Some Thai businessmen have finally broken their silence and called for Prime Minister Thaksin Shinawatra's resignation to end the prolonged political crisis which is on the verge of damaging the Thai economy.

Although the three most influential business groups - the Board of Trade, the Thai Bankers' Association and the Federation of Thai Industries - have yet to take a political stand, some members of the associations have gone out of their way to suggest that Thaksin take a leave from politics. Otherwise, they said, the Thai economy might run into another crisis due to eroding consumer confidence and a lack of new investment.

Santi Vilassakanont, vice president of the Federation of Thai Industries, said yesterday morning during an interview with a business programme on Channel 9 that Thaksin should temporarily stand down to solve the current political impasse. He added that the April 2 election would not be an answer if the opposition parties still insisted on their boycott of the poll.

He said small and medium sized business operators would be affected if the crisis continued because they could not make advance business plans amid such uncertainty.

At a yesterday's Economic Reporters Association's seminar, Vikrom Kromadit, vice chairman of the Thai-China Business Council, said the country's investment rating would be suffer if Thaksin clings to power.

He urged Thaksin to exit from politics to pave the way for reform.

"Khun Thaksin may continue his political role from behind the scenes for the Thai Rak Thai Party in a similar fashion to Lee Kuan Yew, senior minister of Singapore."

He added that foreign investors had been reluctant to come to Thailand due to political uncertainty, citing the recent Intel decision to invest US$300 million (Bt11.7 billion) in Vietnam instead of Thailand. Moreover, a number of Singaporean firms have delayed their decisions to set up factories in his industrial estate.

"They were so close to coming here but the political turmoil has scared them away," he added.

Poomson Rojlertjanya, president of the Thai Contractors Association, agreed that the April 2 election would not end the political crisis. He urged Thaksin's close aides to dare ask Thaksin to leave politics before the situation gets out of control.

"As head of the administration, Thaksin cannot avoid responsibility if something happens," he added.

Somchai Jitsuchon, research director of macroeconomic development at the Thailand Development Research Institute, said at the same seminar that the anti-Thaksin protest would become fiercer if Thaksin returns to power after the April 2 election.

Lost opportunities for the country would increase if pro-democracy protesters don't accept the legitimacy of the new government after the election, said Somchai. He added that even if Thaksin was re-elected, he would be unlikely to realise a number of his promises, such as mega-projects and free trade agreements, because he will face growing opposition to whatever he does.

Ratch Osathanugrah, executive chairman of the Osotspa Group of Companies, said that the current situation had forced foreign investors to delay investment in the country.

"If the situation continues, the economy will face a lack of cash flow" he said. "In the end, consumers will have less money to spend. This will have a domino effect on the whole economy."

While several groups of people, even doctors, students and pharmacists, have come out to make a statement on politics, the three business associations have so far decided not to issue any political comment.

Prasarn Trairatvorakul, president of Kasikornbank, said the association members hadn't issued a statement because they were divided in their views on the issue.

However, pressure on the business sector to speak out is growing.

Members of The Federation of Thai Industries (FTI) convened a special meeting yesterday to assess the economic impact of the political crisis. Vice president Kiatpong Noichaiboon said that the FTI feared that international rating agencies might soon downgrade the country's investment rating if the political conflict continued.

"If that's the case, it will take at least six to twelve months to restore our image. This is a waste of opportunity," he said.

An FTI survey showed that four industries had already been affected by declining consumer confidence because of the political crisis: printing and packaging, alternative energy, furniture and handicrafts. Moreover, Thailand's aspiration to become the hub for international conferences will not be realised if the crisis continues past April, he said.

Kriengkrai Thiranukul, chairman of the FTI printing and packaging group, said the uncertainty would affect Thailand's aspiration to replace Singapore as a regional printing hub.

"Overall, the industry is likely to grow by only 7.5 per cent from the original forecast of 15 per cent," he said.

While refusing to suggest that Thaksin should resign, Pramon Sutheewong, chairman of the Board of Trade said, "Investors are less confident of making new investments, and consumer confidence has plunged continuously because people are worried about political changes because Thaksin dissolved the Parliament. The situation now has created a lot of uncertainties."

Board of Trade executive director Pornpinit Pornpraphan said the political conflict had severely damaged the Thai economy but he noted that the BoT had yet to issue a political statement, pending agreement among its members.

Boonpentg Santiwattanatham, a FTI member in the food sector, said that the impact might affect export orders for the next six months.

"If the country is in turmoil, our trading partners will not want to do business with us," he said.

Tisco Securities released an analysis predicting that political instability is likely to dampen economic expansion, and that it had cut its 2006 growth forecast to 4.7 per cent.

"With Prime Minister Thaksin refusing to step down and public rallies calling for his resignation growing more heated in Bangkok, the outcome of this drama is still far from certain," the bank reported. "We expect the economy to be negatively affected by this prolonged period of political uncertainty with a slowdown in investment spending and private consumption. Consequently, we have revised downward our 2006 GDP forecast to 4.7 per cent from 5 per cent previously."

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