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Thailand saw its international competitiveness slip by six places in the latest 2008-09 Global Competitiveness Index (GCI).

The Kingdom slipped to 34th, down from last year's 28th.

A number of negative factors have contributed to the fall in ranking, especially those related to political stability.

According to the Swiss-based World Economic Forum, which is behind the GCI, government instability and the prospect of coups were the most problematic factors for doing business here.

Respondents were asked to select five of the most problematic for doing business in each of the countries surveyed from a list of 15 factors, and then rank them between 1 (most problematic) and 5.

Among the top three factors, government instability and coups accounted for 21.5 per cent of the responses, followed by policy instability (13 per cent) and inefficient government bureaucracy (12.1 per cent).

The other factors were: corruption (10.3 per cent); inflation (8.5 per cent); inadequately educated work force (7.4 per cent); inadequate supply of infrastructure (5.2 per cent); tax regulations (5.1 per cent); foreign currency regulations (4.6 per cent); access to financing (4.1 per cent), tax rates (3.5 per cent); poor work ethic in the national labour force (2.2 per cent); restrictive labour regulations (1.2 per cent), crime and theft (0.8 per cent), poor public health (0.6 per cent).

The figures show that politics remains a major deterring factor for the international community in doing business in Thailand. Over the past three years, the country has witnessed frequent changes of government. First, the Thaksin Shinawatra administration was overthrown in a coup in September 2006.

Then there was the interim Surayud Chulanont government, which was in power for just over a year.

The following general election in December 2007, however, saw the return of Thaksin's allies and Samak Sundaravej as another short-lived premier holding office for just about seven months.

Then the country got a new prime minister last month, albeit another proxy of the ousted Thaksin, who is now seeking asylum in the UK.

These frequent changes of governments and prime ministers over the past years plus relentless street protests and the on-going occupation of Government House are sufficient to dent any potential investor's confidence in the Thai political situation.

Government instability also automatically leads to policy instability or frequent policy changes as evidenced by results of the GCI survey.

In other words, economic, social and other weaknesses were perceived as "less important" as far as doing business in Thailand was concerned.

For example, inflation was less worrying for respondents (only 8.5 per cent), while insufficient education of the work force got only 7.4 per cent in the total responses.

The availability of infrastructure, or mega-infrastructure projects as often touted by the government but with little progress in terms of implementation, got only 5.2 per cent of the total responses.

Ranked 34th, Thailand is lagging behind countries like Czech Republic (33), Estonia (32), United Arab Emirates (31), China (30), Malaysia (21) and Singapore (5).

The United States came first in the survey, followed by Switzerland, Denmark, and Sweden.

European economies also continued to dominate the top 10 with Finland, Germany and the Netherlands following suit.

According to WEF, the rankings were  calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by WEF and partner research institutes.