forum with no real significant power or even carried any significant meaning. However, on practical level, ASEAN is no less insecure than any region (including Europe) since the end of the Cold War. As stated above, the security order within ASEAN is neither imposed by external force nor that was its security order ascertained or formed by a strong and forceful leader outside the ASEAN region. As such one can also hold the view that the creation and development of this regional security order in ASEAN in fact hold more democratic features than other regions. As a matter of fact, the contact, discussion, consensus and trust building mooted among all ASEAN member countries as well as the ultimate institutionalization and legalization of the work of ASEAN are the main security features of this regional grouping in Asia.
Post-Cold War Scenario
After the Cold War, ASEAN has also faced many challenges. But ASEAN accepted and succeeded to face such challenges. At certain period of time, ASEAN thought that the most effective means to maintain ASEAN's regional security was to exclude the involvement of all external big nations. Later on, ASEAN leaders realized that the exclusion of great powers into the Southeast Asian region was not realistic for it did not meet the interest of ASEAN. In this regard, ASEAN has successfully transformed into an inclusive regional forum, and has gradually established an inclusive regional security cooperation framework within the Asian region. The most outstanding achievement of ASEAN is that ASEAN has succeeded to accommodate China, Japan and South Korea from the Northeast Asian region into ASEAN's annual summit and forum. Of late, ASEAN has also included the participation of the United States in its ASEAN Regional Forum. At this year's forum held in Bali, China and ASEAN reached a non-binding guidelines and agreement for the implementation of the Declaration on the Conduct of Parties in the South China Sea. This is one of the achievements of ASEAN in dealing with regional affairs.
Historians in the future will say that this ‘Guidelines’ agreement reached between China and ASEAN is a starting point of a new China-ASEAN regional security order. In the formation of this regional security order, China will play a key role in it. If the China factor is ignored, then the talk of a new Asian regional security order would be impossible to achieve.
As a rising Asian power, China is destined to play a major role in Asia's regional security order. This is regardless of what other people's subjective wish of Asia's regional security order will be. How China acts will determine whether Asia can form a certain kind of regional security order or not. From what is happening now, it is obvious that China has gradually used its own method to successfully integrate itself into the Asian regional security order that uses ASEAN as its fundamental base. China's choice is not only consistent with China's national interests. China's choice is also more in line with ASEAN's interests. However, this process is not easy. For China, this is a challenge. China must learn, adapt and take up the responsibility to shoulder the duties entrusted along the process.
China's transformation of behavior in dealing with other countries has comprehensively reflected the non-western concept of Asian feature. In China's relationship with ASEAN countries, like all other big countries, China's initial response was refusal. But very soon, China accepted the multilateralism nature of ASEAN and within this multilateral framework; China played an active role in it. In this kind of multilateral relationship, China also made effort to stress on putting multinational economic relations with ASEAN first; and then later on expanded to other areas, including the security fields. Now, through trade and economic relations, China and ASEAN countries have gradually built mutual trust with each other and have begun to engage in various aspects of institutionalized constru ction. Although China and ASEAN have already achieved the implementation of free trade through the signed China-ASEAN Free Trade Agreement, China still puts its focus on building up economic relations with all ASEAN member countries. Of particular note is that the reason why ASEAN is able to accommodate China is because China has chosen to be accommodated by ASEAN. In this regard, China is different from some other major powers which are only interested to fight for leadership role within the ASEAN framework. After China joined ASEAN's friendly pact, China has no intention to fight for leadership role, but instead, China acknowledges and supports ASEAN's leadership role. In this regard, the behavior of China and the action taken by China pose a striking contrast of the behavior of the United States. It is obvious that the United States has begun to assert its leadership role in this ASEAN region once the United States joins ASEAN as part and parcel of its partnership body. In fact, while welcoming the participation of the United States into the ASEAN mechanism, at the same time, ASEAN countries also keep close watch and concern of the US behavior within the ASEAN framework.
