Businessmen fear escalation

Businessmen have urged all parties to the political conflict to reconcile their differences, otherwise yesterday's violence could escalate and further damage the country, which is already reeling from the impact of the global financial crisis.

The Stock Exchange of Thailand yesterday plunged 4.18 per cent as police used tear gas to disperse anti-government protesters who blocked the entries and exits at Parliament.

Moreover, state-enterprise labour unions are mobilising their forces to join the People's Alliance for Democracy protests.

"I am afraid that the confusion may create more violence, which would bring down both domestic consumption and foreign investor confidence. It will be very difficult to achieve 5-per-cent economic growth amid the many uncertainties," said Pramon Sutivong, chairman of the Board of Trade of Thailand and the Thai Chamber of Commerce.

He urged the government to normalise the situation as soon as possible through compromise, before Thailand's image is tarnished further.

"There are rumours of a House dissolution or a coup. Personally, I favour the former. It would be the best way out as it's acceptable to foreigners and should bring more benefits to the economy than a coup," said a source in the financial market.

Board of Trade deputy secretary-general Pornsilp Patcharintanakul said the violence had further damaged confidence in Thailand, which was already very low. He said the government must urgently heal the "chronic wound", before it spreads and destroys other aspects, especially economic growth.

He fears the protests will again spark a work stoppage among state-enterprise unions, which would lead to huge economic losses. Many businesses are still recovering from the work stoppage by key transportation agencies in August and September, which caused big losses.

Federation of Thai Industries (FTI) chairman Santi Vilassakdanont said that with the violence threatening to worsen, the government must closely monitor the situation or it could further discourage consumer spending this year and damage  the economy.

"Stock investors would refrain from new investment and foreign manufacturers would delay investment plans," Santi said.

He said the FTI, meanwhile, had to evaluate the impact of the US financial crisis on 39 industrial clubs, covering sectors that could suffer from lower orders from the US and Europe. He added that exports to Japan would not be greatly affected, as most of them are food-related.

The government's economic team must set clear and concrete plans to accommodate the financial crisis and government spending must be accelerated to increase domestic liquidity, Santi said.

Securities and Exchange Commission secretary-general Thirachai Phuvanatnaranubala said that based on a recent discussion with investors in Dubai, foreigners were now more concerned with the crisis in the US and Europe than the domestic troubles in Thailand. However, he said the political conflict was far from over, as yesterday's events proved.

"Now, people are panicked over the means used by the police in dispersing the protesters. There should be peaceful means in reaching reconciliation," he said.

Thanan Tanpaibul, chairman of the Phuket Real Estate Club, said the attempt to disperse the protesters was unexpected, given Prime Minister Somchai Wongsawat's reputation for seeking compromise solutions. He said the violence would lead to complications, which would in turn exacerbate the already difficult situation.

"The global conditions are uncontrollable and this has affected the Thai economy and tourism. Coupled with the domestic violence, this would worsen the situation and we wouldn't be able to accommodate the global changes. We must find a way out as soon as possible," he said.

Somboon Jirayus, president of the Phuket Tourist Association, said the government had to urgently consider measures to restore confidence among travellers and investors.

"All parties should come to their senses and brainstorm for a peaceful solution," he said.

Somchai Jitsuchon, director of the Thailand Research Development Institute, said on television that the renewed violence would batter confidence in the Kingdom, which is the last thing the country needs at this time.

He believed yesterday's escalation of the conflict was just the forerunner of further incidents, as many parties are flexing their muscles with a view to worsening the situation.

He said the government should be allowed time to prove itself, while the formation of a constitution drafting committee should be used to bring some normality back to the political situation.