But in a handwritten note on the margin of the decree, His Majesty pointedly stressed that a free and fair election was a prerequisite for a peaceful end to the turmoil. That means setting the date for the election is only the beginning of the process through which our seriously flawed democracy must correct itself.

A daunting task, but one that Thailand cannot afford to fail at.

The long-drawn-out crisis, which centres on questions of Thaksin's legitimacy as a democratic leader, has split society right down the middle, pitting the urban middle class against the rural masses.

On the one hand, the politically powerful middle class is disgusted with the culture of deceit and corruption exploited by an autocratic Thaksin to undermine the Kingdom's democracy and enrich himself and his cronies ever since coming to power five and a half years ago. On the other, the rural majority remain enamoured of Thaksin's populist policies that pander to their unprincipled wants and needs.

Let's not forget that Thaksin and his Thai Rak Thai Party have expertly manipulated our corruption-prone system of patronage, a key feature of our society, first to gain political power in 2001 and then to undermine checks and balances on the government, enabling them to pursue selfish interests virtually unchallenged.

Thai society for years tolerated a virtually unbroken string of corruption scandals under Thaksin's watch, until the lucrative business deal between the prime minister's family and Singapore's Temasek Holdings in January exposed beyond a doubt Thaksin's profound lack of scruples, self-serving tendencies and flagrant conflicts of interest.

The big question now is exactly how society can disentangle itself from Thaksin's and his party's tentacles, which remain quite strong. What are we to do with the most powerful democratic institutions, such as the Election Commission (EC) and perhaps the Constitution Court, which Thaksin may be able to continue to manipulate in the upcoming elections and perhaps beyond?

In May the Constitution Court gave the EC a slap in the face by ordering a new poll to be organised after nullifying the April 2 election. The court said irregularities in setting the election date and lack of voter privacy rendered the election unconstitutional.

Surely the three remaining election commissioners, who are infamous for their incompetence and their servile attitude towards Thaksin, can no longer be trusted to organise a free and fair poll.

Next Tuesday the Criminal Court is expected to rule on whether the three commissioners are guilty of malfeasance in connection with the April 2 election.

Also potentially explosive is the issue of electoral-fraud charges against the Thai Rak Thai and opposition Democrat parties being considered by the Constitution Court. If found guilty, the two biggest parties could face a maximum penalty of dissolution.

Be that as it may, the easing of political tensions has given Thailand's economy a much-needed reprieve. Already hard hit by serious external factors like high oil prices, it has been further weakened by investors' confidence being sapped by the political uncertainty. Yet fears of a long delay in the disbursement of the government's fiscal-2007 budget, which is considered crucial to stabilising the slowing growth during this time of dwindling private-sector and consumer spending, are unlikely to materialise now that a new election is actually scheduled.

With the most pressing political and economic problems taken care of for the time being, Thailand must now overcome one obstacle at a time and put itself back on the road to recovery as both a democratic society and a competitive economy.