When Will Thailand Recover?
Posted by jonathanfryer on Monday, 15th December, 2008
At the LI/FNS conference in Bangkok over the weekend, our Thai hosts were confident that recent events will not have a lasting knock-on effect on the country’s economy and international reputation, but as I made clear in my own presentation to the gathering, I am not so sure. The televised scenes of the airport occupation earlier this month have proved to be a serious disincentive for tourism. Hotels and travel agents around Thailand report mass cancellations and unusually low occupation rates for what should now be the peak season. I suspect that it will take months before that situation improves, if then. And if there is any repeat of airport occupations or mass street sit-ins by the PAD (or indeed by former PM Thaksin’s red shirts), the consequences could be catastrophic for the Thai economy.
Foreign investors were already becoming cautious before the airport invasion, not just because of the global financial system but also because of the slowing of Thailand’s own economy, which is no longer as tigerish as it was. The Democrat Party politicians have every motive to be upbeat. But the new government that is due to take over today has a massive task ahead to rebuild confidence abroad, let alone with its own people.