6 June 2024

Several of Thailand’s business leaders are expressing concern over political instability. A new government has still not been formed since the general election in May. The business community is asking for stability in politics, claiming that continuation of the current impasse could destroy the confidence of foreign investors.

Two months after the election it remains unclear who will become the country’s 30th prime minister, since the bicameral parliament empowers senators to join the vote for the prime minister.

The current political turmoil is affecting foreign investor decisions over put more money into Thailand. The Former Chairman of Joint Foreign Chamber of Commerce, Stanley Kang, emphasised the need to have a clearer picture as soon as possible.

Stanley told Thai PBS World today (Tuesday) that the business community cannot wait endlessly. “Each party should put the interests of Thailand and Thai citizens ahead of party interests. The private sector expects to see the next government being formed in a month, since issues regarding Thailand’s economy and geopolitics need to be solved promptly. No matter which party becomes the ruling party, the private sector is ready to cooperate.”

What foreign investors want to see is a smooth and fast transition, according to President of American Chamber of Commerce, Mook Pibuldham. They want to see the winning majority form the government, “because the strength of the government leads to political stability for the next 4 years,” Mook explained.

Mook also stated that the new government needs to address multiple issues, including high household debt and electricity costs. “As we speak, household debt is already 90.6% of GDP. The rise in electricity costs is significant, too. Right now, foreign investors are paying for electricity at double the rate in Vietnam and 3 times higher than in Malaysia. How can companies in Thailand, not only foreign investors in Thailand but local companies too, be competitive in the international market?’’

 

President of American Chamber of Commerce, Mrs. Mook Pibuldham

In addition to domestic issues, President of European Association for Business and Commerce, Mr. Farid Bidgoli stated that political stability is the significant factor in maintaining sustainable cooperation between the EU and Thailand. “In September, or sooner, we will have a government formed in Thailand, hopefully. We hope it’s a sustainable government, which is elected, and that there aren’t any challenges, since that would delay free trade negotiations”.

President of European Association for Business and Commerce, Mr. Farid Bidgoli

With the backdrop of Thailand’s political chaos, the Bank of Thailand has published its forecast for this year’s GDP growth, between 3.6% and 3.8%. Associate Professor Dr. Thanawat Pholvichai, rector of the University of the Thai Chamber of Commerce, however, predicts detrimental consequences if Move Forward leader Pita Limjaroenrat and his party were to be disqualified and disbanded.

“Thailand can expect see a sharp drop in tourist numbers, of about a million arrivals per month, and a whopping loss of about 500 billion baht in tourism revenue, while the GDP may shrink by 1%.”

 

By Franc Han Shih, Thai PBS World