investment and tourism at risk

Business leaders yesterday expressed fears the People's Alliance for Democracy's protests could lead to more violence and bloodshed.

This could delay investment projects in the pipeline and drive away foreign tourists unsure of their safety.

Some shops near the government agencies taken over by the PAD closed their doors yesterday, while some companies allowed their staff to leave earlier than usual. Traffic was light in other parts of the city.

Federation of Thai Industries chairman Santi Vilassakdanont was hopeful the situation would not worsen, or else foreign investor confidence would be hit hard if the government were forced to declare a state of emergency.

He said while long-time foreign investors would stay, a worsening of the violence would drive away new investors.

"Violence will cause domestic consumption and investment to plunge, and we can only pray our export destinations are performing well enough to keep the economy going," he said.

The Thai Chamber of Commerce and the Board of Trade will call a special joint meeting of members to assess the situation if things get worse, said Pramon Sutivong, their chairman.

The situation will be closely monitored to check whether the protests are beginning to affect economic growth.

Suchart Chantranakaraj, chairman of the Thai National Shippers' Council, denounced the PAD's moves to take control of government agencies in Bangkok, saying such action was illegal, caused trouble to the public and damaged the Kingdom's image abroad.

He said the PAD should have resorted to better strategies if it wanted to kick the government out of office.

"The public should not be panicked. The PAD should not provoke any further violence, and the government should try to control the situation. If this is the case, the economy will move on," he said.

He added that the economy was somewhat resilient to political unrest, having achieved continuous growth despite the chronic instability of recent times.

Manop Bongsadadt, president of the International Real Estate Federation of Thailand, fears the PAD could take its protests to a new level and burn down government agencies, which would have a significant negative impact on investment and the economy. Foreign investors, including those with definite plans, could adopt a wait-and-see attitude given any uncontrolled rioting.

"I don't see any way out. Violence could continue, as it is beyond the government's capacity to control the situation. Soldiers and police are being extremely careful in launching actions, as this is a sensitive issue. Clashes would lead to casualties. If even one man dies, it could have a snowball effect," Manop said.

He added that even though many people agreed with the PAD's cause, they did not support its current action and were against violence.

Canon Marketing (Thailand) president and CEO Wataru Nishioka believes some investors could delay their plans and that consumer confidence will be shaken by ongoing confrontation.

The Japanese company's local unit, however, believes the Kingdom's economic fundamentals remain strong, particularly the export sector. The company itself will reassess the situation and could review its business plans if the situation changes, said Nishioka.

Salil Tohtubtiang, chairman of Kuang Pei San Food Products, said the private sector wanted to see the matter ended by peaceful means. However, it is difficult to control such a massive rally. All parties should be careful, or else the country will be badly affected, particularly the tourism industry, she warned.

"This is first time a large number of protesters have managed to get into government offices. It's not the nature of Thais," she said.

While international trade will continue, the tourism sector is expected to be hit hard by the political conflict.

Amid fears that foreign visitors who are sensitive to news of violence could avoid visiting the country, Thai AirAsia CEO Tassapon Bijleveld said rising safety concerns would damage the tourism industry.

This could hurt the upcoming high season, as bookings for travel between October and February normally pick up momentum around this time.

"Many will divert to other countries where they feel safer," said Apichart Sankary, president of the Association of Thai Travel Agents.

If the situation is prolonged, the industry will be hit hard, and it will be difficult to bring things back to normal. He urged all parties to ponder the implications of what they were doing.

Bank for Agriculture and Agricultural Cooperatives president Thiraphong Tangthirasunan urged all those involved in the conflict to show compassion to others.

"Some mistakes should be forgiven, while irregularities - corruption in particular - should be tackled by the legal process," he said.

Board of Trade deputy secretary-general Pornsilp Patcharintanakul called for Prime Minister Samak Sundaravej's resignation or the withdrawal of coalition parties from the government, in order to pave the way for a peaceful resolution.