Troubled Thailand Moves Toward Stability, A Boon To Investors, As Voters OK Constitution

Ralph Jennings ,  CONTRIBUTOR

+ Opinions expressed by Forbes Contributors are their own.

 

BANGKOK: -- This political shift is hardly Taiwan’s switch from authoritarianism to democracy in the 1980s or end to quasi-military rule for Myanmar in 2012. But on Sunday voters in Thailand approved a constitution allowing a measure of civilian authority to the Southeast Asian country run by a military junta since 2014.

 

The new setup also gives military leaders final say in government decisions. The vote on the constitution, the junta’s first obvious measure of democracy and the second plebiscite in Thai history, moves Thailand toward a peaceful groove after a decade of volatility that opened with a coup in 2006 and crested in violent protests in 2014.

 

Sustained stability would bode well for foreign investors, particularly from traditionally eager sources such as Japan, Singapore and Europe. Applications for foreign direct investment in the largely poor nation fell 78% to 93.8 billion baht ($2.68 billion) in the first 11 months of last year over that period a year earlier while neighbors such asfast-growing Vietnam and Cambodia offered stronger returns.

 

Full story: http://www.forbes.com/sites/ralphjennings/2016/08/07/thailand-moves-toward-stability-after-voters-ok-constitution/#c274b2123ed9

 

-- Forbes 2016-08-08

Perfect!

this quote near the end of the article tells the truth  as opposed to the writer's optimism

“The international business community is attaching zero importance to this referendum, the idea being that Thailand will remain a closed country without a change in its establishment,”

"Troubled Thailand Moves Toward Stability, A Boon To Investors, As Voters OK Constitution"

 

Hmmm. More than just a suggestion of wishful thinking I think... I guess we'll see what happens vis a vis investment, the recent collapse in FDI isn't very promising since a 'Yes' vote in the referendum was already widely expected, that may already have been factored in in the 90% drop. Hardly a boon to investors., and I suspect that we will look back at some point and question whether it was really a move towards stability either...

 

Winnie

Edited August 8, 20169 yr by Winniedapu

Yes, it will be better and more stable to have the disenfranchised workers securely under the thumb of international business. Higher profits, here we come!! And that FDI will insure that the country never develops its own independent industrial sector, which is a big plus right there.

What's not to like?

Just get the money in first....

 

Finally, Thailand is returning to "western democracy", but do read the fine print....military will still have the final say if things get messy in the future....that will ensure no coup will be necessary...happiness returned to people....job done! Really?

If you call stability swimming with sharks around every corner, ok, Thailand is stable. 

A boon for the real estate sector as cautious fence sitters make their move!!!



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The way the headline reads I doubt that anything could be further from the truth. Rather than being seen as a boon to investors I would suggest this constitutional YES vote for a military led "democracy" would be a re-affirmation for foreign investors to keep their distance and for Thai "smart money" investors to keep doing what they are already doing in pursuing their investment opportunities in Vietnam and Myanmar.

The Forbes report suggests that sustained stability would bode well for foreign investors. On the negative side, it also quotes the chief Asia Pacific economist with French investment bank Natixis, as saying “The international business community is attaching zero importance to this referendum, the idea being that Thailand will remain a closed country without a change in its establishment”.

 

Despite to mixed messages, the word from my stockbrokers this morning is, "Referendum cheer for new charter and senator vote This is the best-case scenario. We believe the military and the Democrats will work together closely to win the next elections. Positive outcome should lead to more inflows as election timeline is more visible. We reiterate our 1,600 year-end index target ..." ! Sharing this positive sentiment, the Stock Exchange of Thailand (SET) commenced the day up 22 points (a 1% increase)!

 

As a SET investor, I sincerely hope my stockbrokers are right, and I believe they are based on other evidence. Although I am no fan of the junta, I think the referendum result will not hurt foreign investment (especially in SET). To support my belief, I attach a plot of Net Foreign Investment in SET since January, 2013.

 

It is worth looking at the trends in this plot (as they tell an interesting story in three parts).

The first part (starting during the time of the Yingluck government, well before the coup) is that, between 4 February 2013 and 22 May 2014, Foreign investors were already Net Sellers of Thai stock to the tune of ฿231.6 Billion. After the coup this downward trend was stemmed for a while (presumably as foreign investors allowed the junta a grace period to see how they would perform). Unfortunately, the sell-off resumed, so between 22 May 2014 and 12 February 2016, Foreign investors shed a further ฿184.6 Billion worth of Thai stock.

 

Now, in support of my positive outlook, and despite what many have been saying about continued foreign sell-off, as this plot clearly shows, since 12 February 2016, Foreign investors have been Net Buyers of Thai stock to the tune of ฿97.5 Billion. So, for those of us who have invested in this country, let's hope the trend continues across the investment-board, and the headline proves to be true!

 

 

Im sure investors are just lining up to invest in a military dictatorship , there has never been stability here so good luck if you invest you can only lose.

Anyone who feels impeded in his/her pursuit of love, life, liberty and happiness in Thailand because of the new constitution?

A "boon to stability", or just the start of another cycle?  I doubt the mad rush for the checkbooks is underway just yet.

"Opponents of Thai military rule naturally voiced discontent with the results of Sunday’s referendum. Their hostility might stir public discontent and “take time to build into a larger protest in the streets,” the security institute director in Bangkok says."