On the other hand, based on China's foundation on trade and economic ties with ASEAN countries, China already has the condition to establish a regional security order with ASEAN. As compared with the western culture, China's culture has never been one that will put a lot of emphasis on maintaining regional security order. On regional security matter, China has always been very cautious. Although the Declaration on the Conduct of Parties in the South China Sea was discussed in 1992, it was only in 2002 that China has agreed and signed the Declaration on the Conduct of Parties in the South China Sea with all ASEAN member countries. Then it was after nine years that ASEAN and China finally signed the agreement to implement the ‘Guidelines’ of the Declaration. This newly signed ‘Guidelines’ pertaining to the South China Sea conflict is an assurance of peace and security to the South China Sea, a piece of ocean that has multiple party disputes over the sovereignty of its islands and maritime resources. The next step for China and ASEAN to do is to start carrying out negotiations and working on the Declaration on the Conduct of Parties in the South China Sea so that it can have legal binding.
Although the ‘Guidelines’ signed between China and ASEAN still does not have any legal binding, and although the close cooperation between China and ASEAN and sovereignty dispute in the South China Sea are two different issues, but after all, the provision of this ‘Guidelines’ has already paved way for a good start to resolve the pending conflict in the South China Sea in a more peaceful manner. In resolving disputes between countries, the West tends to use hard power and military policy. Yet unlike the West, China is more inclined to create a friendly atmosphere first and the later on, try to find a peaceful solution to resolve the sovereignty disputes.
South China Sea Conflict
After China's reformation and opening up, China did not waste very much time and had applied peaceful settlement means to resolve its border conflicts between Russia, Vietnam and other countries. This achievement of China is rare in the West. We have reason to believe that although the South China Sea territorial conflicts can be more complicated that China's border issues with other countries and although in the South China Sea conflict, there are constantly some external forces beyond the region trying to interfere with the already complicated conflicts in the South China Sea, we have reason to believe that China, a country that is able to accept past mistakes as its learning experience is bound to find some peaceful means to resolve the issues in the South China Sea.
At a higher level, people can also believe that unlike the West that uses force, ‘external threat’ and supremacy leadership to establish regional security order, China and Asian countries are capable to clearly establish its own distinctive regional security order embedded with Asian characteristics. If the western security order is a manifestation of the western culture, then the emergence of the Asian security order must by default also reflect the embodiment of Asian culture. In more than a century in the past, although Asian countries (including China) have, in varying degree, influenced by the western culture, but with the emergence of countries with long history of civilization such as China and India, Asia will eventually return to Asia. Asia will eventually establish an Asian regional security order that truly belongs to Asia.

Major Challengess for New Thai Prime Minister

Phuea Thai Party core members have shed their tears of joy after their party scored a clear majority victory, winning 265 MPs. But several problems, caused by factors both inside and outside the party, are lying ahead of female prime minister-designate Yinglak Chinnawat.
Several core members of the Phuea Thai realized that it is not easy for the five-party coalition government with 299 MPs to stay in office until it completes the four-year term without facing major obstacles.
War of Political Conflicts
The country is still in the war of political conflicts while major power realignment is taking place in the Thai society. In particular, the results of the election showed that the Phuea Thai won the hearts of many grassroots people in the North and Northeast but it still failed to win support of the middle-class people in the capital.
The Phuea Thai won 265 House seats but failed to seize control of the capital. It was beaten by the Democrat Party in Bangkok at the rate of 10 to 23 MPs. This should serve as a reminder that if Yinglak fails to please the middle-class people by failing to tackle economic woes and by making mistakes in her administration, the city residents could lose faith in her very fast.
To remain popular and remain in office as long as possible, the government must be able to win support from all classes, not only the grassroots. The government must also win support from the middle-class and high-class people and former Prime Minister Thaksin Shinawatra has learned this lesson bitterly.
Tough Time Ahead
Survival of Yinglak and the Phuea Thai-led government will depend on her ability to tackle so many problems, which are waiting for her. The lack of political experience is a major weak point that may cause Yinglak to fail to pilot her government ship to the shore.
Unlike Yinglak, the two previous proxy prime ministers of Thaksin - Samak Sunthorawet and Somchai Wongsawat - had experience in country administration quite a lot.
