Foreign investors are positive on the near-term outlook for Thailand but remain sceptical of its long-term prospects, a seminar heard yesterday.
“The biggest concern of foreign investors is how to prevent this cycle [of political instability] from repeating itself every two or three years,” Prinn Panitchpakdi, managing director of CLSA Securities (Thailand), told the “Thailand Is Back” international conference organised by the Federation of Thai Industries and The Nation.
Derek Kidley, chief executive of PwC Southeast Asia Consulting, said that from his discussions with CEOs around the region, foreign investors remained positive about Thailand and had not pulled out.
However, those living far away are confused about what is going on here and the next 18-24 months will be crucial to see if there will be a sustainable solution.
“I think stability is good but the real issue is how to generate long-term stability. People are looking for concrete steps,” he said.
Prinn said the big flow of capital into the Thai stock market and foreign direct investment in the last few months demonstrated that foreign investors were not worried about the short-term view of the country.
“Thailand can be back in business” if it can get a truly “selfless leader” to set an example.
“There is no quick fix for political reform. It will take a generation, not just one year,” he said.
Foreign investors are happy with the “road map to democracy” that was drawn up by the National Council for Peace and Order, he claimed. “But to achieve true sustainability over the long run, both sides [of political conflicts] need to find a common ground and come to sacrifice,” he said.
Stanimira Koleva, general manager of small- and mid-market solutions and partners for Microsoft Asia-Pacific, said Microsoft had seen some positive signs of technology adoption in Thai businesses that reflected commitments of local businesses here in the last two months.
Lionel Dantiacq, head of Michelin in Southeast Asia and Oceania, said “predictability” was not strong enough at present.
The French tyre company expects growth in regional markets, thanks to the development of better roads and transport infrastructure, but the tyre industry faces huge overcapacity in the region.
He said Michelin had made substantial investments in Thailand, where it runs six factories for tyres and other products, and two of the plants here are some of the best for the company globally in terms of production quality.