Bangkok Post – Thai woes hit ASEAN

Former foreign minister stresses need for stability

By Parista Yuthamanop, Nanchanok Wongsamuth and Chadamas Chinmaneevong

Jun 2nd 2012| News

Original Article

The political turmoil following efforts by the ruling Pheu Thai Party to deliberate reconciliation bills in parliament shows that all parties might be on the wrong track, Asean secretary-general Surin Pitsuwan said.

Mr Surin, a foreign minister from 1997 to 2001 under the Chuan Leekpai government, said the current political conflict is “very unusual”.

“Reconciliation takes into consideration all opinions within society,” he told the Bangkok Post on the sidelines of the World Economic Forum yesterday.

“We have to be extremely careful of going through with the process if it raises more questions and problems than it resolves. I hope it won’t spill out too much too far.”

Mr Surin said all parties should find an approach to settle “all differences” in Thailand, as the political chaos and street protests affect confidence in Asean.

“Every time political conflicts and tensions spill out to the street, confidence in the country and in Asean is diminished. I hope we settle the differences as soon as possible,” he said.

Plans to integrate the Asean economies by 2015 will result in tremendous opportunities for countries in the region, Mr Surin said.

Each member country should take steps to prepare for the potential benefits as global investors look to Asean.

But the political turmoil in Thailand, ongoing for the past several years, may raise investor concerns about the stability and continuity of the region.

“Thailand has established itself as a founding member of Asean, but during the past four to five years, it has not shown the profile commensurate to its history and potential,” Mr Surin said.

A former member of the Democrat Party, Mr Surin said he was dismayed by the unruliness which occurred in parliament this week.

“I think [the MPs] were expressing their frustrations. I wish it didn’t happen, but it happened,” he said.

But while the spectre of street violence certainly does little good for Thailand’s image abroad, the effect on the country’s long-term investment prospects from conflicts such as the 2006 military coup, the airport seizures by the yellow-shirt People’s Alliance for Democracy in 2008 or the red-shirt riots in 2010 is debatable.

Hans Vriens, managing partner of Vriens & Partners Pte Ltd, a Southeast Asia-focused corporate advisory firm specialising in political risk analysis, said the perception of the Thai government is quite positive in the eyes of most other countries.

“The Thai government, compared to many countries, has taken relatively good care of investors here,” he said.

“Although there is some concern, it’s not too much because neither the yellow nor red shirts are targeting foreign investors.”

Mr Vriens said investor concerns were perhaps greatest following the 2006 coup, as the military-installed Surayud Chulanont government adopted policies considered less investor-friendly.

He said investors are more focused on mature political processes, where the country is more concerned about their general populace than the elite, so issues such as the recent hike in minimum wages has had little impact on overall investment.

“Thaksin [Shinawatra] himself is viewed as pro-business for both local and foreign businesses, and has made quite an effort to showcase Thailand as an attractive destination for foreign direct investment,” Mr Vriens added.

Meanwhile, officials at the Tourism Authority of Thailand expressed confidence that the recent uncertainties will not affect tourist arrivals.

TAT governor Suraphon Svetasreni said it is closely monitoring the local political situation. The agency has ordered its overseas offices to offer regular updates about the situation.

“We are always ready and have three or four scenarios of solutions to deal with various negative factors, including local political problems. We don’t think the current situation will affect tourism sentiment,” he said.

The TAT hopes the Thailand Tourism Festival from June 6-10 at Muang Thong Thani will help boost the industry.

The five-day event aims to attract 200,000 visitors and generate 300 million baht in revenue. Around 800 booths and more than 3,000 tour packages will be displayed at the fair.