Strained Optimism Prevails on Thai Economy With PM-Thailand, Bjt
BANGKOK, Thailand (AP) _ Four days of street battles threw a scare into Thailand’s business community, and the potential for economic ruin probably was a big factor in the political compromise that put Bangkok back to work today.
Thailand has one of Asia’s fastest-growing economies, and the generals who run the country also sit on the boards of some of its largest corporations.
″I think the economic devastation that people faced was a sobering reality,″ said David L. Hendrix, Citibank’s corporate officer in Thailand. ″The government didn’t want that to happen.″
Even King Bhumibol Adulyadej, a revered symbol of unity, warned Prime Minister Suchinda Kraprayoon and his rival, pro-democracy leader Chamlong Srimuang, in a televised lecture that the economy had suffered ″inestimable damage.″
″If this goes on, it will put the country in great danger, making Thailand a meaningless country,″ he said.
The stock market, after plunging close to its limit on Tuesday, when the unrest was at its height, soared today on investor euphoria after the announced compromise, traders said.
The widely used SET stock average jumped 8 percent, ending slightly ahead of last Friday’s close prior to the violence. Under government regulations, the maximum any stock can rise or fall in a day is 10 percent.
With Suchinda still in power for the moment, and the smoke from four days of violence barely cleared, the longer-term economic effects of the crisis were unclear.
Foreign investors, most of them used to dealing with political unrest in Asia, were generally expected to shrug off the unrest.
The $4.5 billion tourist industry, already suffering from such image problems due to pollution and an AIDs-devastated sex industry, was dealt another body blow as flights were diverted to Singapore and hotels emptied.
But as several observers pointed out, Thailand has been rocked by political unrest before; it rarely obscures the country’s enduring charms for visitors.
″We keep coming back because of the Thai people. The people will remain the same,″ said Pat McGowan, a tourist from Australia who has visited Thailand eight times.
Overall, the mood was one of strained optimism. Several analysts said they foresaw no significant setback for forecasts of vigorous 7 percent to 9 percent annual growth in the 1992-96 five-year plan.
Some used the example of the swift rebound of investors to China after the 1989 crackdown on pro-democracy demonstrators there.
″Everybody has been pointing out how quickly things turned around even with the political situation over there unresolved,″ said Korn Chatikavanij, managing director of Jardine Fleming Thanakom Securities.
In Japan, swiftly becoming Thailand’s largest foreign investor, a spokesman for the Trade Ministry said most businesses view the situation in Thailand as relatively stable. He did not foresee any immediate drops in investment.
″Thailand is more stable than Indonesia and the Philippines, for instance,″ said the spokesman, Yuji Hosoya. ″That image is not going to change with this one event.″
One concern, however, is that Thailand would lose another step in the furious competition among Southeast Asia’s fast-developing economies for foreign capital.
″Our neighbors Malaysia and Singapore are probably having a field day with regard to news coverage,″ said Korn. ″I don’t blame them. A lot of money has gone into the Malaysian stock market in the last few days.″
Other economic assessments were simpler. Almost no private property was touched by the demonstrators, who focused their anger on emblems of government like traffic lights, bus stops and street signs.
No damage estimates were immediately available.
″We’ve had these sort of hiccoughs in the past in Thailand,″ said Hendrix. ″The government technocrats have always been able to pick up the pieces and get on with it.″