Foreign Investors Furious With Thai Govt Response To Flooding

[swillowbee]

If you buildt your billion dollar factory on flood-land, believe the guy who takes you out for drinks and hookers at Nana that "no flood there" and you don't bring in your own experts to check on the risk: NOT MY PROBLEM!

Either way, the bottom line is this does not look good for future or even present investment in Thailand.

I have to agree with you on that plus its going to be very interesting to see who leaves Thailand once all this water gone i would say maybe 10 / 20% due to poor dealings with this ..

Most won't leave because they have a great deal here. Their belligerant attitude will get them some concessions from the taxpayers hopefully to be spent on MUCH higher floodwalls around the industrial estates. Had the government begun to put sheet pilings around the perimeter of the industrial estates two months ago, many would be closed but undamaged and quick to reopen. I hope (but doubt) this will be a 'wake-up' call to take preventative measures. If they properly prepare for future floods this dry season, they may yet draw new investors. I hope this government doesn't give away too much because they have the opportunity to become Very attractive to foreign investment in the future. Time will tell.

... I will wager that the return of foreign investment might happen, but there will be a long lag time before a commitment to return, or to rebuild, is made ... in Thailand, believe all you see, and but half of what you hear.

... those investors whose burn rate does not allow them to wait, might easily go elsewhere.

... those investors whose loss means a near full rebuild, might be reasonably inclined to take the insurance money and rebuild elsewhere.

... no corprate decision-maker will be rewarded by their shareholders or BODs for taking a risk on Thailand equivalent to the one they previously made ... they will first need to see concrete evidence of flood mitigations, which takes years to build ... and let's face it, Thailand has a clear track record of incompetence when building basic infrastructure without foreigners.

... my bet ... foreign export manufacturing investment decelerates in Thailand, in favor of elsewhere.

... a pretty sad place, this country.

Edited October 27, 2011 by swillowbee

[animatic]

They will return, but the big ones will bring in flood control experts. Not to fix the flood problem, but to analyze what places did not take a hit and build there, and then expect the workers to go there. They will no longer just accept the Thais planned manufacturing estates and decide where THEY think it's safe to build.

[ajarnmark]

In addition, he reiterated that the Japanese may no longer do business in Thailand unless the government helps businesses recover.

In another thread about this topic this was mentioned before. I'm sure this would be a good time for other SEA countries (Vietnam and Malaysia especially) to step up and offer tax breaks, relocation incentives, etc.. to woo Japanese industry.

Japanese businessmen aren't stupid. They aren't going to keep throwing money down a black hole especially if the authorities are screwing them.

Japanese businesses are not going anywhere... thats the bottom line... kind of reminding me chicken little...

This is such a sick mentality, i.e. making fortune on the misery of others... none of the other SEA countries are capable to provide what Thailand provides...

Have u ever lived in any other SEA country before? Just try once, especially in those which u mentioned in ur post and u will see...

[gregb]

In addition, he reiterated that the Japanese may no longer do business in Thailand unless the government helps businesses recover.

In another thread about this topic this was mentioned before. I'm sure this would be a good time for other SEA countries (Vietnam and Malaysia especially) to step up and offer tax breaks, relocation incentives, etc.. to woo Japanese industry.

Japanese businessmen aren't stupid. They aren't going to keep throwing money down a black hole especially if the authorities are screwing them.

Japanese businesses are not going anywhere... thats the bottom line... kind of reminding me chicken little...

This is such a sick mentality, i.e. making fortune on the misery of others... none of the other SEA countries are capable to provide what Thailand provides...

Have u ever lived in any other SEA country before? Just try once, especially in those which u mentioned in ur post and u will see...

Really? You sure? I wouldn't make such a bold statement without truly understanding how bad this is going to get.

http://www.bloomberg.com/news/2011-11-14/thai-floods-may-spur-japanese-manufacturers-to-shift-output-to-indonesia.html

[rubl]

In another thread about this topic this was mentioned before. I'm sure this would be a good time for other SEA countries (Vietnam and Malaysia especially) to step up and offer tax breaks, relocation incentives, etc.. to woo Japanese industry.

Japanese businessmen aren't stupid. They aren't going to keep throwing money down a black hole especially if the authorities are screwing them.

Japanese businesses are not going anywhere... thats the bottom line... kind of reminding me chicken little...

This is such a sick mentality, i.e. making fortune on the misery of others... none of the other SEA countries are capable to provide what Thailand provides...

Have u ever lived in any other SEA country before? Just try once, especially in those which u mentioned in ur post and u will see...

Really? You sure? I wouldn't make such a bold statement without truly understanding how bad this is going to get.

http://www.bloomberg.com/news/2011-11-14/thai-floods-may-spur-japanese-manufacturers-to-shift-output-to-indonesia.html

Having never really looked into this issue, I would think that relocation of certain (manufacturing) business would take up to two years before production can start. Having the Thai government paying for cleanup / restart here AND at the same time start buildup of more modern facilities elsewhere may make both economical as well as financial sense.

Maybe I'm too cynical

[KeyserSoze01]

The reason why it was built was because the financial incentives and profit margins must be huge to take the risk. That's why the Japanese government is willing to spend money on reconstruction costs to aid the factories underwater. The profit margin must be enormous.

i'm in complete agreement, build your factory in an emerging nation with a reputation for corruption.......don't expect the services and protections you get in japan

I am sure that CDS risk managers are factoring this into their future ratings of Thai economic stability.

edit: typo

Edited November 20, 2011 by KeyserSoze01

[johna]

dominique355

quote

It's a bit more complicated and complex than that.

Or would you rather prefer all these evil foreign investors to build factories only in their home countries (Japan, Germany, US etc) and deny workers in Thailand (and other "poor" countries) a chance for a job? And people like you and me being able to buy these products at an affordable price?

Or would you prefer these evil foreign investors to build to the same standards as in Germany, US, Japan etc, thus increasing the cost by several factors, pay the domestic workers a wage similar to the one paid in the investor's home country, notwithstanding the local cost of life, and thus making the products made here so expensive that the investment is a failure after a year, workers laid off again and people complaining about the high prices of products, choosing a pirate products instead? (Pirates typically pay even less to their sweat shop workers!)

I would rather prefer these evil investors to invest their dirty money here in Thailand and at the same time the Thai government doing their job. And I include all Thai governments, the present and the past ones, to do their job in the interest of people instead of their own.

This way progress may be slower but sustainable instead of short and then 2 steps back.

There is nothing complicated about this, investors will go where ever they can get the greatest return on their investment.

Low wages, low taxes, minimum bureaucratic oversight, will attract investors.

Despite claims to the contrary, investors have no interest in anything that will increase their production cost i.e. environment, safety etc.

The price of a item in the market place is the price people are willing to pay, it has absolutely nothing to do with the cost of producing that item.

Transferring production to third world countries has not made goods cheaper in the west, competition has done that.

Globalization will not make progress slower but sustainable, it is simple a race to the bottom, when the cost of raw materials and manufacturing are the same world wide, the deciding factor in where to produce those goods will be the price of labor.

“The need of a constantly expanding market for its products chases the bourgeois over the whole surface of the globe, it must nestle everywhere, settle everywhere, establish connections everywhere.”

Karl Marks

Communist Manifesto.

“There is no activity more intrinsically globalizing than trade, no ideology less interested in nations than capitalism, no challenge to frontiers more audacious than the market.”

Benjamin Barber

Jihad Vs. McWorld

Edited November 21, 2011 by johna