Thursday, August 28, 2008

Business sector hopes for peaceful resolution


Business leaders long for calm

Business sector hopes for peaceful resolution


PAD protesters flock to the Finance Ministry on Rama VI Road, waving placards demanding the immediate resignation of the government. Businessmen, however, expressed hope that the renewed confrontation would remain peaceful.

Business leaders expressed hope that the renewed confrontation between the Samak Sundaravej government and protesters under the People's Alliance for Democracy would remain peaceful.

Executives said the surprise rallies at a number of Bangkok government facilities, including a break-in into the offices of the National Broadcasting Service of Thailand (NBT) and Government House, would have little immediate impact on local businesses.

But foreign investor confidence, already shaken by the political turmoil of the past several months, would continue to suffer, particularly if events turned violent.

Santi Vilassakdanont, the chairman of the Federation of Thai Industries, said for the overall economy, exports were propping up economic growth even as investment and consumption remain weak.

He said the impact of the PAD rallies would depend largely on the government's approach to dealing with the problems.

''I personally can only hope that things end as quickly as possible. It's hard to say when or if these conflicts will end, but certainly business executives are monitoring the events closely,'' Mr Santi said.

PAD leaders are calling for the resignation of the government, which they decry as a puppet of the banned Thai Rak Thai Party and former prime minister Thaksin Shinawatra.

Mr Thaksin is currently in political exile in London after fleeing bail over criminal corruption charges during his term in office.

The People's Power Party meanwhile, formed from the remnants of TRT, is facing dissolution over alleged election fraud during last December's general elections.

Economic growth in the first half was a relatively strong 5.7%, up from 4.8% growth for all of 2007.

But high food and fuel prices have fanned inflation and affected consumer confidence, while new investment has lagged due to political and policy uncertainties.

Cabinet ministers announced yesterday that a proposed investor conference to promote the government's 1.6-trillion-baht megaprojects would be delayed until mid-October.

The Finance Ministry had originally hoped to invite hundreds of foreign investors and diplomats to hear briefings on the megaproject programme from Sept 13-15.

Somchai Sujjapong, a spokesman for the Finance Ministry, said it was impossible to ascertain the impact of the PAD rallies on the government's current economic growth forecasts of 5% to 6%.

''We are monitoring the events. Certainly the prospect of violence or more aggressive protests will not benefit the country's image or the economy.

''For the Finance Ministry, we are hopeful that the government can address the problems peacefully and allow the PAD to disperse under a win-win scenario.''

Aat Pisanwanich, director of the Center for International Trade Studies at the University of the Thai Chamber of Commerce, said political conflict would certainly lead investors to delay new spending projects.

''But the impact is unlikely to be significant if the protests can end within three or four days,'' he added.

But foreign investors are more apprehensive about the situation, according to Fukujiro Yamabe, president of the Japanese Chamber of Commerce.

''The situation is getting worse as the protests are growing in number and they are no longer contained in limited areas. In any country, this type of confrontation is not good for foreign investors at all,'' he said.

Nandor von der Luehe, chairman of the Joint Foreign Chamber of Commerce, agreed, adding that the latest developments certainly did not help stability in the country.

''I personally do not fear for my security in Thailand and the latest developments do not affect my living. But at the same time, there is also no need to test my luck and be near the protests,'' he said.

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