Somkid Jatusripitak's resignation could further confuse foreign investors and jeopardise the Surayud government's image following its easy defeat by some political groups, according to businessmen.

Dej Pathanasethpong, president of the Thai Garment Manufacturers' Association, said the issue would increase confusion among foreign investors who do not understand Thailand's internal political pressure and the sufficiency-economy policy.

He said the incident would convince them that the prime minister has no authority to control his administration as there are influential groups putting pressure on the government.

"To regain their confidence, the government should thoroughly reconsider any issue with more discussion before announcing decisions to the public," Dej said.

In less than a week, following opposition led by the People's Alliance for Democracy, Somkid announced his resignation as special economic envoy tasked to clear up misunderstanding among foreigners about the sufficiency philosophy.

Prime Minister Surayud Chulanont hoped that Somkid's experience as chief economic minister in the Thaksin Shinawatra era would help the government a great deal and said his appointment was of huge importance. However, when Somkid resigned, Surayud said a special envoy was unnecessary and no one would replace him.

The resignation followed a number of major policies from which the government has backtracked following protests.

It had to withdraw a draft law to legitimise the two- and three-digit lotteries, changed its mind about reopening Don Muang Airport as Bangkok's second international airport and gradually relaxed the 30-per-cent capital reserve requirement that plunged the SET index by over 14 per cent on the first day of implementation.

According to a source in the securities industry, foreign investors are disappointed with Somkid's resignation.

He said the government's image was sinking. Foreigners were happy with Somkid's appointment because they knew Somkid and knew his policies. They thought he could mend the differences between the two administrations. However, his resignation would make it harder to revive that good feeling.

"It's a pity," he said. "The country is clearly divided. Somkid resigned because of opposition from certain parties. This is clearly bad for the country's image."

He added that the Surayud government had once again made a negative impression on foreigners through the apparently divided approach of the government and the Council for National Security.

"Now businessmen are waiting for the general election," he said. "They are all ears for the charter draft, to know what changes are being introduced to the constitution."

Pramon Sutivong, chairman of the Board of Trade, also believed it was a pity that Somkid resigned.

"PM Surayud could have thoroughly considered the benefits of the appointment, but he had not clearly explained the benefits which led to the opposition," he said, adding that he hoped that this would not dent foreign investors' confidence in the Thai economy.

An executive from Sea Horse agreed, saying that foreign investors operating in the Kingdom should know that this is a normal incident in Thailand. Though this could reduce confidence among those who are thinking about coming to Thailand, once the election is hosted, things should be fine, he said.

Federation of Thai Industries president Santi Vilassakdanont said the incident should not damage the country's overall economic growth, but would absolutely affect the confidence of foreign investors.

A sufficiency-economy envoy is necessary for the Kingdom to boost foreign investors' confidence, he said, adding that the Cabinet should conduct a road show overseas to promote better understanding about its economic policy among foreign investors.

"Some businessmen are upset with Khun Somkid's decision as he is a smart economist," Santi said yesterday. "He should have been offered three months to prove himself and then he could have been evaluated as to whether he was fit to continue working in that capacity."

He noted that Somkid should have been given the opportunity to serve the government and with the close scrutiny he drew, particularly from the media and politicians, it seemed impossible for Somkid to embark on any inappropriate actions.

Santi added that such pressure could scare away capable men from helping the government at a time when they are the needed. The government has so many things to do right now, including retaining foreign investors who are flocking to Vietnam. The government has so far focused on the domestic economy and few government agencies are on road shows. The discontinued relationships with foreign communities could divert foreign investment to other countries.

 Pornsilp Patcharintanakul, deputy secretary-general of the Board of Trade, said the government should not lose credibility from Somkid's resignation. All businessmen knew that the resignation came because of a political conflict.

A banker who asked not to be named brushed aside any disappointments. He said Somkid should not have been appointed in the first place as anybody could be in charge of explaining the theory of a sufficiency economy.

"Indeed, his appointment confused foreign investors because he was part of the previous government. This will not affect the government's credibility, but certainly it is Surayud who stands to lose face," the banker added.

Business Reporters

 The Nation