If anything, any political change that took place unexpectedly would only worsen Thailand's investment climate, which is already beleaguered by a series of regulatory problems, said panellists at The Nation's roundtable.
The Map Ta Phut crisis and the long-delayed 3G service roll-out were cited as the apparent victims of regulatory problems. And a political change would guarantee no end to the uncertainties. Eventually, this would push away potential foreign investment and it would take decades for Thailand to appear attractive again, they said.
Ron Livingston, president of the Thai-Canadian Chamber of Commerce, said Thailand's recovery had been hampered by greater competition from Malaysia and Singapore, as well as the Map Ta Phut scandal and the government's inability to move ahead with 3G licensing.
Livingston, who is also vice chairman of the Board of Trade, stressed Thailand needed national economic strategies, like the one set 30 years ago to drive the country as a global player in the textile and manufacturing sectors.
"We need to look strategically at what we want. What type of technology to drive the relocation and labour, to allow us to move a step ahead," he said. Political instability does play a role for foreign investors when weighing the pros and cons of potential investments, and the assets-seizure case [against ex-PM Thaksin Shinawatra] raises issues about corruption and the rule of law in Thailand for the outside world, Livingston said.
He noted that in his home country, Canada, two parties may fight, but when the fighting is over politicians shake hands. As such, political fights have no effect on business.
Yo Jitsukata, president of the Japanese Chamber of Commerce in Bangkok, stated that while foreign investors would always consider an unstable political situation as a risk factor, the Map Ta Phut scandal represented a bigger risk in terms of investment losses, and that the government must quickly resolve this issue in order not to further lose investor confidence.
He expressed surprise at what happened in Thailand, as confrontation is intensifying, though all sides claim they love the country.
Peter J van Haren, former chairman of the Joint Foreign Chambers of Commerce of Thailand, said that under this circumstance, foreign investors would be more attracted to Vietnam if they want to expand to Asean or Asia. Despite Thailand's attractive infrastructure like golf courses, beaches, hospitals and schools, those without direct experience of the country - who see it through television and newspapers - will be averse, he said. "It's easy to put investment in the capital market. But when it comes to investment in the real sector, that demands two to three years of planning, securing financial packages and construction. If a government change does not lead to policy change, then it's OK. If not, it is difficult to withdraw," he said.
Bunluasak Pussarungsri, research head of CIMB Thai Bank, is hopeful the Map Ta Phut crisis will be solved with a clearer regulatory framework for new projects, but in the end, not all of the 64 suspended projects will proceed, the banker said.
With uncertain politics, there is no strategy focus. Unlike in the past, Thailand can count on no technocrats. Under the coalition government, politicians have taken charge of economic ministries, and left the Education Ministry in the hands of someone who lacks understanding of the issue, Bunluasak said, adding that this will pose long-term problems to the economy.
To Sethaput Suthiwart-Narueput, executive vice president and chief economist of Siam Commercial Bank, Thailand lacks a rudder. Before, the National Economic and Social Development Board played that role, giving clear guidance on what the Kingdom needed during a particular period.
However, in the 10th development plan, it focused more on a green and happy society, without any concrete guidance.
Without direction, Sethaput said he is worried about the future of the civil service, as all experienced civil servants are retired and new talent will be drawn to the more attractive private world. In the long term, this will pose major problems as these civil servants are running the show, as politicians are weak, he added.
Tanit Sorat, vice chairman of the Federation of Thai Industries, said the political crisis would intensify the problems that Thailand is facing - non-tariff barriers, the integration with Asean, poor domestic consumption and insufficient financial liquidity. "As Map Ta Phut requires more action, the absence of government would only make the matter worse and it would ruin investor confidence," he said.
Companies are now sitting on cash and gold and delaying investment in new equipment. Operating with old equipment will lead to lower productivity, and this could lead to lay-offs, Tanit said.
Tourism Council of Thailand president Kongkrit Hiranyakit said that in the past 20 years, the Thai tourism industry had witnessed average growth in tourist arrivals of 6-7 per cent per annum. Without the airport closure and the Songkran violence, the tourist arrivals in 2009 would have been 16 million, rather than 14 million. Without violence on February 26 - when the ruling the assets-seizure case is due - the figures could rise to 15 million this year, Kongkrit said.
Kongkrit said the tourism industry had been boosted mainly by private investment. Given the huge supply and high competition, the government should consider investing in mega-tourism projects like Malaysia, China, Hong Kong, Laos and Vietnam.
"The government should learn from other countries to create new products, to complement old attractions," said Kongkrit.
Dusit Nontanakorn, chairman of the Thai Chamber of Commerce, said that in the past five years, the economy has gone nowhere due to politicians who could not clear up their problems before taking office. Power disputes lead to the absence of long-term strategies, Dusit said.
"If foreigners totally turn their back on us, they could be gone for 30 years. Without jobs, graduates then would need to carry tools to dig up something to eat," he said.
