Chamber warns economy might collapse, reform period needed
The Thai Chamber of Commerce has urged the caretaker government to suspend performing its duty to pave the way for negotiations before national reform and prevent the collapse of the economy.
The call yesterday came as pressure continued to build against Prime Minister Yingluck Shinawatra and her government.
Recent court rulings have been unfavourable to her administration and independent agencies are investigating allegations against the PM.
The anti-government People’s Democratic Reform Committee (PDRC) has called for another mass rally in Bangkok today in a bid to pile on the pressure. The group, which is campaigning to rid the country of the so-called Thaksin regime, has demanded that the PM and her cabinet resign and make way for national reform ahead of the next election.
Yingluck yesterday said she would not be “taking a break from politics” to reduce political pressure against her family. She said she was focused on how to get all the parties involved to agree to have a new election soon, after the Constitutional Court last week nullified the February 2 election. In that poll, protesters prevented candidates in 28 constituencies from registering, ensuring it could not be completed.
The National Anti-Corruption Commission has accused the caretaker prime minister of dereliction of duty for allegedly failing to stop corruption in the government’s rice-pledging scheme. The anti-graft agency has given Yingluck until Monday to defend herself against the allegation. But she said the time given was too short and suggested that the NACC was treating her unfairly.
If the prime minister is formally indicted, she will have to suspend performing her duties.
Isara Vongkusolkij, chairman of the Thai Chamber of Commerce and Board of Trade, said the private sector expected a new election and a new government soon in order to have a budget to help prop up the economy. He said the country needed a permanent government in place by the third quarter if gross domestic product were to expand by 2.5-3 per cent this year. But if it were later than that, growth was projected to be lower than 2.5 per cent.
Isara said exports and tourism were expected to be the main drivers of the economy, with help from border trade. He anticipated that a solution to the prolonged political unrest would be achieved soon, with a “neutral prime minister” in place and one-year national reform.
Thai Chamber of Commerce deputy secretary-general Pornsilp Phatcharintanakul said: “The government may pause operating to pave the way for negotiations and the national reform, which could be done within three months, while I expect the national conflicts cannot be eased this year.”
Given the national conflicts and not having a new government to deliver an investment promotion policy, Thailand has become less attractive to investors and some foreign companies that had manufacturing bases here have relocated to neighbouring countries such as Indonesia. Reportedly, some electronics companies and Japanese carmakers relocated their manufacturing bases to that country partly because of its larger population.
Pornsilp does not expect a new government to be formed until early next year. The country’s economy will recover in the third quarter of 2015. He said there was no new public investment at present, while the private sector was afraid to invest.
Pornsilp said export growth this year might be less than 5 per cent, as Thailand's key trade partners are underperforming.