Sunday, February 14, 2010

Thailand business fear house dissolution, civil war or coup

A House dissolution, civil war and a coup top the list of investment risks facing businesses ahead of the February 26 landmark verdict on the Bt76-billion assets foreclosure trial.

Former premier Thaksin Shinawatra may be guilty or not. His family's enormous fortune may be forfeited entirely or partially or the whole amount returned.

All these are among the possible scenarios that are prompting virtually all businessmen in this country - Thais or expatriates - to keep their finger crossed.

Many wish the political situation before and after February 26 will not be as bad as the brief street riots last April or the November 2008 airport closures.

Most importantly, they hope there will be neither a civil war among those with divergent political ideologies nor a coup that suspends the country's democratic governance system once again.

These perspectives were shared during last Thursday's roundtable discussion on Thailand's economic recovery versus its political crisis with a focus on the February 26 court verdict - jointly organised by The Nation and Krungthep Turakij.

When the yellow-shirted protestors shut down Bangkok's Suvarnabhumi Airport and Don Muang Airport back in late November 2008 to pressure then Prime Minister Somchai Wongsawat into tendering his resignation, visitor arrivals plunged 23 per cent the following month, just when the tourism industry was entering its high season.

Then came April 2009 when the red-shirted protesters went on a rampage on Bangkok's streets in a bid to oust Prime Minister Abhisit Vejjajiva. The tourism industry took another major hit, marked by a 22-per-cent fall in visitor arrivals.

Many businessmen now like to joke that Thai politics has become so "colourful" over the past several years, just like the colour-coded teams on the traditional college Sports Day.

In the end, they hope the players, red- or yellow-shirted, will respect the judges' verdict so that the country may return to normalcy.

Given the protracted political rifts, Thailand has missed chances to focus on the longer-term strategy of national development, especially with the enforcement of the crucial Asean Economic Community coming up in 2015.

One roundtable panellist said he's really sorry for the sad state of political affairs here, suggesting that more and more businessmen and investors are losing patience and growing increasingly hopeless. Another participant warned that the possible bankruptcy of several European governments, which are now sinking under huge fiscal deficits, might stall the global economic recovery, which is still fragile.

The US economic recovery is still not creating jobs, while Japan remains mired in deflation after two decades of low growth. And China's economic bubbles are increasingly worrisome.

All these factors could trip up Thailand's exports and GDP growth this year.

If the domestic political situation is not stabilised anytime soon, Thailand could be heading for another round of economic troubles.

To protect against uncertain times, a panellist suggested holding onto cash and bullion while selling off stocks and bonds.

Such pessimism also prevails because Thailand is passing through a significant political transition but lacks an effective mechanism to resolve conflicts.

A society cannot solve its problems with street politics. Yet, the parliamentary system also appears to be losing its effectiveness as far as elections are concerned.

One panellist said the flow of funds behind street politics should be cut off by authorities so that we could expect to see an end to the current protests.

An army without logistics and funding will quickly become feeble.

For many optimists, the darkest hour may come on February 26 when the Supreme Court hands down its historic verdict on the assets seizure case.

After that, Thailand should be able to come to terms with any of the outcomes. Political stability should gradually return. Or is that just wishful thinking.


Anonymous said...

Im sure there is a zionist poking his head can I steal Thai money and blame the muslims?

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