Concerns remain about social divisions

ELECTION 2007

Concerns remain about social divisions

POST REPORTERS

Business leaders were pessimistic that Sunday's election will lead to a pickup in economic growth.

Many said there was little to distinguish between the front-running People Power Party and the second-ranked Democrat Party in terms of policies.

Of potentially greater concern was the widespread sentiment that the country's social and political divide that has affected growth shows little signs of closing with the successful elections.

Nipon Surapongrukchareon, the vice-chairman of the Federation of Thai Industries, said a weak US dollar, high oil prices, inflation and global economic risks would be key challenges for whichever party forms the next government.

''Whether it is Mr Abhisit [Vejjajiva, the Democrat leader] or Mr Samak [Sundaravej, the PPP leader] who becomes prime minister, we need a clear direction for the country to move forward,'' Mr Nipon said.

FTI chairman Santi Vilassakdanont said new fiscal measures were needed to spur domestic consumption, particularly among the rural poor.

Improving foreign investor confidence was also critical to help draw new investment, he said.

Medium-term, he said, the government should create new industrial clusters, reduce logistics costs, promote technology and collaboration between the public and private sectors.

Pornsil Patchrintanakul, the deputy secretary-general of the Board of Trade, said the new government should have a clear vision on how to raise Thailand's profile in the world market.

''I would like to see a visionary economic policy established, one that considers our position in the global market and establishes an action plan for the short, medium and long terms,'' he said.

Unfortunately, he said, both PPP and the Democrats were focused on domestic, short-term issues with little long-term development strategy.

''A coalition government may have problems implementing policy. But frankly, I think it's best if the government just doesn't interfere with the private sector too much,'' he said.

Chookiat Ophaswongse, the president of the Thai Rice Exporters Association, said political skills would be crucial.

''The election is positive as it has restored the country to democracy. But I have concerns about the qualifications of our leaders. [The prime minister] should be well-accepted among the business community,'' he said.

Mr Chookiat said PPP's victory was widely anticipated by the business community, but that the Democrats' strong showing in Bangkok was a minor factor.

''But I don't really expect any differences between a coalition led by either party,'' he added, and agreed that for the farm sector, water management and logistics improvements were critical.

Chaipranin Visudhipol, chairman of the ad agency TBWA\Thailand Co, agreed that for many businesses, it made little difference who formed the next government and that the private sector had little faith in state support and relied on its own abilities instead for survival.

''It doesn't really matter, since regardless, Thai politics remains in uncertain territory,'' he said. ''What surprises me is that even with the struggles in Thai politics in recent years, we are still back to square one.''

Sara Lamsam, the president of the Thai Life Assurance Association, agreed that the return to democracy was one positive step for the country.

''It's good to regain democracy, and it's time for Thailand to have a 'real government' after the country and economy have struggled for a year and a half under the military-appointed government. The new government should at least help restore the confidence of foreign countries and foreign investors.''

Suchin Wanglee, president of the General Insurance Association, agreed. ''Democracy is a system decided by the majority. It's not a matter of what we like or dislike. At least we have democracy back.''

Mitsuhiro Sonoda, the president of the Japanese Chamber of Commerce, said he was hopeful that the new government's policies were balanced.

''We would like the incoming government to continue 'fair', 'free' and 'consistent' economic policy, which has been always the advantage of Thailand,'' he said in a statement.

The Surayud Chulanont government was widely criticised as unpredictable in its policies, particularly attempts to tighten the Foreign Business Act and curb inflows through capital controls. Both the PPP and Democrat Party have promised to maintain the country's traditional pro-foreign investment stance and scrap the controversial 30% capital controls on foreign inflows.