Protesters in Bangkok wrapped the Cabinet headquarters in a 1.4-kilometre Thai flag, as business associations gathered for political reform talks.

Protesters of the Network of Students and People for Reform of Thailand wound the outsize red-white-and-blue flag around the perimeter fence of the Government House compound in symbolic defiance of the 1,000 soldiers and police guarding the premises.

Elsewhere in the capital, leading business associations kicked off a forum on political reform — one of the protesters’ demands — in a sign that the country’s month-long crisis may have entered into a phase of negotiations.

“As long as we continue to talk, there is hope that we can avoid violence,” said Chaiwat Satta-anand, the moderator of the forum.

The meeting gathered leaders of associations representing banking, trade, industry, tourism, listed companies, the stock exchange and an anti-corruption organization.

The move was a departure for the country, where the private sector traditionally steers clear of explicitly engaging in politics.

But Vichai Assarasakorn, vice-chairman of the Board of Trade, said “the country has stopped and cannot go forward.” “We need a neutral body like this forum to help find a way out,” he said.

Thailand’s economic growth was expected to shrink to less than 3 per cent this year, and could fall to 0.5 per cent in 2014 in a “worst case scenario” of political instability, according to a projection by the Kasikorn Research Centre.

The seven associations on Thursday met with protest leader Suthep Thaungsuban, leader of the People’s Democratic Reform Committee that has been staging anti-government protests in the capital since November 24.

On Monday, Mr. Suthep led an estimated 150,000 people on Government House, the seat of the administration, forcing Prime Minister Yingluck Shinawatra to dissolve parliament and call a snap election on February 2.

Mr. Suthep on Friday reiterated that the House dissolution was not enough.

He wants Ms. Yingluck to step down and allow an appointed Prime Minister to set up a People’s Council that would legislate political reforms prior to the next polls.

His proposed reforms would include harsher penalties on vote buying and political corruption.

Mr. Suthep’s proposals have been met with a mix of derision and fears that he is seeking a military coup, of which Thailand has seen 18 since 1932.

“Everyone wants the reform process to take place in accordance with the democratic system,” Mr. Vichai said, who said the business forum was intended as a neutral body to make reform proposals to both the People’s Democratic Reform Committee and the caretaker government.

“We are working on a short-term reform proposal that could be put in place before the election, and long-term reforms for a new social contract for after the election,” said Chaiwat, a university professor.

Friday’s business sector forum was the first of several planned meetings.

On Saturday, Mr. Suthep was to meet with General Tanasak Patimapragorn, the supreme commander of the military, to discuss his reform agenda.

On Sunday, the government has invited 100 people from the public and private sectors to join a “political reform forum.” Mr. Suthep has agreed to send three representatives to the government forum.

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