Tourist snubs and investor jitters as Thai rallies bite

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Focus
Tourist snubs and investor jitters as Thai rallies bite
by Apilaporn VECHAKIJ

BANGKOK, January 29, 2014 (AFP) - As protests grip Bangkok and bitter controversy hangs over upcoming elections, Thailand is facing battered investor confidence, lower growth and millions of dollars of lost tourist revenues, experts say.

The Southeast Asian nation has been dubbed "Teflon Thailand" for its ability to recover quickly from numerous economic knocks associated with political turbulence that has beset the country since a 2006 coup.

But the latest unrest has raised fresh concerns that businesses and visitors could tire of repeated rounds of protest and regime change in the polarised kingdom, a regional manufacturing and tourism hub.

"We have suffered again and again -- we have to heal and build up our image again and again. It is a waste of time," Piyaman Tejapaibul, president of the Tourism Council of Thailand (TCT), told AFP as hotels, shops and restaurants complain of reduced revenues after weeks of rallies.

Protesters, backed by the Bangkok middle classes and powerful elements in the elite, have embarked on a self-styled "shutdown" of the Thai capital in their latest push to topple the government.

Prime Minister Yingluck Shinawatra has called a snap February 2 election in an attempt to staunch the political tensions, but the main opposition Democrat party is boycotting it and demonstrators have vowed to block voting.

Protesters want the poll postponed for a year or more and an unelected "people's council" imposed to help erase the political might of ousted former premier Thaksin Shinawatra -- Yingluck's brother.

While the government has insisted on pressing ahead with the vote, observers see scant signs that the country can begin to heal fractures between the anti-Thaksin opposition and the billionaire tycoon's huge electoral base of rural and urban working class communities from the north.

"Until a long-term resolution is found, Thailand's deep political divide will remain, leaving the country susceptible to political upheavals that will constrain its growth potential," said Capital Economics recently, predicting economic growth was unlikely to exceed 3.0 percent this year.
'Forget about investment'
Thailand has lost an estimated 200-500 million baht ($6-$15 million) every day in trade, investment and tourist revenues since the demonstrations began three months ago, according to the Thai Chamber of Commerce.

"Forget about investment for now until we have a new government," vice chairman Pornsil Patchrintanakul told AFP.

Fears were heightened when the embattled government announced a 60-day state of emergency last week owing to fears over violence in the capital, where several people have been killed and hundreds injured in grenade and gun attacks and street brawls.

"It sounds scary. Psychologically it makes people, including foreigners, afraid and nervous about the chance of more unrest," Pornsil said.

Some 40 countries have issued travel warnings, with tourists advised to avoid protest sites and take extra care in Bangkok.

TCT estimates the country has already suffered a 22.5 billion baht loss in revenues from visitors.

Bangkok has taken the brunt of the tourist snub, with arrivals at the main international airport down nearly 6 percent year on year in the first three weeks of January as they head straight to the country's unaffected beach destinations.

Roadblocks studded with lines of tents have snarled traffic at several key Bangkok intersections.

And newly pedestrianised streets have been transformed into ad hoc markets selling protest-themed accessories -- from "Bangkok Shutdown" t-shirts to elaborate headwear adorned in the Thai flag.

But more traditional retailers have suffered.

"Fewer tourists and office workers have come to buy products and services in the area," said a statement from Ratchaprasong Square Trade Association, which represents businesses in a key retail and hotel area of the city.

Thailand's central bank last week said the political situation posed a risk to growth as it left its key interest rate unchanged at 2.25 percent.

The credit rating agency Moody's has lowered its gross domestic product (GDP) growth forecast for Thailand last year to around 3.0 percent, down from 3.7 percent, because of the impact of the protests on the final quarter of 2013. Full-year GDP data is due to be released next month.

Seven years of political turmoil, along with the destruction wrought by devastating 2011 floods, have raised fears that long-term investors such as Japanese carmakers, could look for alternative production bases.

But Thai businesses said exports are expected to be resilient to the crisis -- with many manufacturing areas based outside the protest's sphere.

Tanit Sorat, vice-chairman of the Federation of Thai Industries, said strong economic foundations and infrastructure would persuade manufacturers to stay put.

"Where else could they have it all like here?" he told AFP, adding that political conflicts are "part of Thai society".

"If you want to invest in Thailand, you have to take political risk into account," he said.


