Bangkok Shutdown: Prolonged crisis in Thailand threatens investment

With the Bangkok shutdown entering its second week, concerns are growing about its adverse impact on the country's investment climate. -- FILE PHOTO: BLOOMBERG
With the Bangkok shutdown entering its second week, concerns are growing about its adverse impact on the country's investment climate. -- FILE PHOTO: BLOOMBERG

BANGKOK: With the Bangkok shutdown entering its second week, concerns are growing about its adverse impact on the country's investment climate.

"If those prospective foreign investors don't understand the situation here, it may affect their investment decision," said Mr Isara Vongkusolkit, chairman of the Thai Chamber of Commerce, according to Bangkok Post.

Mr Rolf-Dieter Daniel, president of the Bangkok-based European Asean Business Centre, said last week that Thailand's prolonged political turmoil may have already spooked prospective foreign investors to switch to other Asean countries.

He said long-term investment, particularly Board of Investment-sponsored projects, may be reconsidered and other locations assessed.

However, Mr Isara said foreign investors who have had a presence in Thailand for more than a decade mostly understood Thai politics and political rallies, Bangkok Post reported.

The chamber has yet to evaluate the long-term impact of the protests, but it cited a recent report by the University of the Thai Chamber of Commerce that estimates consumer spending nationwide will shrink by 5-10 billion baht (S$194.3 million-S$388.6 million) if the shutdown lasts two weeks.

The report projected the shutdown would result in economic losses of 700 million to 1 billion baht per day, with consumption dropping by about 500 million baht a day and tourist spending dipping by 200-500 million baht a day.

If the shutdown lasts a month, consumer spending may contract by as much as 40 billion baht, affecting gross domestic product by 0.1-0.2 per cent.