Business leaders will step up their role as mediators to try to find a solution to the political deadlock by hosting a meeting of all parties from the private and government sectors - in the next two days.
The move came after news that the economy has been hit with a loss of US$120 billion or one percentage point of GDP.
The Thai baht continued to plunge yesterday, falling to 33.12 per US dollar – the lowest level since February 2010. Although foreign buyers returned to the stock market, with net-buys of nearly Bt2 billion in the first three working days of this year, they dumped Thai bonds worth more than Bt3 billion.
“It has been shown that all sectors have agreed that Thailand is in need of reform. But, we need to talk about what kind of reform and when it should be done,” Isara Vongkusolkit, chairman of the Joint Private Standing Committee, said yesterday.
“Private enterprises would like to see solutions soon, as the conflict has created a huge impact on all sectors,” he said.
The meeting will be held on behalf of seven private groups – the Tourism Council of Thailand, the Thai Bankers’ Association, the Thai Chamber of Commerce, the Federation of Thai Industries, the Federation of Thai Capital Market Organisations, the Stock Exchange of Thailand and the Thai Listed Companies Association.
Isara said many businesses need to prepare for the threat to occupy Bangkok, with a plan for a “quick win” to ensure their business can carry on. “But we do hope that solutions can come out soon, and every party needed to talk about this.
After the joint private standing panel meeting, Payungsak Chartsutipol, chairman of the Federation of Thai Industries, said the “Shutdown” next week would immediately create a huge impact on small businesses, as they have low financial liquidity.
He said political instability had already affected the economy and would continue. Asean economies had grown by 5 per cent, but the Thai economy had dropped by 1 per cent already.
“All concerned parties need to raise foreigners’ confidence and ensure no turbulence”, he said.
The Joint Private Standing Committee comprises the three most powerful private groups – the Federation of Thai Industries, the Board of Trade and Thai Chamber of Commerce, and the Thai Bankers Association.
Pornsil Patchrintanakul, vice chairman to the Thai Chamber of Commerce, said enterprises needed to carefully prepare for the Shutdown as it could disrupt transportation and logistics. In case of some difficulty for marine shipment, enterprises may need to use air freight, which would make costs higher.
In the meantime, airlines will reduce the number of flights to Suvarnabhumi Airport.
Tourism will be one of the first industries to be hit hard by the prolonged political fight, but government and business chiefs are prepared for repercussions.
Yongyut Lujintanon, sales and marketing manager for Thailand and Myanmar of Cathay Pacific Airways, said the airline has cut 16 flights from Hong Kong this month, from some 63 a week. The change is aimed at coping with falling demand from Hong Kong after the city-state issued travel warning about the Thai crisis.
This is for the first time the airline has done this, but follows a month of mounting political tension. However, December was a good month for the airline with many travellers for the New Year plus regular business travellers.
Advanced bookings for the Chinese New Year have continued without cancellations at this stage. The firm is closely watching the plan to shut down Bangkok from next week. All information about this will be collected in order to help evaluate the situation and make decisions about flights next month.
Tassapol Bijleveld, chief executive of Thai AirAsia, the country’s biggest low-cost carrier, said the firm had kept its operation as usual. However, the firm has monitored the situation more closely.
He acknowledged that the number of passengers, especially from China, has dropped slightly. This was partly due to the political crisis and a travel warning issued by the Chinese government, which makes people hesitant to fly here.
December was a good month for the airline, even with the political tension.
He urged both sides to step back and talk to seek a peaceful solution. The conflict posed risks to tourism, which was associated with various businesses in the country.
“Clearly, the country has a bitter experience from the closure of airports before. For this part, that is still in the mind of foreign tourists. That makes them worry about trips here. They may shift their trip to other nations and this would make it difficult to call them back when the situation returns to normal. Possibly, they may fall in love with that other country already,’’ he said.
But if the situation ended soon, he believed that tourism would rebound in 45 days, driven by the private sector.