-- (c) Copyright AFP 2014-01-29

[JoeThePoster]

The Southeast Asian nation has been dubbed "Teflon Thailand"

Really, I thought it was Tinfoil Thailand.

[terryp]

the Hub of .................................

[mimithewoof]

The possible development of the situation here reminds me of the set-up in Greece over 40 years ago - at that time the country was being run by a military junta which had overthrown the government. By the time I visited Athens, the Greek economy had bottomed out and the formerly extremely healthy tourist industry had collapsed. The Greeks I spoke with were devastated, ashamed they'd let it happen, and very angry.

I'd hate to see the same happening here, but the checks and balances which eventually pushed Greece back onto the right, democratic path don't seem to be available in Thailand due to cultural differences.

And yes, I do know that Greece has 'lost it' again! Sad.

[Seastallion]

It's not a tourist "snub", it's a tourist avoidance.

[pipkins]

The bite begins.

Many of these latte break revolutionaries are going to get a shock soon as the downturn bites business in Bangkok.

Business make their own problems by siding with anybody in power however obnoxious. Business seem to think they can operate in a a vacuum while all else fails.

If they are smart we are told they are.... mainly by them mind they will see a Coup as not the way to go. Add to the current downturn by sanctions and embargoes and Thailand really does go tits up.

Least it is the BKK business shoudering most of the hurt, so nothing to worry about there and many see them bringing it on themselves.

[jaltsc]

"Thailand is facing battered investor confidence, lower growth and millions of dollars of lost tourist revenues, experts say."

The next TAT campaign: "Visit Thailand. At least we're not North Korea."

[up-country_sinclair]

It is certain that a prolonged protest/conflict will eventually hurt the economy, but as of this afternoon, the SET is down only 2% in January. And I think that is in line with many other indexes in the region.

[NongKhaiKid]

The Southeast Asian nation has been dubbed "Teflon Thailand"

Really, I thought it was Tinfoil Thailand.

Yes, or Tinpot ?

[FalangBaa]

"The Hub of Snubs"

[Tomtomtom69]

Just the kind of reassuring remarks an investor wants to hear when considering an investment in Thailand as opposed to more politically stable Vietnam, emerging Cambodia or Myanmar, for example: "If you want to invest in Thailand, you have to take political risk into account".

Surely no investor has ever said these words: "Wow, a country with such great infrastructure and a colorful political scene, blocked streets, protesters getting blown up by hand grenades, just what we were looking for when we decided to open our pineapple canning factory here!"

Thailand may have decent infrastructure, but it doesn't mean the rest of the region can't catch up, Mr. Tanit. Your words of assurance aren't exactly reassuring.

[bigbamboo]

"Thailand is facing battered investor confidence, lower growth and millions of dollars of lost tourist revenues, experts say."

The next TAT campaign: "Visit Thailand. At least we're not North Korea."

"............yet"

[Lingba]

you think investors are running now...wait till after the weekend....it will be a very long time before they return

[pineconehead]

I am more concerned about the impending doom that is the Chinese black market banking/lending system. If that bubble collapses, SE Asia is likely in for a seriously rough ride. Greece might look good all over again.

[mojorison]

Just the kind of reassuring remarks an investor wants to hear when considering an investment in Thailand as opposed to more politically stable Vietnam, emerging Cambodia or Myanmar, for example: "If you want to invest in Thailand, you have to take political risk into account".

Surely no investor has ever said these words: "Wow, a country with such great infrastructure and a colorful political scene, blocked streets, protesters getting blown up by hand grenades, just what we were looking for when we decided to open our pineapple canning factory here!"

Thailand may have decent infrastructure, but it doesn't mean the rest of the region can't catch up, Mr. Tanit. Your words of assurance aren't exactly reassuring.

You say "can't catch up..." I think Thailand is being left in the dust by Burma and Vietnam especially. Even the 3rd world back woods that was the Philippines is measuring up to a Thailand that is in reverse at 7000RPM. God almighty what will happen when ASEAN gets into full swing. It seems to me that they are cutting noses off to spite their face in BKK. At some point the good people of BKK will realise that no good will come of this ongoing merry-go-round, as they ultimately will be the biggest losers... I am getting sicker and sicker of seeing the same clowns from both sides looking for angles. If I was a tourist, I'd probably snub Thailand too.

[Tomtomtom69]

Just the kind of reassuring remarks an investor wants to hear when considering an investment in Thailand as opposed to more politically stable Vietnam, emerging Cambodia or Myanmar, for example: "If you want to invest in Thailand, you have to take political risk into account".

