More Trouble ahead for Thailand

Posted by: Frederik Balfour on April 17, 2009

It has been an incredibly tense seven days for Thailand. First protesters forced the cancellation of an 18-country summit meeting in the resort of Pattaya on the weekend, where several ASEAN leaders had to be evacuated by helicopter. Then Prime Minister Abhisit Vejjajiva declared a state of emergency, and while two anti-government demonstrators died in clashes with opponents, by mid-week it seemed as if order was being restored. But on Friday morning at 5:00 a.m. Sondhi Limthongkul, a media mogul and supporter of the prime minister, was wounded in a dawn raid on his car by would-be assassins toting AK-47s and M-79 grenades.

Though no-one has claimed responsibility for the attack, this latest spate of violence sends a chilling message to Thais and foreigners alike that the Land of Smiles is becoming an increasingly unstable place. That spells trouble for the battered economy that is likely to shrink as much as 5% this year. Tourism is likely to get hit hard, after barely recovering from a disastrous December when protesters shut down Bangkok’s two airports for days, eventually succeeding in the ouster of then-premier Somchai Wongaswat. Investors, both foreign and domestic, have been waiting on the sidelines too, unwilling to move ahead with new projects until the political situation is resolved. Merrill Lynch predicts the tourism sector could see 257,000 people, more than 10% of the workforce, lose their jobs this year.

Unfortunately, resolution looks increasingly difficult to imagine. The polarization of Thai society between an urban elite who support Abhisit, and the rural masses who support former populist prime minister Thaksin Shinawatra, who was deposed in 2006 in a bloodless coup. Thaksin has been living in exile shuffling between Britain, Dubai, and soon, Nicaragua, which has just granted him a passport. (His Thai passport was revoked this week.) But his supporters, the so-called Red Shirts who are behind the current unrest, are unlikely to give up and go home, especially as long as Thaksin continues transmitting his regular broadcasts from abroad.

Post a comment

 

About

Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

BW Mall - Sponsored Links

Buy a link now!