US envoy upbeat on thai economic potential despite state of politics

Thailand still has economic potential despite some governance-related issues that might deter new foreign investors, US Ambassador to Thailand Eric G John said yesterday.

In a group interview, the ambassador, who rates governance and the economy his two priorities, said: "The foundations of a good economy exist here, but certainly some problems remain. Investors who know Thailand know that the country still has good potential. Governance is one issue and economic potential is another."

With some investors still haunted by the memories of the shutdown of Bangkok's main airports for eight days late last year, following the seizure of Government House, John believes Thailand will in good time restore the rule of law in order to revive confidence.

"It is a matter of timing as regards reimposing the rule of law. It's up to [Prime Minister] Abhisit [Vejjajiva] and I'm happy to let him deal with that. The airport shutdowns should not have happened. It was very frustrating and sad for those people involved. It was frustrating and expensive for the Thai government to deal with the stranded passengers," he said.

John said that despite ongoing protests on the streets, foreign investors should look at the larger picture. He added that US companies operating in Thailand, which employ more than 300,000 workers, are happy here. Though they have concerns, they are related to other matters.

"Concerns vary. The fresh concern is that there is not as much investment now than there was years ago. There's not so much investment for Thailand. Some [companies] now have labour problems, but not across the board. [Overall], they are happy here," he said.

"They are also concerned about where Asean is going. To them, Asean is still slow in lowering barriers," he added.

Cynthia Griffin Greene, commercial counsellor at the US Embassy, said that on US companies' list of concerns were customs regulations and comparative corporate taxes, as they are looking at Thailand as part of the region.

The Kingdom is also urged to adopt more flexible labour rules, to ease the labour-related problems that some American companies are experiencing, she said.

On the future of GM Thailand, John said it would be disappointing if the company had to end its business here, given that the company is a profitable unit of General Motors.

"In the end, they will see that GM Thailand makes cars, trains labour and imports machinery. This leads me to optimism, but other than that, I don't know," he said.

The ambassador also supported Thailand's action on the protection of intellectual property rights (IPR).

"The government is acting like it is going to be in office longer than previous ones. They are looking at long-term economic issues. It seems the commitments will last longer than just a couple months.

"Deputy Commerce Minister Alongkorn Ponlaboot's visit to the US was  well received because of  this attitude. He was the first Thai minister [on this kind of mission] to the US since I have been here. This is good. IPR concerns all [parties], like [those engaged in] entertainment, movies and books, and not just pharmaceutical companies. Tens of thousands of workers lose jobs because of violations. Yet, it is not something that can be resolved overnight," he said.

Records show that 50 per cent of US exports worldwide are dependent on IPR. It is the general perception that without IPR, inventors would be less inclined to put up investment for new inventions, he added.

John, who has been in the post for more than a year, said his priorities now lay in governance and the economy. He expressed readiness to help Thailand, which he said was a friend, to improve its position on governance issues.

The mission, he said, was to ensure the media's ability to report; people's ability to gather on the streets, demanding democracy; the government's respect of the independence of the judiciary; and the absence of further coups.

"As there is a long line of economic issues to deal with, the FTA [Thailand-US free-trade agreement] is certainly up there, but not first priority," he conceded.