Surely no investor has ever said these words: "Wow, a country with such great infrastructure and a colorful political scene, blocked streets, protesters getting blown up by hand grenades, just what we were looking for when we decided to open our pineapple canning factory here!"

Thailand may have decent infrastructure, but it doesn't mean the rest of the region can't catch up, Mr. Tanit. Your words of assurance aren't exactly reassuring.

You say "can't catch up..." I think Thailand is being left in the dust by Burma and Vietnam especially. Even the 3rd world back woods that was the Philippines is measuring up to a Thailand that is in reverse at 7000RPM. God almighty what will happen when ASEAN gets into full swing. It seems to me that they are cutting noses off to spite their face in BKK. At some point the good people of BKK will realise that no good will come of this ongoing merry-go-round, as they ultimately will be the biggest losers... I am getting sicker and sicker of seeing the same clowns from both sides looking for angles. If I was a tourist, I'd probably snub Thailand too.

Yes I used a double negative "doesn't mean they can't catch up", which is what I think some people in power here, who are very much in denial don't think can happen. "Oh at least Thailand is better than Laos or Cambodia" is often used by these business people or politicians when they've run out of better things to say. Is it? Well, maybe not for much longer if these political debacles continue. Not to mention the ongoing instability in the south, which although it hasn't affected anywhere outside the 4 southernmost provinces yet, it is surely not acceptable for a country like Thailand to have an insurgency problem. Laos, by comparison a much poorer country pretty much flushed out it's insurgency problem about 10 years ago and it was never as bad as Thailand's to begin with. I too am sick of the ongoing political struggles, which are becoming more volatile by the day. While I respect the right to peaceful protest and the protesters have by and large been peaceful, there are obviously some people out there that are looking to cause further trouble by throwing grenades and home made bombs around and killing protest leaders like what happened in Bang Na last Sunday I believe. All of these things are good enough reason to avoid Thailand, at least for now.

Incidentally, speaking to a friend who works in customs, she told me that a lot of businesses involved in trade and shipping are making substantial losses as foreigners pull out Thailand. This is not a good time to be involved in trade between Thailand and foreign countries as new hiring is going down and investors are either pulling out or those thinking about coming here are staying away.

Edited January 29, 2014 by Tomtomtom69

[apetley]

A business friend of wifeys has recently had a Japanese investor pull out of a deal because of the protests. It is not a 'wait and see' but a 'never return' pullout as the investor has finally seen one too many problems over the last few years. The friend is pissed off to say the least and I doubt if this is an isolated case.

[Balance]

That is it, postpone any election until the "political might" of the PTP can be ERASED. How very democratic. It is a truly remarkable how the Xenophobia combined with greed will be allowed to destroy the gains Thailand has made in the past few years. Poor people can vote now and they know it. Nothing that the right wing can do will change that. I realize that Thai people have never cared what the rest of the world thought, but this is not 1932, this is 2014 and Thailand has already crossed the bridge to play on the world stage. Hello, Thailand needs investor capital; Thailand needs manufactures to not only stay in Thailand, but for more to come and locate in the rural areas to provide jobs; Thailand needs a good credit rating. Does Thailand want to have the same standard of living as neighboring states (and I am not including Malaysia)? Just keep it up.

[jollyman]

The Southeast Asian nation has been dubbed "Teflon Thailand"

Really, I thought it was Tinfoil Thailand.

Really I thought it was TIP POT Thailand

We have a good stable government in Mongolia, Thailand should be envious. An old Mongolian proverb:

You can break a piece of wood, but not a log pile

[3NUMBAS]

the yellow shirts BKK elites don't care about Thai businesses in the long term time and again they have shown nothing but disdain for Thailand long term future . they are well off enough not to bother about their fellow countrymen and if they end up in poverty they would just laugh in their faces .

the country is better off with a thaksin gumment than a selfish group of BKK elitists .

[oldthaihand99]

I am more concerned about the impending doom that is the Chinese black market banking/lending system. If that bubble collapses, SE Asia is likely in for a seriously rough ride. Greece might look good all over again.

Thai black market lenders business is booming these days.

Protest t-shirts are another money maker.

Aside from that, everything is basicly "same same" as far as LOS in the L10 years goes.

Bombs going off in the capital? Nothing new.

