Nicaragua has issued Thaksin Shinawatra, the exiled Thai prime minister, a passport naming him an "ambassador on a special mission", saying he can help bring in investment.
The government in a statement said the former Thai leader received the passport in February after a meeting with Daniel Ortega, the Nicaraguan president.
Ortega appointed Thaksin to the post to help attract investment to the impoverished Central American nation, said the government in a press release in the capital, Managua, on Wednesday.
Nicaragua's announcement came a day after Thai authorities cancelled Thaksin's personal passport for undermining national security from outside the country.
"According to the law, the government has the right to revoke a passport of a person who damages the country and the Pattaya incident has shown that Mr Thaksin is trying to damage our country," Panitan Wattanayagorn, a foreign ministry spokesman, said.
The Thai government has accused Thaksin of stoking anti-government protests by supporters which forced the cancellation of a regional summit last weekend.
The demonstrations resulted in violent clashes early this week between the so-called Red Shirts and security forces, leaving two people dead and more than 120 injured.
On Thursday, Thaksin urged the protesters to remain peaceful and echoed the calls of Abhisit Vejjajiva, Thailand's current prime minister, for reconciliation.
"War will never end by war, it has to end by negotiation," he said in Dubai.
"If the government wants to reconcile, I will encourage the Red Shirts to participate."
Thaksin, stripped of his diplomatic passport in December, has lived in self-imposed exile to avoid a two-year jail sentence on corruption and abuse of power charges.
The former prime minister also encouraged King Bhumibol Adulyadej to help resolve the crisis.
"I humbly urge his majesty to intervene ... that's the only solution," Thaksin told The Associated Press news agency.
Bangkok is still under a state of emergency despite the protesters dispersing on Tuesday after besieging Government House for several weeks in an atttempt to force out Abhisit and push for new elections.
Thai courts have issued arrest warrants for Thaksin and 13 leaders of the United Front for Democracy against Dictatorship for violating state of emergency regulations.
At least three were already in custody.
Loss of revenue
Analysts meanwhile said the latest turmoil may have inflicted huge losses in tourism revenue, weighed down the stock market and hurt growth in an economy already battered by the global slump.
But Thai stocks fell about one per cent as the market re-opened on Thursday after a three-day extended holiday in conjunction with the Songkran new year festival.
The drop was smaller than some had feared earlier in the week, when the unrest ended in violent clashes between thousands of protesters and security forces in major parts of the capital.
Tourism-related sectors were among the hardest hit, and there are concerns that the protests in Bangkok and the resort town of Pattaya may deter foreigners from visiting the country.