THAILAND: POLITICAL TURMOIL PUTS OFF TOURISTS AND INVESTORS
Analysts predict sliding stock prices and cancellations of tourist bookings will only worsen as anti-government protests and a state of emergency in Bangkok continue. “The current political problems will later cripple the country’s economic growth”, warned Kavee Chukitkasemm, assistant managing director at Kasikorn Securities. Thailand’s stock market is down more than 26 percent since anti-government protests first broke out in late May. The central bank has intervened in the foreign exchange market to shore up the bath on September 2 as emergency rule was declared across the capital. But the currency still fell to a 13-month low of 34.50-52 against the dollar that day. The current crisis began on August 26, when protesters stormed into the main government complex to demand the resignation of Prime Minister Samak Sundaravej. Thousands of demonstrators remain camped there last week and no action had been taken to evict them, though Samak firmly refused to step down. On September 2 the crisis worsened when protestors clashed with Samak supporters, leaving one man dead and dozens injured. A state of emergency was then declared across the capital. Tourism, which accounts for more than six percent of the economy, has been particularly vulnerable to the unrest. Foreign tourists were predicted to bring in about 600 billion baht (17.4 billion dollars) this year, according to the Tourism Authority of Thailand. But since the state of emergency was declared, the number of foreign arrivals had as of last week dropped 30 percent below average at Bangkok’s international airport, through which 8,000-10,000 visitors usually arrive through Suvarnabhumi airport each day. “The political turmoil has badly affected the travel and tourism business in Thailand”, said Apichart Sankary, president of the Association of Thai Travel Agents, adding that the fall in numbers was already costing Thailand 400 million baht (11.7 million dollars) a day in lost revenue. At least 13 countries had issued warnings concerning travel to Thailand. Prakit Chinamourphong, president of the Thai Hotel Association, said hotel cancellations had jumped since the announcement, adding that as high-season approached in October, hotels would face a critical test. With no solution to the crisis in sight, real estate is beginning to also feel the effects, said Somchao Tanterdtham, president of the Thai Real Estate Association. “Real estate operators have been more cautious for the past few months and delayed new projects, mostly owing to a slowdown in the global economy and high oil prices. But the political turmoil is now adding to our problems”, Somchao indicated. Samak said he would consider lifting the state of emergency -- but not because it has successfully dispersed the crowds baying for his departure. The emergency rule has simply been ignored by the army which it tasked to take charge, Samak said, leaving the protestors in place and raising the specter of prolonged financial woes.