ASEAN KEY DESTINATIONS
Asean business looks at post-election ThailandBy David Swartzemtruber
Judging from that scenario, it would appear that Thailand could boast of a stable political climate ruled basically by one party. However, every party with Mr. Thaksin at the helm or those parties he backed have had a short lifespan.
Pheu Thai swept into office by offering Thai voters many promises. Perhaps the two most outstanding were a 300 baht (US$10) per day minimum wage for certain parts of the country and supports for the price of rice.
These policies are double-edged. The minimum wage boost would shore up the domestic economy of Thailand but would raise the cost of productions for goods produced in Thailand. An increase in the cost of rice could make Thai rice uncompetitive on the world market. Thailand is the world’s largest rice exporter.
Singapore companies are also concerned about Thailand’s telecom sector. SingTel’s associate is Advanced Information Services , which is one of three Thai telecoms facing a potential fine of more than US$2 billion over a complaint they had benefitted from concessions through the abuse of power by former prime minister Thaksin Shinawatra. The complaint was filed by state-owned TOT Plc.
Another Singapore concern is that Tiger Airways' proposed joint venture with Thai Air to set up a low-cost carrier is still waiting approval from the Transport Ministry.
Meanwhile, Indonesia perceives that a more stable political scene in Thailand will make it more competitive for foreign investment.
Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), Suryo Bambang Sulisto, said increased confidence in Thailand’s political stability may woo foreign investors. “Now, it is certain the investment climate will improve over there,” Bambang said.
“The previous prime minister, Thaksin, has a record of taking an investor-friendly approach. It is good for the stability of the region, but that is a clear signal for Indonesia to start dressing up and preparing to compete with Thailand to attract foreign investors.”
The major destabilizing factor in Thai politics is the issue of amnesty to former prime minister Thaksin Shinawatra. He faces a two-year prison sentence for conviction on graft and corruption charges. It should also be noted that the wealth of his family increased five times following his five years serving as prime minister, news media report.
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), comprising the Thai Chamber of Commerce, the Federation of Thai Industries and the Thai Bankers' Association, issued a statement yesterday on the issue.
Chairman Dusit Nontanakorn said the amnesty would put the country into deep conflict. It would jeopardise Thailand at a time when many economic problems have not been solved and the country needs its competitiveness strengthened.
"We hope that the new government will not create a new problem for the nation by proposing the amnesty agenda. It has a drawback. The government cannot create reconciliation if the conflict still exists, or is accelerated. So, Khun Yingluck would be wise not to do that," he said.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below