The hospitalization of King Bhumibol Adulyadej has brought Thailand’s most daunting question to the fore. The country’s wrenching political struggle over the past several years has, at bottom, concerned what will happen after the ailing 81-year-old king’s reign, now at 63 years, comes to an end.

Thailand’s endgame is being shaped by several key events: the military coup of September 2006, the current military-supported Constitution and election in 2007, street protests and seizures of Government House and Bangkok’s airports in 2008, the army-brokered coalition government of Prime Minister Abhisit Vejjajiva that has ruled since January this year, and the Bangkok riots in April. At stake is the soul of an emerging Thailand, with far-reaching ramifications for developing democracies elsewhere as well as the broader international community.

Thailand’s color-coated crisis pits largely urban, conservative, and royalist “yellow” shirts against the predominantly rural “red” columns of former Prime Minister Thaksin Shinawatra. For much of Thailand’s long economic boom of the past two decades, wealth resided mostly in the Bangkok metropolitan area, a boon to the burgeoning urban middle class, but deeply resented by the rural majority.

While the rural population had more than enough to eat, their economic opportunities and upward mobility were limited by a shoddy education system and docile state-run media that fed them soap operas and official messages. For a nobody to become a somebody, all roads led to Bangkok and its prestigious prep schools and universities. Thailand’s farms became increasingly alienated from the urban elite. Thaksin recognized this urban-rural divide and shrewdly exploited it, upending the elite consensus that had long prevailed.

That consensus rested on a nexus of the military, the monarchy, and the bureaucracy. Military rule and putsches stemming from factional infighting among generals were the norm until the early 1970’s, when university students overthrew a military dictatorship and opened up democratic space. Parliament, political parties, and politicians then came and went alternately with military coups, which invariably suppressed the maturation of democratic institutions.

The rural-urban divide wedded the grassroots rural population to upcountry patronage networks and vote-buying, while elected politicians reaped their rewards through corruption and graft. In turn, the military stepped in from time to time – once every four years on average since 1932 – ostensibly to suppress corruption, but retarding democratic rule in the process.

All this changed when Thailand promulgated a constitution in 1997 that promoted political transparency and accountability and government stability and effectiveness. Its logical but flawed outcome was the triumph of Thaksin and his once-invincible Thai Rak Thai party, which became the first to complete a full term and be re-elected – by a landslide in 2005.

Thai Rak Thai’s populism featured income redistribution, cheap health care, micro-credit schemes, and a dazzling array of policy innovations that ushered Thailand into 21st-century globalization. The direct connection of Thaksin and his party to the electorate bypassed and threatened the established trinity of institutions that had long called the shots in Thailand.

Thaksin and his cronies handed the establishment an opportunity to strike back by abusing power and profiting personally from it. A billionaire telecommunications tycoon, Thaksin presided over the trebling of his family’s assets in the stock market. He also engineered an extrajudicial drug-suppression campaign that claimed 2,275 lives.

Thaksin’s sins are voluminous, and became the basis of the rise of his yellow-shirted opponents, the People’s Alliance for Democracy (PAD), which entered the electoral arena as the New Politics Party. The PAD spent much of last year demonstrating against the two successive Thaksin-nominated governments that arose from the December 2007 election, reinvigorating Thai Rak Thai’s anti-PAD red-shirted allies, the United Front for Democracy against Dictatorship (UDD).

After more than three years, Thailand’s crisis has become a knotty saga. Abhisit’s pledges of reform and reconciliation in the wake of April’s riots have made little headway. The PAD wants to maintain the 2007 charter. The UDD favors reinstatement of the 1997 constitution. Enraged by a sense of social injustice, the reds rail against the establishment’s double standards, while the pro-establishment yellows have hunkered down for a battle of attrition.

In the process, what had been a pro- and anti-Thaksin fight has gradually become a pro- and anti-monarchy struggle. The rigidly hierarchical forces of the establishment are insecure and fearful of what will happen after the king dies. Lese majeste cases alleging insults against the immediate royal family are on the rise. Many thousands of websites challenging establishment interests and deploring post-coup machinations have been blocked.

Thaksin’s appeal splits the reds. Many repudiate his corruption but, in challenging the post-coup status quo, have no recourse except to use him as a rallying symbol. Likewise, all yellows find Thak­sin’s misrule intolerable, but not all are fanatical royalists. A stalemate has taken hold, with the denouement likely to be reached only after the royal succession.

A new consensus is imperative if Thailand is to regain its footing. That consensus would have to be based on mutual recognition and accommodation. The reds will need to distance themselves from Thaksin’s abuses of power as much as the yellows will have to accept some of Thaksin’s policy legacy, particularly grassroots opportunities for jobs, education, and upward mobility.