In 1997 the Thai baht pretty much collapsed, dragging the economy (and many other southeast Asian economies) down in a screaming heap. The unfinished skyscrapers around Bangkok are a legacy of this downturn. In August 1997 the International Monetary Fund stepped in with a bailout package of austerity measures which – although it slowed Thailand’s growth dramatically and hit the poor the hardest – seemed to have turned things around by early 1998. By the turn of the new century, Thailand’s economy was no longer free falling, but rebuilding had only just begun. Genuine attempts to weed out corruption seem underway, but the poverty-stricken of Thailand are still wary of promises and agitating for more reforms.

Recent History
The relatively new Thai Rak Thai Party (TRT; Thais Love Thais), led by Thaksin Shinawatra, emerged as a force in Thai politics in the late 20th century, and saw many sitting MPs defect to its ranks. In parliamentary elections held in January 2001, TRT trounced Prime Minister Chuan Leekpai’s democrats.

Throughout his time in office Thaksin was able to broadly deliver on his promises and his popularity remained high among rural voters, his true power base. Among human-rights groups, however, he was less adored. He was dogged by rumours of corruption, drew criticism for restricting the media – Thaksin controlled Thailand’s only independent TV station – and instigated a heavy handed ‘war on drugs’ that left thousands dead. Even more damning was his failure to end the mounting sectarian violence in the country’s southern provinces.

In December 2004 the west-facing Andaman coast was hit by a tsunami, which killed more than 5000 people. Worst affected were small family-run businesses and fishermen, whose buildings and boats were lost to the waters. Aside from areas such as Ao Lo Dalam on Phi Phi island and the Khao Lak/Takua Pa areas in Phang-Nga province, the majority of tourist-reliant areas reopened within weeks or even days of the event.

Amid claims of corruption that sparked huge public demonstrations, Thaksin called a snap election on April 2, 2006. Although TRT won over 50% of the vote, the legitimacy of the victory was questioned as the major opposition parties boycotted the poll. Following an audience with the king, Thaksin chose to form an interim government with deputy Chidchai Vanasatidya as prime minister. In early May the courts overturned the April election result and called for a new vote in October. Thaksin then further angered his opponents by resuming control of the government. The situation came to a head on September 19. While Thaksin was in New York attending a meeting of the UN General Assembly, army commander-in-chief General Sonthi Boonyaratkalin carried out a bloodless coup, scrapped the constitution and appointed retired General Surayud Chulanont as interim prime minister.

The coup was condemned internationally but many Thais saw it as bringing to an end the rule of a corrupt leader and his government. This latter stance was given greater weight by the king’s indirect support and approval for the coup, which again confirmed his key role in Thai politics. With escalating violence in the south and increasing controls on the media, many in Thailand wonder just what the future holds for their brittle democracy.

all info taken from www.lonelyplanet.com