Saturday, January 12, 2008

Investment in Thailand breaks record despite political uncertainty

Bangkok - Investment applications in Thailand hit a record 644.8 billion baht (19.5 billion dollars) in 2007, up 32 per cent on the previous year, even in the face of great political uncertainty, the Bangkok Post reported Friday.

The Board of Investment also approved - gave tax breaks - to a 744.5 billion baht in investments, almost double the year previously.

The board's secretary-general, Satit Chanjavanakul, said that investors clearly feel comfortable with the forward momentum of the Thai economy even as politics goes through a period of turmoil unusual even by Thai standards, according to the report.

Foreign investors' applications climbed 63 per cent to 502.73 billion baht. The outgoing caretaker administration and its military sponsors have ruffled foreign investors by flirting with tougher anti-foreigner regulations, as well as being widely perceived as being generally poor at boosting the economy. The political future remains uncertain even though the military claims it will respect the outcome of a December 23 election that will likely produce a coalition government dominated by a proxy party for the controversial former prime minister Thaksin Shinawatra, who was ousted by a coup in September 2006.

Thaksin's People Power Party has accused the Election Commission of bowing to military pressure by ejecting some of its winning candidates for electoral fraud so as to weaken its ability to put together a coalition with minor parties. The top foreign investors in Thailand were Japanese with applications totalling 149.07 billion baht, up from 110.47 billion baht in 2006. US and European investors were second and third, at 85.75 billion baht and 75.93 billion baht respectively. German investors showed the highest growth, from 1.28 billion baht in 2006 to 37.08 billion baht last year. Korean and Chinese investments also jumped 121 per cent and 38 per cent to 11.56 billion baht and 17.17 billion baht respectively.

Favourite investment projects were in the service sector, followed by automobile, parts manufacturing, chemicals and plastic operations. Satit said that a further positive sign was the interest of developers in creating new industrial estates. No new industrial estates have been built in Thailand since the 1997 financial crisis.

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