The business sector fears that if the current political tension stretches out three more months, many companies could feel the heat, according to a survey conducted by the University of the Thai Chamber of Commerce.

A survey of 600 respondents from different industries was conducted from March 6-20 and found that 80 of them said they would start feeling adverse effects. Results show a concern that no matter how peaceful the anti-Prime Minister Thaksin Shinawatra's movement may be, the economy would certainly be affected, with the impact beginning to be felt four to six months from now.

Respondents were also worried about lower corporate income, because consumers would cut spending, and domestic and foreign investment would wane.

Last week, the Federation of Thai Industries came up with short- and medium-term economic impact assessments. If the political chaos lasts only to April 2, growth could be slashed from 4.5 per cent to 4.2 per cent, representing a GDP loss of Bt11 billion, with consumption falling by Bt7 billion, investment by Bt3 billion and exports by Bt1 billion. The industrial sector would be hardest hit, its value cut by Bt4 billion.

If tensions last until the end of May, medium-term effects could include meagre growth of 3.6 per cent. GDP value would decrease by Bt33 billion, with Bt21 billion lost from decreased consumption, Bt8 billion from lower investment and Bt4 billion from reduced exports. The total value of the industrial sector could drop by Bt13 billion and that of the agricultural sector by Bt3 billion.

The survey found that small and medium-sized enterprises and service businesses would be the first to suffer, followed by manufacturing and agriculture.

Saowanee Thairungroj, dean of economics at the university, said that while most companies would not suffer any immediate negative effects from the present conflict, most business owners were concerned about interest-rate adjustments, rising oil prices and a slowdown in the world economy.

Meanwhile, Chirayudh Vasuratna, chairman of the CV Group and former director of the Thai Chamber of Commerce, said almost every executive was concerned about the ongoing political problems and wanted to know when they would end.

During an interview with The Nation yesterday, he said if investors had an idea of when the situation would return to normal, then they could get on with their business plans. Otherwise, they would be flummoxed as to how to proceed, as they would not know how the crisis would affect them.

Chirayudh said that it was constitutional for the election to be held on April 2. But the new government has a duty to review Article 313 of the Constitution.

He said the government should have a clear time line to show the public how constitutional reform could be introduced. "It's better to have a time line now, because no one knows how this will end," Chirayudh said. "It may not be practical, but I would like most business people and others to share their ideas and ask relevant parties to find the best solution, one that would benefit the country more than it would individuals."

He said that since the beginning of the political crisis, domestic and foreign investors alike had suspended plans to invest in Thailand. They are concerned and want to wait and see how long this will last.

He cited the example of one company in charge of a project for converting waste into electricity that has postponed plans to establish a joint venture with strategic partners from Germany and China.

Singaporean property firms have delayed plans to expand investments here by Bt10 billion.

Petchanet Pratruangkrai,

Somluck Srimalee

The Nation