Thailand's heightened political tensions have sent a shudder through
the economy, hitting the share market and the tourism industry. As Ron
Corben reports from Bangkok, industry groups have called on Prime
Minister Samak Sundaravej to end the state of emergency to avoid
further damage to the economy.
The Thai Chamber of Commerce
and the Board of Trade say the state of emergency imposed this week
sends the wrong message to the international business community.
Prime
Minister Samak Sundaravej issued the decree after pro- and
anti-governemnt protesters clashed on Tuesday, leaving one person dead
and many others injured. He said Friday he is considering lifting the
decree soon.
Some business leaders have called on Mr. Samak to
comply with the protesters' demand that he resign. But Thursday, Mr
Samak said he would stay on, "for the sake of democracy".
Chulalongkorn
University economist, Sompop Manarangsan, says the outlook is grim,
especially given the global economic downturn, which hurts demand for
Thai exports.
"I think it's going to be more serious now
because now Thailand is not only facing the internal problem, but also
having to face the challenge of the global trend of recession," he
said.
The People's Alliance for Democracy began protests
earlier this year criticizing the government over steps to alter the
constitution. Thousands of PAD protestors are now encamped in the
compound of the government's main administration building.
The
Stock Exchange of Thailand says $45 billion in share value has been
wiped off the market this year due to the political uncertainty.
Foreign investors have dumped more than $3 billion worth of shares.
The
tourism industry is suffering, as several countries have warned their
citizens to avoid visits to Thailand because of fears of more violence.
Tourism contributes six percent of gross domestic product, with earnings in 2008 expected at over $17 billion.
Tourism
groups say arrivals at Bangkok international airport are down 30
percent in recent days, costing around $11 million a day in lost
revenue.
John Koldowski, a spokesman for the Pacific Asia
Travel Association, says part of the problem is that protests have
closed airports and disrupted flights.
"That [the closures]
would leave a bitter taste in the mouth of those directly affected," he
said. "And that would spread around the globe pretty quickly as
connected as we are - so yes that would be a negative perception."
Anusorn
Buranakanonda, the managing director of investment firm, BT Asset
Management, says experienced investors will see the political
uncertainty as a test of Thailand's ability to overcome short-term
problems.
"This is not the first time that Thai society has
faced some political problems but in the past few years," he said.
"Society has managed to overcome the problems - putting the problem
behind and moving on - this crisis I hope will be very much the same."
Thailand's economy expanded by 5.7 percent in the first half of the year despite slower world growth.
The
central bank says the growing political tensions will cut growth for
the second half of the year, but says the damage should be short-term.
