Sunday, September 2, 2007

Sadao emerging as safe and prosperous haven in Thailand's south

INVESTMENT / IMPACT OF SOUTHERN UNREST

PHUSADEE ARUNMAS


Thawee Piyapatana, who runs a seafood plant in Songkhla, says people might be surprised to hear that the industry is facing a labour shortage.

Sadao district, a small town in Songkhla province on the Thailand-Malaysia border, has emerged as a bustling business centre, as unabated bombings in the three restive southernmost provinces and security worries in Hat Yai have prompted investors to shift into the area.

Hotel and entertainment businesses have been booming in Sadao over the last three years, with combined investment capital exceeding 10 billion baht, according to Thawee Piyapatana, chairman of the provincial chapter of the Federation of Thai Industries.

Four new hotels with combined capacity of about 500-600 rooms are also being constructed.

Hat Yai, long considered the business hub of the South and also popular with tourists, has been relatively sluggish ever since bombing incidents began to spread beyond the three troubled border provinces.

The situation would not likely return to normal as long as the border provinces remain unstable, Mr Thawee predicted. Tourists from Malaysia have tended to stop off in Hat Yai before going on to Trang province, which is home to many more attractive tourism spots.

Other southern provinces, particularly Nakhon Si Thammarat and Surat Thani, are experiencing substantial growth, as former residents of the three troubled provinces have been relocating.

However, the now-ebbing Jatukarm Ramathep amulet fever also played a key part in the growing economy in Nakhon Si Thammarat, while Surat Thani is benefiting from the presence of new alternative energy ventures and power plants to drive growth.

According to Mr Thawee, while industrial factories in the South such as the frozen seafood, and rubber-based furniture have been hard hit by strong baht, there are no signs of layoffs yet.

In fact, he said, the Southern factories were facing a labour shortage of about 20,000 to 30,000 people, particularly manual workers.

Somjit Anuntamek, deputy secretary-general of the Thai Chamber of Commerce and president of the Southern Economic Development Committee, said the economy of the South was expected to drop this year because of lower farmers' income, as the prices of major agricultural products and indigenous fruits such as rambutan, mangosteen, and longong had fallen sharply.

The purchasing power of Southerners, be it for new cars, motorcycles or houses, has declined accordingly.

New investments in the South are also expected to be fairly small because of unrest in the three southernmost provinces.

The southern economy contributed about 9.9% of the country's gross domestic product worth of 7.78 trillion baht last year.

GDP growth in the South was 4.3% in 2006.

''I personally see the government's special economic zone which covers Yala, Pattani, Songkhla, Narathiwat and Satun province will magnify the problem,'' said Mr Somjit. ''The government would be better off limiting the area to only the three provinces and solve the problem more seriously within a limited area.'

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