Competitive,yes - but investors wary

The ranking, produced by the IMD business school of Switzerland, shows that the United States, Singapore and Hong Kong remain the

world's top-three most competitive economies, unchanged from 2007.

However, another survey conducted by the University of Thai Chamber of Commerce (UTCC) said protracted political and investment policy uncertainties are key factors still hindering foreign investors from launching new businesses here.

Vietnam is the most attractive place for foreign investment in Asean countries, followed by Thailand and Malaysia, according to the UTCC survey. The survey was conducted during May 12 to 14, with responses from 156 foreign firms.

Nandor Von der Luehe, chairman of the Joint Foreign Chambers of Commerce in Thailand, said foreign investors had regained confidence in the wake of last December's general election. However, political stability appears to be short-lived due to increased uncertainties surrounding the Samak government.

Foreign investors also rated the country's investment promotion, economic and other related policies poorly. Besides the political situation, respondents said high oil prices, labour and other matters had affected foreign investors' confidence.

As a result, most respondents said that it is not suitable to invest or expand businesses here at least until the start of next year.

"We want the government to increase foreign investors' confidence by showing consistency and focusing on trade and investment liberalisation to promote the country's economic growth," Von der Luehe said.

He also suggested that more service businesses should be opened up under the Foreign Business Act to foreign investors to increase the country's competitiveness.