Late Samak was a veteran politician, who had a lot of experience from several election contests. He also had rhetoric but he eventually succumbed to the pressure from the opponents. His government could last for only nine months before the Constitution Court disqualified him as the prime minister for working as a TV host in a cooking program. Somchai, a brother-in-law of Thaksin, stayed in office as the prime minister for only three months before he faced a legal case for ordering the crackdown on protesters led by the People's Alliance for Democracy (PAD) on 7 October. Eventually, the Constitution Court dissolved the People Power Party, leading to power realignment that saw the Democrat becoming the government.
It is worth waiting to see whether inexperienced Yinglak will be able to withstand all the pressures. Will her strong points, which are her gender, her humbleness and her willingness to compromise, help her survive?
Major Adversaries
Of course, the condition in this battle for Yinglak has changed a lot. But several characters, who stand on the opposite side from Thaksin, remain unchanged. They include the PAD and the Army, which remain Thaksin's major adversaries until now. A factor that could affect the survival of the Yinglak government is amnesty for Thaksin. Although Yinglak and Thaksin have insisted that no amnesty would be given for a single person, it could be seen that an amnesty would definitely be given eventually. They likely to grant a blanket amnesty for all cases happened after the 19 September 2006 coup. A new constitution-drafting assembly may be assigned to draft a new charter with a provisional clause to grant the amnesty.
And the immediate problem Yinglak will face is to satisfactorily share benefits inside the Phuea Thai. Earlier, Thaksin has used several Phuea Thai and red-shirt leaders to fight for him in the war for power, causing several of them to face legal cases. As a result, after the war has been won, these Phuea Thai and red-shirt leaders hope to receive rewards from the big boss.
Whi le there are several persons waiting for the rewards, the Phuea Thai will have only 27 to 28 Cabinet seats for sharing after giving the others to four coalition partners. Lessons from the past showed that when a major party allocated Cabinet seats, rifts often occurred after all factions could not be satisfied. The People Power was an example, which showed that rifts from Cabinet seat sharing caused it to eventually fall during the Samak term.
But if Thaksin allows red-shirt leaders and Phuea Thai core members, who are facing legal cases, to become Cabinet members, the new Cabinet will lack public trust. The Phuea Thai scored an overwhelming victory partly because the people have high expectation in the Phuea Thai government. As a result, the Phuea Thai must rush to shore up public confidence by making its Cabinet look good. Good and capable persons must be brought into the Cabinet to tackle the economic crisis. The government must also refrain from touching sensitive issues that will bring about criticisms and conflicts in the society.
Another problem waiting for Yinglak is the ties with the Army, which remain volatile. Army Commander-in-Chief General Prayut Chan-ocha stands on the opposite side with Thaksin and Yinglak so if Yinglak rushes to put Army officers loyal to Thaksin to power inside the Army, her government could face severe resistance from the Army.
Another problem waiting for her government is related to the issue of loyalty to the King. Thaksin and Phuea Thai members have been trying to portray themselves as being loyal to the King. Yinglak has announced that she would hold a grand celebration for His Majesty the King to mark his 84th birthday anniversary. Such a grand celebration may prompt certain groups of red-shirt people to become dissatisfied against the Phuea Thai government. The groups earlier attacked the Phum Chai Thai for what they saw as wasting the money for organizing such a grand celebration.
Moreover, the ties between the red-shirt movement and the Phuea Thai could become a time bomb in the future. This is because the United Front of Democracy against Dictatorship still adheres to its ideology to fight against the aristocrats. Their stand could contradict with the future stand of the Phuea Thai. And if the Phuea Thai pushes for a blanket amnesty for all sides, its policy could run against the stand of the red-shirt people.
Implementing Populist Schemes
As a result, it is not easy for Yinglak to run the country as the prime minister amid volatile rifts both inside and outside her party. Worse still, she will be also be required to honor her words to implement several populist schemes, which will require several hundreds of billions of baht.

If her government really implements the populist schemes, the fiscal status of the country could be affected. But if she declines to implement the schemes or implement them only a little, she will be regarded as failing to keep her words.
