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A hopeful Thai economy amid political crisis?

Updated On: Jul 04, 2006

In contrast to the widespread belief that the current political crisis in Thailand is detrimental for the economy, the situation may not be as dire as many predict, thanks to the stabilizing force of the Thai monarchy.

Viboon Kromdit, a Thai businessman, noted that “foreign investors are confident that the monarchy existence will help lead the country through a difficult time”. However, this does not negate the worrying competition neighboring countries such as VietnamMalaysia and Singapore pose to Thailand in the bid for investment capital, adding that the government should work to stem the outflow to such countries.

For the moment, Thailand has clinched a big deal with Iran, securing a preliminary agreement for the annual sale of 3 million tons of liquefied natural gas to PTT Exploration & Production Plc., Thailand’s second-biggest natural-gas producer.

Iran is said to have expressed intention of increasing investment in the Thai petrochemical industries, with the potential of crude oil exports in the future, while Thai investors are eager to invest in South Pars gas field of Iran. It is hoped that such actions will help further mutual cooperation in the energy sector, the Thai energy minister Viset Choopiban said to the media.This is good news for Thailand in the midst of all the political turmoil and unrest in the South. Caretaker Prime Minister Thaksin Shinawatra has made a last-ditch attempt to unify the country, calling on all Thais to heed His Majesty the King's message for peace and reconciliation in his radio programme. “This year is an auspicious year. If Thai people are happy, His Majesty will also be happy. If we want His Majesty to be happy, we should think good thoughts and do good things and adhere to His Majesty's message given on June 9. And I believe the country will return to unity and become strong again,” the Nation reported.

Unfortunately for Thaksin, he is perhaps engineering more public suspicions than uniting the country.

Former foreign minister and leading Democrat figure, Surin Pitsuwan, has accused Thaksin of driving Thailand “closer and closer to a banana republic”, the Bangkok Post reported. He added that there are “no accepted standards of political activities that would give people assurances and confidence that their interests would be protected, that their participation would be welcomed and guaranteed and that there would be fairness and justice in the system”.

In view of Thaksin’s revival of his talk-show, an Abac poll revealed that 45% of the 1,231 residents of Bangkok and surrounding provinces polled disapproved of such a move, saying it was tantamount to campaigning. Another 47% felt that Thaksin was hurting the country by insinuating that a certain public figure was planning to remove him from office.

Sources:

IranThailand sign preliminary deal on export of liquefied gas (Bloomberg/ Financial Express, 2 July 2006)

Foreign investors still have confidence that Thailand will sail through a difficult time (Thai News.com, 2 July 2006)

Iran approves gas exports to Thailand (Bangkok Post, 2 July 2006)

Thaksin calls for heeding of HM's message for national reconciliation (The Nation, 2 July 2006)

Plan to end political crisis proposed (Bangkok Post, 3 July 2006)

Surin utters the B-word (Bangkok Post, 3 July 2006)

PM's accusation not good for country: poll (The Nation, 3 July 2006)