The Thai army launched its biggest offensive Wednesday morning -- using armored vehicles to smash barricades and troops to storm occupied territory -- to take control of the anti-government protesters' stronghold in Bangkok's Lumpini Park, where demonstrators have camped for weeks. At least four people were reported killed as a result of the offensive and several more injured as the Thai army sought to crack down on the protesters, which has seriously paralyzed parts of Bangkok.
A handful of leaders of the Red Shirt anti-government protesters are in police custody, and have urged other demonstrators to go home. But despite calls from Red Shirt protest leaders to call off their rally -- and an announcement that "core leaders" of the protesters would turn themselves into the police -- thousands of demonstrators remain in the park and angry mobs have set fire to parts of Bangkok. The nation's stock exchange, a popular movie house, and shopping malls are burning in flames. View a photo slideshow of Thailand on fire
The Thai government said it has the situation under control, and that troops would continue to root out remaining protesters from Lumpini Park. In a statement, the prime minister's office urged core leaders to surrender.
Red Shirt protesters support former Prime Minister Thaksin Shinawatra, who was ousted in a 2006 military coup. They argue that the ruling Thai government came to power illegitimately, and want parliament to dissolve and a new election to be held. Since demonstrators launched their campaign for new elections in March, more than 60 people have died.
Perspective from Thailand
Freelance reporter Ramy Inocencio is in Bangkok. He says that a lot of protesters and rioters are going after symbols of money.
Ramy Inocencio: "[Rioters] are targeting symbols of money and power. Basically, just in the past few hours, groups of registered protesters have been attacking the channel 3 news station and setting that ablaze. They've also attacked some of the main shopping centers in the central business district -- notably the Central World Plaza."
Inocencio says the violence is having a big impact on day-to-day life in Bangkok, but it depends on where you are.
Inocencio: "If you're in the central business district, where all the encampments have been, it's a war zone. But if you go about 15 minutes away to some of the outer neighborhoods, it's almost as if nothing's happening. But the biggest thing affected by all this pretty much is tourism. People are scared to come to Bangkok, and with good reason especially after today. With most of the major news station covering the government trying to break through the barricades, and successfully doing so. That is the face that foreigners and locals, of course, are seeing as Thailand right now. And it's going to be very difficult for them to recover form this.
How is the violence impacting the Thai economy?
The value of Thailand's currency, the baht, is steadily dropping. Today, the baht recovered most of its earlier losses, though its bond risk rose as protest leaders urged demonstrators to leave their camp stronghold. Officials from at least one neighboring country, Indonesia, are worried that the violence could lead to a repeat of the 1997 Asian financial crisis -- which began in Thailand with the collapse of the Thai baht.
But Morris Goldstein, a fellow at the Peterson Institute of International Economics, says today's situation is nothing like 1997.
"At that time, Thailand really acted as a wake-up call for investors to reappraise the situation in all of emerging Asia," says Goldstein. "When they did that, they saw there were a lot of countries with extensive banking and financial sector problems."
Goldstein says Europe's debt crisis is overshadowing the unrest in Thailand, but the Thai protests won't affect the rest of Asia because better banking standards were implemented after the 1997 crisis.
How is the violence affecting tourism?
Thailand, known to tourists as the "land of smiles," has seen its tourism tumble as several nations -- including the U.S. -- have issued travel warnings to the Asian nation. Arrivals at Bangkok's international airport are down by a third. The city's hotel occupancy rate hovers around 20-30 percent. Vacation and travel business has fallen severely throughout the country.
The Tourism Authority of Thailand has issued its own advisory: "Visitors and tourists are advised to be vigilant, follow news developments, exercise extra caution and avoid areas covered by the declaration of a severe emergency situation."
Tourism accounts for 6-7 percent of Thailand's economy. About 2 million people work in tourism in Thailand. The Thailand National Statistical Office says 20 percent of employment in the nation is directly or indirectly linked to tourism.