Other Major Challenges
1. Consequence of Uncertainty Related to Mps Endorsement by the Election Commission (EC): So far, the EC has not yet endorsed up to 95 per cent of MPs so that the House of Representatives could convene its first meeting within 30 days after the election. Yinglak herself and 12 red-shirt leaders, who are Phuea Thai party-list MPs-elect, have not been endorsed either.
2. Election Cases and Complaints Against Coalition MPs: These cases range from vote-buying complaints in constituency-based elections to frauds that may require the Phuea Thai to be dissolved. Moreover, a Phuea Thai candidate, Somkhit Banthaisong, who won most votes in Nong Khai's Constituency 1, has received a yellow card. The Democrat has planned to attack the Phuea Thai when it announces the policy statement to Parliament. The Democrat is expected to hit the Phuea Thai over the yellow card and over allegations that it violated Article 53 of the MPs and Senators Election Act by allegedly telling lies during election campaigns. The Democrat will also attack the Phuea Thai for allowing former prime minister Thaksin Chinnawat, who is under five-year political ban, to interfere in the management of the party.
3. A Direct Hot Potato in Yinglak's Hands: If she becomes the prime minister, her assets declaration to the National Anti-Corruption Commission will be a hot potato for her. Her assets statement will be watched and scrutinized because parts of her assets will be related to the sale of Shin Corp's shares and her stake in the SC Assets firm. Moreover, her testimony to the Supreme Court's Criminal Division for Holders of Political Office in the Bt46 billion seizure case against Thaksin may also return to haunt her in the assets declaration.
4. Rhetoric of the Professional Opposition Democrat Party: Democrats are eagerly waiting to test Yinglak's limit in a parliamentary debate. The party is rushing to elect its new executive board before the Yinglak government announces its policy statement in Parliament. The policy debate will become like a censure debate against her by the Democrats.
5. Promise of Bt300 Daily Minimum Wage: The Phuea Thai's promise to increase daily minimum wage for unskilled workers to Bt300 has not been welcomed by the private sector because it will raise the cost of the business sector. It is also in doubt as to whether the Bt300 wage policy could be implemented because the daily minimum wages will have to be approved by the tripartite Wage committee, whose members are representatives of the government, employers and employees. Moreover, the Constitution and the convention of the International Labor Organization require wages to be given equally without discrimination. This means foreign laborers in Thailand will also be entitled to the Bt300 minimum wage.
6. Promise To Guarantee New University Graduates' Salary of Bt15,000 a Month: This policy is opposed to by businessmen because it will increase the manufacturing cost. And the measure to reduce corporate income tax rate from 30 per cent to 23 per cent would not compensate the added cost caused by salary increase. Later on, some Phuea Thai members corrected themselves by saying only university graduates, who have received a special training, would be eligible for the Bt15,000 monthly salary. But the Phuea Thai failed to state this point during the election campaigns. It is also in doubt whether the plan to increase salaries of state employees to Bt15,000 for private firms to follow suit would be successful. Critics fear that this measure would instead add a budget burden on the government.
7. Rice Pledging Scheme: The pledging scheme is seen as having impact on the market mechanism and it is still unclear how to prevent massive corruptions that happened in the past.
8. Promise To Hand Out Free Tablet Computers to Students: There is a question about the budget for buying the co mputers and quality of the computers. Critics also question how to make sure that students will make most of the computers for studies and creativities.
9. Living Cost and Economic Hardship: So far, it is still unclear how Yinglak would tackle the rising prices of consumers' goods although Yinglak talked about this problem repeatedly during her election campaigns.
10. Political Time Bombs: There are several political time bombs including the reconciliation process, political amnesty and efforts to help Thaksin return home. Will these lead to another round of severe rifts in the country?
All of these challenges will come up for the Yinglak government to handle one by one. If she fails to tackle these problems or deal with these issues with satisfactory results, not only her government will have no future but Thais also will see their future dimmed.
Our words will become our master. So, no one should blink while watching Yinglak facing the challenge as Thailand's first woman prime minister.