Street protest keeps Japan investors away

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June 8, 2012 – Japanese investors view the political situation as being fairly stable for the time being, but they say the ongoing tensions should not be allowed escalate and have an influence on the Thai economy.

Tsuyoshi Morishita, manager for international business promotion at the Economy, Trade and Industry Ministry’s Kansai Bureau, said Thailand has basically been quite stable over the past few years, with the notable exception of 2010, when there was a major conflict between the yellow shirts and the red shirts.

“Political tension is normal. However, if it continues, then the Thai economy will be badly influenced,” he said.

For example, if tourism is affected by politics, then the Thai economy could be hurt.

Despite political changes in the past, the Thai economy has not been harmed, and after last year’s severe floods the Thai economy recovered quickly, said Mr Morishita.

“Japanese companies are looking to have manufacturing bases in Thailand, as production in Japan was damaged by the earthquake and tsunami. Some companies are moving from China to Thailand on concerns over the slowing of the Chinese economy,” he said on the sidelines of a seminar jointly hosted by the Federation of Thai Industries (FTI) and the Japan External Trade Organization (Jetro) in Bangkok.

Naoto Oichi, general manager of Hitachi Zosen, said Thai politics are quite stable.

“It’s okay at the moment, but we still don’t know how the situation will change,” said Mr Oichi, who has lived in Thailand for eight years.

For the time being, there is no concern about the political situation among Japanese companies operating in Thailand, he added.

“Now they are worried about the possibility of floods again this year, more than politics.”

Companies whose factories are located in Ayutthaya and Pathum Thani are worried that flood protection walls will not be completed before the rainy season arrives, he noted.

Mitsuo Inoue, deputy general manager of Hitachi Zosen, said despite current opposition to the national reconciliation bill, the political situation in Thailand is the best in years.

“We are only concerned that some projects and policies might be affected if there are any political changes,” he said. “Changing the person in charge of a project causes difficulties for investors in terms of who to contact.”

The Kansai-Asia Environmental and Energy Saving Business Promotion Forum is a cooperative effort involving more than 170 companies from the Kansai region, the FTI and Jetro Bangkok.

The Kansai region is in south-central Japan and includes Osaka and Kobe.

The Thai parliament’s efforts to push reconciliation bills hit a snag this week after the Constitutional Court put the brakes on a third reading.

The assembly will meet today to decide whether to proceed with the deliberation.

Whatever the outcome, street protests are possible, according to observers. – The Bangkok Post