By Orathai Sriring
BANGKOK, March 26 (Reuters) - Thousands of protesters rallied in Bangkok on Thursday, demanding Thai Prime Minister Abhisit Vejjajiva resign as he launched a campaign to help low-income workers with cash handouts in a looming recession.
The rally by supporters of ousted Prime Minister Thaksin Shinawatra is the latest episode in Thailand's long-running political crisis, with Abhisit's handling of the economy coming under fire as a recession looks unavoidable.
As demand for exports dries up, the government is trying to support the domestic economy by offering the low-paid a 2,000 baht ($56) cheque to supplement their income.
"We don't want people to panic because it will add to our economic woes. If you want to help the economy, eat and use Thai products and travel in the country," Abhisit told a group of workers at City Hall not far from the anti-government rally.
The cash scheme is worth about 19 billion baht and will help over 9 million low-income Thais, the government said.
Economists said it would help, in the short term at least.
"Pumping money into short-term projects to support spending in the first and second quarters is a good thing. I think it will ease the pain and will have some quick impact," economist Carl Rajoo at Forecast in Singapore said.
Such arguments made little impression on the protesters gathering around Government House, the seat of government in central Bangkok.
The crowd, wearing the red shirts adopted by Thaksin supporters, waved "Abhisit, Get Out" banners and listened to speakers on a makeshift stage hurling abuse at the prime minister and his three-month-old government.
Police stepped up security but they expected no violence.
Government House was occupied for months during occasionally violent protests last year by anti-Thaksin demonstrators that helped undermine a series of governments loyal to the former premier, who was ousted in a military coup in 2006.
"BETTER THAN NOTHING"
Finance Minister Korn Chitikavanij said the cash handouts would help boost gross domestic product by 0.2 percentage points and create about 80,000 jobs in an economy his ministry warned on Wednesday could shrink by as much as 3 percent this year.
Thousands of jobs in the key manufacturing and export sectors are being shed as demand for Thai electronics, auto parts and other goods dries up due to a global economic slowdown.
Like other countries, Thailand has launched a package of stimulus measures, including tax breaks, cash handouts, and cheap utilities and transport, to prop up the economy.
To support its spending, Bangkok is seeking $2 billion in foreign loans and drawing up plans to spend $44 billion, mostly on infrastructure projects, over the next three years.
The government also introduced an intensive job retraining programme, but it will handle only 240,000 of the more than 1 million people expected to lose their jobs this year.
Thailand's jobless rate is expected to jump to 3.8 percent in 2009, representing about 1.4 million people out of work, from 1.4 percent at the end of last year, the Finance Ministry said.
Pimonwan Mahujchariyawong, an economist at Kasikorn Research Centre, said the short-term stimulus measures would do little to help the unemployed find good jobs.
"The training programmes may help temporarily, but we need long-term employment," she said, noting that the infrastructure projects would take time to get off the ground.
But for Thayee Moklek, a 2,000-baht cheque is better than nothing.
"I've lost my factory job since my pregnancy a year ago. Now, no one wants to hire me," said the 23-year-old who earns 70 baht a day doing odd jobs.
"I want the government to help us more. I would use the money to buy food for my family," she told Reuters, cradling her young baby in her arms. ($1=35.40 Baht) (Additional reporting by Pracha Hariraksapitak and Boontiwa Wichakul; Editing by Alan Raybould)