Business urges mou on partnership for stability

Political parties should sign a memorandum of understanding on their partnership in forming a new government in the interest of stability and avoiding changes to a coalition line-up, Federation of Thai Industries chairman Santi Vilassakdanont said yesterday.

As it remains unclear which party - the Democrats or Pheu Thai - will lead the next administration, Santi said the private sector at present preferred clarity and an MoU should help guarantee no more flip-flopping among political parties.

He reiterated the private sector's suggestion that the Democrat Party take the lead, now that Pheu Thai - most of whose members were previously with the now-defunct People Party Party - has tried and failed. He added that House dissolution was not a good option, as it would lead to a political vacuum.

"Without a government, Thailand would face an even more serious crisis in 2009," he said.

Narongchai Akrasanee, chairman of MFC Asset Management, said that if political conflicts continued and led to the absence of a new government, the economy could contract next year. A government is essential, no matter which party leads it.

To Narongchai, the Bank of Thailand's recent rate cut will help to some extent, but fiscal policies would be more effective in boosting the economy. There must, therefore, be a government to approve the spending, and all parties must stop expressing their dissenting opinions so vociferously.

The new government's priorities should be to rush spending and issue new stimulus packages covering infrastructure development and social projects, he said.

Acting Finance Minister Suchart Thadathamrongvech, meanwhile, expressed concern that the economy would be hard hit, particularly in January, if the country still awaits a new government.

As an interim government, he said no new policies could be approved, including the Bt100 billion for additional government spending.

Tanan Tanpaiboon, chairman of the Phuket Property Association, said the Phuket business community was calling for a government that can restore economic and political stability. Businesses said the real estate and the tourism sectors on the resort-island had suffered from the double impact of a declining economy and the cancellation of visits, particularly by foreign tourists.

He said the falling visitor numbers, following the turbulent economic and political situation - coupled with the recent seizure of Suvarnabhumi Airport - had adversely impacted the island tourism's industry, and had in turn affected the local real-estate business.

"Unlike other provinces, the real-estate business in Phuket solely relies on the tourism sector," he added.

He said the new government must be able to restore investor confidence and tackle the ongoing political conflict.

Purit Maswongsa, deputy chairman of the Phuket Tourism Association, said the number of tourists visiting the island had dropped by 50 per cent due to the political turmoil and the recent seizure of Bangkok's international airport by anti-government protesters. Many tourists have cancelled bookings due to concerns about their security.

Regarding the formation of a new government, he said he needed to see stability, which could restore confidence among tourists and investors, as well as Thais, and bring unity to the country.

He added that the association's members had discussed the measures they would propose to the government to solve the problems facing the island, including a request for soft loans to improve the province's economy and a project for restoring Phuket's tourism image.

Tawisan Lonanurak, secretary-general of the Thai Chamber of Commerce - Northeastern Region, said the new administration must be accepted by all feuding parties and not result in further anti-government protests. Moreover, it must contain able economists, who can tackle the country's problems.

He added that many people would not accept the alliance between the Democrat Party and MPs in the faction of Newin Chidchob, who defected from the dissolved People Power Party to support the Democrats.