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NEWS UPDATES Asean Affairs         5  July 2011

Indonesians see Thai stability as investment threat

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Indonesian business leaders on Monday hailed Thailand’s smooth election but warned that stability in the country may make it more attractive for investors who might otherwise have targeted the archipelago.

Chairman of the Indonesian business association (Apindo) Sofyan Wanandi said the weekend’s victory by the Puea Thai party should improve stability in the Association of Southeast Asian Nations (Asean) bloc.

“Most important is the political stability in Thailand, so that it can support Asean’s economy,” Sofyan said.

Analysts said the victory by Yingluck Shinawatra, the younger sister of former Prime Minister Thaksin Shinawatra, was influenced by the ousted premier. Her party campaigned on the slogan “Thaksin thinks, Puea Thai does.”

The party made a range of promises during its campaign, including wage increases, infrastructure spending and computers for school children. These populist measures will cost billions of dollars, but may act to stimulate Southeast Asia’s second-largest economy.

Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), Suryo Bambang Sulisto, said new 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.”

Apindo’s Sofyan said a Thai economic comeback would pose a great challenge for Indonesia in its push to become the darling of foreign investors. “Thailand is Indonesia’s competitor in the business climate. Currently, our position is higher than Thailand, but that is because of political stability,” Sofyan said.

Both Sofyan and Bambang said that Indonesia should improve its infrastructure to win the hearts of foreign investors. “If Thailand is in a stable condition, investors might invest in Thailand because they have better infrastructure,” Sofyan said.

Thailand, against whom Indonesia is competing to become the base for automotive production in Southeast Asia, has retained its investors despite political instability.

“Now, with the improving investment climate, I bet we are going to see tougher competition from them,’’ Bambang said.


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This year in Thailand-what next?

AseanAffairs   04 January 2011
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It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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