 

Biggest understatement of the year! The 2006 timeline just started ticking again. However, the harsher repression will lead to a larger response. It's unfortunate, but repression never leads to reconciliation. The "stability" that was voted in is just the eye of the storm.

Wait until they learn what they actually voted for.

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8 minutes ago, Mosha said:

Wait until they learn what they actually voted for.

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I can't wait. Can you tells us?

More of what they voted against is my guess.

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Foreigners will flock now to invest in Thailand (all 3 of them) And then they will realise it is not the morning star they were following but a broken search light from a closed Down Girley Bar. And off to Vietnam they will then go. In search of a more Promising Land. R.I.P Thailand welcome back Sayam

The violent political protestations of 2010 and 2014 could so easily have been quelled if Thailand had a meaningful law enforcement agency....."watermelon" police!....so beyond useless are/were they in performing their roles.....so inept were these enforcers, that the military eventually were called upon to assist.....their reaction was to come in with live rounds and shoot to kill!

Fully agree with the title. The results of this referendum are a guarantee of stability for the coming years, and therefore for investors.

 

The parties Red and Yellow vying for power have clearly shown their inability to unite the country. Furthermore, I am not certain that the Thais, too susceptible to demagogic promises, have much to gain in democracy with these people.

 

Finally, everyone knows that the central character of the country remains his Majesty Bhumibol. The army seems the only force capable to manage an estate that no one wants.

A stability that needs guns to keep it stable is not a safe stability.

 

I would not invest in a country where the currency is too high, where the labour costs are too high, where the politics are precarious(most people fear this government they certainly don't respect it), where the law is against you,  where the "red-tape" ties you up, etc,etc.

1 hour ago, does said:

I can't wait. Can you tells us?

it seems they have voted for ongoing military control although no thai i have spoken to really understands this as mosha said. seems foreign investors are not happy about this as investment has been down over 80%/year over the last 18 months. will be interesting to see how this plays out. this article seems to say the opposite of what is actually happening.

52 minutes ago, happy Joe said:

Fully agree with the title. The results of this referendum are a guarantee of stability for the coming years, and therefore for investors.

 

The parties Red and Yellow vying for power have clearly shown their inability to unite the country. Furthermore, I am not certain that the Thais, too susceptible to demagogic promises, have much to gain in democracy with these people.

 

Finally, everyone knows that the central character of the country remains his Majesty Bhumibol. The army seems the only force capable to manage an estate that no one wants.

foreign investment has almost fallen to nothing under military leadership, how can this vote to keep power in the hands of the army improve that?

I think the headline and opening notion of the Forbes article has gone off the "optimism" deep end.

 

In some circles, this might be called putting lipstick on a pig.

 

1 hour ago, williamgeorgeallen said:

it seems they have voted for ongoing military control although no thai i have spoken to really understands this as mosha said. seems foreign investors are not happy about this as investment has been down over 80%/year over the last 18 months. will be interesting to see how this plays out. this article seems to say the opposite of what is actually happening.

You could be right about many Thais not knowing the intricacy about the new constitution (how many posters here have read it?). Moreover, I feel the tone of most commentors rather patronizing - as if they and only they know what is good for Thailand - and as if the only road to a stable Thailand is foreign investment.

Other than to the business community, I think the issue of foreign direct investment at large should merely been seen as an indicator of the outside world's feelings about a particular country.

 

If the place seems generally stable, secure, rights are protected, corruption is not excessive, some rule of law, decent workforce, then FDI is likely to flow. On the other hand, is some place is perceived by outsiders as an unstable, unpredictable, governance basket case, then, the dollars are probably going to flow elsewhere.

 

Military power does not govern by love or mandate.

This wasn't a vote for them.

it was a desire to be rid of them ...but many unwittingly don't realise they stay .( when they vote yes) 

 

This propaganda may work domestically or with the communist Chinese or arms dealers like Russia ...the investors otherwise will steer well clear.

 

As for stability threatening and gaoling and arresting a populace and holding them hostage only works until they do a Mass rebellion and soldiers lay down their guns to side with them.

 

i think a purge within 24-36 months is far far more likely.

Im sure investors are just lining up to invest in a military dictatorship , there has never been stability here so good luck if you invest you can only lose.

BMW just recently announced that they are going to build an electric car factory in Thailand. What a stupid decision...right?

6 hours ago, does said:

You could be right about many Thais not knowing the intricacy about the new constitution (how many posters here have read it?). Moreover, I feel the tone of most commentors rather patronizing - as if they and only they know what is good for Thailand - and as if the only road to a stable Thailand is foreign investment.

wikipedia  Thailand is a newly industrialized country. Its economy is heavily export-dependent, with exports accounting for more than two-thirds of its gross domestic product (GDP).

many of these manufactured goods are made by foreign companies taking advantage of local thai labor. with out this foreign investment manufacturing will decrease and the thai economy will shrink. 

"Troubled Thailand Moves Toward Stability, A Boon To Investors, As Voters OK Constitution"

 

Not everyone thinks so

 

http://time.com/4442731/thailand-new-consitution-referendum-vote/
 

Quote

Time Magazine article

The coup has had grim consequences for Thailand’s 68 million people.

The economy is anemic, vital tourist numbers are down, and the junta routinely detains critics and tries them in military courts.

Thailand was once a shining beacon of democracy in a region blighted by brutal authoritarianism. No longer.