growing business concern over worsening crises

Speaking yesterday at the seminar "Thailand's future in the eyes of the private sector: how Thai businesses should adjust themselves" - co-hosted by the Thai Institute of Directors and the Thailand Management Association - TCC vice chairman Dusit Nontanakorn expressed concern that small and medium-sized enterprises could be harder hit by the fallout from the US financial crisis than large companies, as they were more likely to experience liquidity problems.

Putting the worsening political situation to one side, he said the chamber had surveyed its members on when their businesses would begin to recover from the global financial crisis. Most members said they should recover after the third quarter of next year.

Many respondents also said their export growth next year was likely to be zero. Orders from overseas in several industrial sectors have been delayed, said Dusit.

Turning to the political turmoil, he said he could not think of a way out.

"If we let the political conflict go on for another few years, it could damage Thailand to the point of collapse," he said.

Somchai Virunhapon, chairman of the Islamic Bank, said the crisis had not affected the institution as Islamic banks all over the world are prohibited from engaging in speculative practices.

It presents an opportunity for the bank to expand its network by focusing on food products, he added.

Vichit Suraphongchai, executive chairman of Siam Commercial Bank, said that even large companies with high credit ratings like American Insurance Group or Citibank had shown they could collapse within just a few months. This should be a lesson for Thai financial institutions.

He said the bank was a non-profit organisation and had to be cautious in its lending . That said, it would lend to companies that need funds for operational cash flow. In case of business expansion in the current circumstances, he said, the bank would have to consider matters on a case-by-case basis.

Visit Tantisunthorn, secretary-general of the Government Pension Fund, said that in the current situation, the fund was holding much more cash than normal.

He said holding cash was considered as carrying the least risk in these times. However, the pension fund needs to look 10 to 15 years ahead and seek returns that are above  inflation.

Visit added that as a result of structural change, risk analysis had also changed, with investment being diversified into lower risks.

Pratana Mongkolkul, chief finance officer of Minor International, said the hotel sector had not surprisingly been hardest hit by the latest flare-up in the political crisis.

"The political situation since yesterday morning is having more of an adverse effect than the [September 2006] coup. This time, it's not about security, but it's a matter of our hotel guests who booked rooms in advance not being able to get into the country as the airport is closed," she said.

When Phuket Airport was closed in September, she added, Minor's overall occupancy rate slumped from 65 per cent to 37 per cent. Now, the rate has recovered to only 60 per cent, compared to the average of 80 per cent during the high season in previous years.

Supaluck Ampujh, executive vice president of the Mall Group, said an increasingly large proportion of its customers of late were tourists, attracted to the country by the baht's depreciation.

She added that the group could partly manage the downturn by creating marketing activities along with partners in a bid to share costs.