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Members of the Thai army take part in Thailand's National Armed Forces Day at the Thai Army 11th Infantry Regiment in Bangkok, Thailand, January 18, 2016. REUTERS/Chaiwat Subprasom/File Photo

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By Amy Sawitta Lefevre

KHON KAEN, Thailand (Reuters) - In northeast Thailand, once a hotbed of opposition to Thailand's junta, troops patrol university campuses in Humvees and hold "attitude adjustment sessions" at military camps for those who don't toe the line.

Two years after a military coup, the constrained opposition is struggling to mount a campaign against an Aug. 7 referendum on a junta-backed draft constitution, its first test of popularity since the May 2014 coup.

The junta has imposed restrictions on even debating the draft constitution, which critics say could enshrine military power for years to come.

"The soldiers have successfully built fear here," said Jatupat Boonpattararaksa, a law student at Khon Kaen University in the northeast and member of Dao Din, an anti-coup group.

"Referendum or no referendum, they've won."

Jatupat and 13 others were detained for nearly two weeks last year after demonstrating against the military government. The group now limits its activities to composing anti-junta songs, he said.

The military has overseen the drafting of a constitution to replace one it discarded after seizing power. Critics, including major political parties, say it will enshrine the military's influence and is unlikely to end political strife. The charter would have an appointed upper house Senate, with a portion of the seats reserved for the military and police.

The junta has said this clause is necessary to oversee a five-year "transitional period" before full civilian rule is restored.

SUPPRESSING 'RED SHIRTS'

The military has kept Isaan in the northeast under tight control since seizing power. Thailand's largest region is a stronghold of "red shirt" supporters of former Prime Minister Thaksin Shinawatra.

Thaksin and his allies have commanded the ballot boxes this century, helping to elect a series of populist governments that chafed against institutions aligned with the royalist elite: the military, the bureaucracy, the middle class.

Thaksin, ousted by the army in 2006, remains hugely popular among the poor and rising middle-class farmers and labourers in the northeast. While in power, he poured money into developing the region and paid generous subsidies to farmers.

But critics accused him of enriching himself at the expense of the state. He remains in self-imposed exile to avoid corruption charges in Thailand.

His sister Yingluck was removed from office in May 2014, days before the coup that overthrew the remnants of her government.

She is on trial on corruption charges stemming from a state rice subsidy scheme. Yingluck, who denies wrongdoing, faces up to a decade in jail if found guilty.

Authorities have also moved swiftly to quell anti-junta and anti-constitution protests in recent weeks in Bangkok. In March, the junta gave soldiers expanded powers of arrest and detention, which allows the military to seize assets, search premises and arrest and interrogate civilians.

Following the decree, the U.S. State Department urged the government to limit the role of the military in internal policing. The United States has scaled back its deep ties with Thailand since the coup, amid uncertainty about when it will return to civilian rule.

Critics say the crackdown on free expression sows doubts about the military's intention to hold a free vote on the August referendum followed by national elections next year.

Junta spokesman Colonel Winthai Suvaree denies that. "People can discuss so long as they do so in an inoffensive manner," he said.

POLITICAL INSTABILITY

Continued political instability is damaging Thailand's economic potential, even as international competition intensifies with the rapid development of Vietnam

and Myanmar's democratic reforms, Standard & Poor's said in a report this week.

"The current Thai government is pushing to adopt a new constitution that critics said would lead to unstable elected governments and weaken democracy," said S&P Global Ratings

analyst Kim Eng Tan.

Southeast Asia's second-largest economy has struggled since the military took power, with weak exports and consumption hurting growth. Exacerbating matters, nearly half of the country's provinces are suffering from drought.

"A further slowdown in Thailand's economic growth trajectory could erode its sovereign credit metrics over the next few years even without a possible violent confrontation in the country," Tan said.

A potential royal succession is also complicating the political climate. King Bhumibol Adulyadej has been on the throne for 70 years, but he is 88 and in failing health.

Bhumibol's succession has prompted worries about instability in a country that has witnessed 19 coups or attempted ones and at least 19 constitutions since a constitutional monarchy replaced an absolute one in 1932.

The junta has launched an unprecedented crackdown on anything construed as criticism of the monarchy. The authorities have brought at least 59 lese majeste cases since the May 2014 coup, according to a Human Rights Watch report on Wednesday.

RE-EDUCATION CAMPS

The red flags which used to flutter along roads and outside homes of villages throughout Isaan, were nowhere to be seen on a recent drive through the region.

Soldiers removed the red shirt movement flags after the coup and villagers took down others to avoid getting a summons from the military, like those received by hundreds of opposition leaders, critics and academics.

Those summoned to what the junta calls "attitude adjustment sessions" are usually released once they sign documents promising not to repeat their transgressions.

Last month, the junta said it would go beyond attitude adjustment to create "re-education camps" for repeat offenders, including those who demonstrate or protest publicly.

The opposition has had little visible leadership since the coup, making it hard to oppose the referendum, said red shirt supporters in Khon Kaen.

The United Front for Democracy against Dictatorship (UDD), as the red shirt group is formally known, says it is limited in what it can do.

"What we can try to do is go on television shows to call for a free and fair referendum and put messages on T-shirts and, of course, vote against the constitution in August," said UDD spokesman Thanawut Wichaidit speaking to Reuters in Bangkok.

The junta is preparing to send military cadets to towns and villages throughout the country to discuss the referendum. The government denies that this step breaks campaigning rules.

Achana Chiutasaen, 51, a Khon Kaen farmer and red shirt supporter, compared the silence of the opposition to the drought affecting parts of Thailand, saying sooner or later it would end.

"We are seeds underground now waiting for the rain, and when it comes the seeds will grow."

(Additional reporting by Panarat Thepgumpanat and Andrew R.C. Marshall; Editing by Simon Webb and Bill Tarrant)

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