By Dr Arno Maierbrugger
The protests in Thai capital Bangkok in the last week have once more shown the political volatility of the kingdom and the suboptimal government strategies to bring the regionally comparably wealthy country forward. While Inside Investor in the past has recommended Thailand as a major Asean hub for Gulf investors, circumstances have changed. The two years of the current government being in power has shown a massive deterioration in both political governance – corruption levels have never been that high – and in economic strategy.
No wonder that countless investors have been pulling out, causing the Thai baht to plunge once more to record-low levels. Tourism bookings decreased after as much as 23 countries issued travel warnings for Thailand due to the recent protests. The country also stands to lose international trade and exhibition event bookings for the next year or two as organisers look elsewhere, deterred by images of demonstrators rallying across Bangkok.
Thailand’s formerly strong rice sector, a major pillar of the economy, has been hit by questionable and improvident subsidy policies introduced by the current government to keep farmers loyal, with the Prime Minister openly admitting in parliament on November 27 that during her tenure she never attended meetings of the strategically important National Rice Policy Committee although she is the chairwoman.
All this puts crucial food security programmes that have been initiated in the past years, especially with Gulf countries, on stake. The Thai central bank also surprisingly cut the key interest rate for a second time in 2013, as the escalating anti-government protests threatened investor confidence and local demand, further hurting the nation’s growth outlook. Export growth of the country with its important output of automobiles, electronics and food products is now almost flat amidst a thriving region, another example for mismanagement and a run-down economy.
Adding to this is the absolute confusion about how things could move forward. It has become harder to keep track of who the good guys and who the bad guys are - Red Shirt, Yellow Shirts, Democrats, Royalists and so on, and of course the Shinawatra family policies, a strategy also called “Thaksinomics” after Dubai-exiled former Prime Minister Thaksin Shinawatra, the elder brother of incumbent Prime Minister Yingluck Shinawatra.
Thai people are beginning to feel that they have been held dumb for so long, and this makes it much easier to take to the streets and seize ministries in anger. But the main problem of the country literally committing economic suicide is that there is no alternative to speak of – the opposition is weak and also corrupt, and the proposed new “people’s government” of experts will remain just a pipe dream.
Thailand needs real leaders, accountable personalities at the top to bring its mess in order, because good results depend on how a leader acts. Unfortunately many in Thailand’s elite are too stubborn to realise this fact.
l Our columnist Dr Arno Maierbrugger is Editor-in-Chief of www.investvine.com, a news portal owned by Inside Investor focusing on Southeast Asian economic topics as well as trade and investment relations between Asean and the GCC. The views expressed are his own.
