The uneasy truce in Thai politics since Prime Minister Yingluck Shinawatra came to power in August 2011 has given way to renewed street protests and familiar brinkmanship.
This time, the source of the controversy is a blanket amnesty Bill that would have absolved Thaksin Shinawatra and all major figures associated with Thailand's political conflict dating back to 2004.
As street demonstrations mounted, the Yingluck government and the ruling Puea Thai party retreated, signalling to pro-government senators to abort the Bill.
The amnesty Bill was duly voted down in the senate but the street protests led by the opposition Democrat Party have escalated into an open call for the government to resign or call a new election. The fallout from the amnesty debacle is at least threefold in the near term.
Impact on policies
FIRSTLY, the government's limited policy momentum has been lost. Ill-conceived and costly policies to guarantee rice prices and provide rebates for car purchases already eroded government credibility.
Its signature plan to invest US$67 billion (S$83 billion) from off-budget expenditures for a massive national rail and road modernisation over seven years will now be tougher to see through.
If Thailand's railways are revolutionised alongside some expansion and improvement of existing highways, the Thai economy could bank on the consequent multiplier effects from reduced transaction costs and efficiency gains for the next two decades.
The downside of this plan to make Thailand the centre of gravity in mainland South-east Asia centres on shoddy implementation and likely corruption and graft.
Yet it is a promising policy that is worth a try in view of other options. But now it will be hindered by the political maelstrom generated by the anti-amnesty fury. The same can be said of the US$11.5 billion flood management plan, which has been charged and accepted by the Constitutional Court for bidding irregularities.
Despite its overwhelming electoral mandate, the Yingluck government has had a limited policy drive because of Thailand's polarised political environment. Oppositional forces have been formidable even though they keep losing at the polls. In the wake of the amnesty controversy, the Yingluck government will now be hard pressed to push through its major policy schemes.