Thailand protests crushing for tourism, business, economy: experts

Crippling protests that shut down Bangkok’s airports will be crushing for business relations, tourism and the economy in Thailand, once hailed as a beacon of stability in the region, experts say.

Bangkok’s gleaming two-year-old Suvarnabhumi international airport and the older Don Mueang domestic airport were taken over in the past week by thousands of followers of a royalist anti-government protest movement.

The closure of the two hubs has paralysed Thailand, stranding more than 100,000 passengers, costing the kingdom millions of dollars in exports and tarnishing the nation’s reputation.

Media images all over the world show forlorn tourists sleeping on baggage trolleys, protest militia members armed with wooden stakes, and police seemingly overwhelmed by the lawlessness.

“I’m afraid the image of stability and security, especially in terms of travellers and the overall political climate, will be negative for some time to come,” said international relations specialist Panitan Wattanayagorn.

Ammara Sriphayak, a director at the Bank of Thailand, has said it will likely revise down economic growth projections this year and next regardless of whether the government falls.

“No matter coup or no coup, the incident will affect growth,” she said, adding: “Next year’s forecast at 3.8 percent to 5.0 percent must be revised.”

The most immediate impact will be on tourism, with 30,000 travellers estimated to be prevented from flying out every day and countries around the world urging citizens to stay away from Thailand.

This will be devastating for a country where tourism revenue accounts for six percent of gross domestic product. Last year 14.8 million tourists visited the kingdom.

A state industry body has said Thailand is losing seven million dollars a day in tourism revenue, while Ammara estimated tourist numbers could drop by 3.5 million from projected numbers if turmoil lasts through to December.

Industry, meanwhile, is also expected to take a bashing.

“Thailand loses around three billion baht (85 million dollars) a day in goods exports and imports following the closure of Suvarnabhumi and Don Mueang,” said Tanit Sorat, vice chairman of the Federation of Thai Industries.

“Export orders from other countries are likely to disappear since they cannot wait for shipment delays and will buy from our competitors.”

In the long term, he said, Thai exports will suffer as insurance companies will likely increase surcharges to compensate for political risk.

James McCormack of Fitch Ratings said foreign investors “have taken note of the political turmoil.”

Even before the airport closures, exports and investment were suffering due to the global financial crisis and the long-running protests.

The Thai stock market has fallen about 50 percent since the People’s Alliance for Democracy began its campaign to topple the elected government in May, before recently taking its protests to unexpected heights.

Sandwiched between military-run Myanmar, one-party communist state Laos, and Cambodia — which was gripped by civil war until 1998 — Thailand had been the region’s shining light.

After a coup in 1991 and protests against military rule the following year which left dozens dead, Thailand held elections and although no premier was in the job for very long, a brittle democracy held.

Over the years Thailand turned itself into an economic success story — with the only dark spell during the 1997 Asian financial crisis — billing itself as a key tourism, production and export base.

Then in September 2006 Thaksin Shinawatra — the first premier to serve a full term — was ousted in a coup amid allegations of corruption, heralding two years of turmoil. The current protesters object to the election last December of Thaksin’s allies.

Thailand also must decide whether is will have to postpone a key summit in December of the Association of Southeast Asian Nations — a move Foreign Minister Sompong Amornviwat said Sunday would damage Thailand’s image.

But despite the escalating problems, international relations specialist Panitan said the situation should be kept in context.

“Comparing Thailand to Somalia or Darfur should not be appropriate at the moment — we are not a failed state,” he said.

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