BKK under a "Mini-Me" siege. Been there, done that.

People being shot & killed. Yawn.

[khrab]

Just the kind of reassuring remarks an investor wants to hear when considering an investment in Thailand as opposed to more politically stable Vietnam, emerging Cambodia or Myanmar, for example: "If you want to invest in Thailand, you have to take political risk into account".

Surely no investor has ever said these words: "Wow, a country with such great infrastructure and a colorful political scene, blocked streets, protesters getting blown up by hand grenades, just what we were looking for when we decided to open our pineapple canning factory here!"

Thailand may have decent infrastructure, but it doesn't mean the rest of the region can't catch up, Mr. Tanit. Your words of assurance aren't exactly reassuring.

Do you mean the roads or the railways?

[Piichai]

It is certain that a prolonged protest/conflict will eventually hurt the economy, but as of this afternoon, the SET is down only 2% in January. And I think that is in line with many other indexes in the region.

IIRC, SEA excluding Thailand is +2.38 YTD. Thailand is -2.07 YTD, a bit off the pace.

[tonneke breda]

the yellow shirts BKK elites don't care about Thai businesses in the long term time and again they have shown nothing but disdain for Thailand long term future . they are well off enough not to bother about their fellow countrymen and if they end up in poverty they would just laugh in their faces .

the country is better off with a thaksin gumment than a selfish group of BKK elitists .

What a crap...

Those Yellow shirts as you call them are the business, except of a few Chinese self-made billionaire families who are all in the PT party, so what are you talking about..?

[skorchio]

Just the kind of reassuring remarks an investor wants to hear when considering an investment in Thailand as opposed to more politically stable Vietnam, emerging Cambodia or Myanmar, for example: "If you want to invest in Thailand, you have to take political risk into account".

Surely no investor has ever said these words: "Wow, a country with such great infrastructure and a colorful political scene, blocked streets, protesters getting blown up by hand grenades, just what we were looking for when we decided to open our pineapple canning factory here!"

Thailand may have decent infrastructure, but it doesn't mean the rest of the region can't catch up, Mr. Tanit. Your words of assurance aren't exactly reassuring.

Do you mean the roads or the railways?

That is quite nicely put Sir.

[citizen33]

When I think of Thailand I'm sometimes tempted to apply Ricardo's three class model of capital accumulation, based on rentiers, capitalists and workers. Obviously the old elite now holds both land and capital, but would it be fair to say that the rentier element is still unusually prominent, so that they may not always push the interests of capital (i.e. business) before all else?

[F430murci]

Just saw this list from large US news network of vacations spots with go or do not go recommendations.

Mexico, Brazil and St. Petersburg Russia made the "to go" list.

Only Thailand and Egypt made the don't go list. I think I would feel much safer in Thailand than either Mexico or Brazil at the present time.

-------------

http://www.today.com/travel/go-or-not-go-countries-enjoy-or-avoid-year-2D12005122

[ikke]

the yellow shirts BKK elites don't care about Thai businesses in the long term time and again they have shown nothing but disdain for Thailand long term future . they are well off enough not to bother about their fellow countrymen and if they end up in poverty they would just laugh in their faces .

the country is better off with a thaksin gumment than a selfish group of BKK elitists .

What a crap...

Those Yellow shirts as you call them are the business, except of a few Chinese self-made billionaire families who are all in the PT party, so what are you talking about..?

The yellows are the business ???? Where did you get that from ?, Huge companies as PTT , Singha etc... are sure not yellow, and this same companies have already stated that investing in Thailand is no option today, but I am sure you are a big business man who is yellow and ready to do some nice investment.

[samba2014]

Its all very strange how both sides strategize these events yet there is no ending solutions except for some "people's council" to run the country...

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

[Tomtomtom69]

Just the kind of reassuring remarks an investor wants to hear when considering an investment in Thailand as opposed to more politically stable Vietnam, emerging Cambodia or Myanmar, for example: "If you want to invest in Thailand, you have to take political risk into account".

Surely no investor has ever said these words: "Wow, a country with such great infrastructure and a colorful political scene, blocked streets, protesters getting blown up by hand grenades, just what we were looking for when we decided to open our pineapple canning factory here!"

Thailand may have decent infrastructure, but it doesn't mean the rest of the region can't catch up, Mr. Tanit. Your words of assurance aren't exactly reassuring.

Do you mean the roads or the railways?

Only the roads, definitely not the railways!