Political chaos investors likely to put off projects

The Industry Ministry has accepted the likelihood of many foreign investors postponing their investment plans for at least six months, as they lose confidence because of the domestic political uncertainty.

"If the political tension does not end soon, many foreigners will immediately scrap their investments here," permanent secretary Damri Sukhotanang said yesterday.

He said the Board of Investment (BoI) and all departments under the Industry Ministry would cancel their plans to stage roadshows overseas, because they would be unable to provide satisfactory answers to foreign investors' questions or restore confidence as long as the political chaos drags on.

Damri is also worried that foreign investors whose projects have won incentives from the BoI will not carry out their projects, or could shift their investment to neighbouring countries.

"The unemployment rate will increase if investment projects are scrapped," he added.

Damri said the Industry Ministry would set up a special fund to help manufacturers reduce costs and explore new markets, as well as provide low-interest loans. Manufacturers who apply for funding must agree not to lay off employees in return.

The BoI had targeted net investment applications of Bt650 billion for next year, but this is now predicted to drop sharply.

"If the political turmoil continues much longer, investment in the country will tumble sharply. Therefore, neither the government nor the protesters should worsen the situation, as they have been doing," he said.

Damri believes the industrial gross domestic product will grow by less than 6 per cent in the coming year, after declining to 9 per cent this year.

Meanwhile, the Thailand Textile Institute will conduct a survey to get a firm handle on the industry's prospects over the next 10 months.

The survey will gather data on production, trading and the workforce in the textile and garment industry, said institute director Phongsak Assakul.

"The outlook for the industry is not so good, but we will try to create global linkage, which will boost competitiveness in a period of economic crisis," he said.