EABC on the Economic Impact from Current Events in Thailand
Bangkok, 12 December 2013– In view of recent announcement by the Prime Minister of Thailand to hold a general election in February 2014, the EABC wishes to state the following:
The timing of the dissolution of the parliament is not ideal for Thailand since the Thai-EU Free Trade Agreement is currently being negotiated. Considering the economic situation in Thailand with low growth it would be extremely beneficial for the Thai economy if this FTA could be concluded quickly since this will benefit Thailand greatly and jump start the economy. Thailand is losing precious time and may even fall behind their ASEAN peers, some of which are also in FTA negotiations with the EU.
European corporations have considerable investment in this country and we would like to see Thailand grow stronger and take opportunities to become the economic hub with ASEAN.This may be at stake with the ongoing demonstrations and the call for an appointed government.
Those companies operating in Thailand for a long time may still understand the underlying political factors, but new investors viewing media coverage of the conflict on a daily basis will certainly be discouraged to invest in this country or at least postpone their investment projects. Therefore, the political crisis comes at an inopportune time.
EABC can only hope that negotiations amongst the various factions can come to positive conclusions while we fully support the Thai Chamber of Commerce to act as mediators.
If history can serve as guidance, neither 2008 nor the 2010 appointed governments could solve the political impasse or bring the country forward economically. On the contrary, more divisions developed and the economic growth slowed. At the same time, Thailand was isolated from the international community because it was considered an undemocratic country. This should be avoided under all circumstances as it will not serve Thailand well and will stop the economic development.
Large participation of common people at peaceful demonstrations during the last several days apparently indicates that democracy in Thailand has not failed but grew stronger.Therefore, we need to ensure that more transparency in government procurement projects is guaranteed and the fight against corruption is strictly enforced. This has been stated by many corporations as a major obstacle for investment in Thailand.
Liberalisationof the service sector is important to greatly improve the life of ordinary people and create new employment opportunities. This will enable Thailand to be more competitive and attractive for foreign investors.But this can only be achieved if Thailand remains a free and open society with democratic footing – anything else will create difficulties to the economy.
EABC strongly encourage Thai people to discuss way to find compromises out of the current crisis. We as European businesses therefore strongly support the initiatives by the Thai Chamber of Commerce to act as mediators for the opposing parties.