<!-- IMAGE -->

A decision by the Thai prime minister to declare a state of emergency has again set Thailand on an uncertain path as the government moves to end weeks of anti-government protests.  The government faces a major test of credibility after anti-government protesters forced the cancellation of an Asia regional summit.

The declaration by Thai Prime Minister Abhisit Vejjajiva of a state of emergency Sunday against supporters of former leader Thaksin Shinawatra is expected to be a critical test for the government to recover lost credibility.

Mr. Abhisit, in a nationally televised broadcast, said the government was preparing to spend a few days to enforce the law and in his words, return the country to normal.

The state of emergency came after supporters of former Prime Minister Thaksin forced the Government to cancel a summit of leaders from the Association of South East Asian Nations. The protesters had breached security at the venue, a resort hotel at the seaside resort of Pattaya.

Sunai Pasuk, Thailand representative Human Rights Watch, said government missteps in ensuring security had led to widespread criticism.

"The government is now facing perhaps the worst credibility crisis. It is facing criticism from inside Thailand and outside for failing to use legal measures to prevent an escalation of internal violence," said Sunai.  "Every step the government has taken over the past three days seems to be wrong. "

The decree bans crowds of five or more.  It also restricts broadcasting and bans the destruction of property, the blocking of roads and forced entry into buildings.

Pro-Thaksin supporters have rallied outside a government administration building since late March.   Thaksin supporters have used the rallies to demand the resignation of the three month old government of Mr. Abhisit, and fresh elections.

On Thursday, protesters stepped up pressure on the government, blockaded key roads in Bangkok and then traveled to Pattaya, 120 kilometers from Bangkok, to the venue of the long planned ASEAN summit.

Since then political tensions have escalated as the government seeks to regain control.

Thailand's Nation newspaper warned the country was again on the brink, that the country's political showdown had reached "the point where everyone can only pray and nobody dares to predict the outcome".

Analysts fear Thailand may be heading for a repeat of major disturbances that occurred in 1992, when pro-democracy protesters demonstrated against a then military led government. At least 50 people died and more than 600 were injured during the turmoil.

Somphob Manarangsan, an economist with Chulalongkorn University, said he expected the days ahead to be critical for Thailand's political future.

"The next four or five days it's going to be quite a critical time for Thailand," he said.  "The government will play an increasing role to control the situation of the country. As you can see the government has lost serious face during the past few days.

Analysts have already expressed concern over the impact the protests will have on the economy.

Reports Sunday estimated that tourism income losses for the seaside resort of Pattaya were expected to be around five point six billion dollars as a result of a fall off of tourism over the year.

Economists have warned that the political uncertainties will further delay the implementation and effectiveness of the government's $3.5 billion economic stimulus package in the face the global financial crisis.

The Asian Development Bank recently warned political uncertainties could trigger a five percent contraction in the economy.  The ADB initially forecast a contraction of two per cent.