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Economic outlook positive despite coup

Legacy Phuket Gazette



PHUKET: Business and economic leaders have expressed confidence in the economy despite the uncertainty surrounding the direction the National Council for Peace and Order (NCPO) will take in the coming weeks and months.

The heads of several leading property development companies, including Italian-Thai Development Plc, Sansiri Plc and Land and House Plc, all of which have large projects underway or slated for Phuket, were ordered to report to the NCPO on May 25.

Since then, two of the companies have released statements that none of their projects have been affected by the coup and will continue as scheduled.”Sansiri Plc will continue normal business without
any effect on operations.

Chief Executive Officer Apichart Chutrakul and Chief Operating Officer Wanchak Buranasiri, along with other high-level executives of the company will perform their duties as usual,” said the statement released by Sansiri.

Anant Asavabhokhin, chairman of the executive board and chairman of the board of directors at Land and Houses Public Co Ltd was also called to report to the council.

Land and House General Manager Ruksaspong Khumkhuanjum, subsequently told the Gazette on Tuesday that the company’s projects would would not be affected.

“Mr Anant was called by the NCPO. For what reason, I have no idea. However, our projects are ongoing as is. All the investments are on the way, including current projects and others,” he confirmed to the Gazette.

The third developer to be called was Premchai Kamasutra, president of Italian-Thai Development Plc, the contractor for the Thainan underpasses currently being built on the bypass road. However, no Ital-Thai statement was available as this story went to print.

Property agencies unfazed

Leading property agencies Jones Lang LaSalle and Frank Knight have also expressed confidence that the property market would not suffer in the wake of the coup, saying that the industry had weathered similar events in the past with little or no negative effects.

“Our discussions with clients and business partners, including property developers, investors and corporate occupiers, showed that the coup came as no surprise,” Jones Lang LaSalle Managing
Director Suphin Mechuchep told The Nation on Tuesday.

“Similarly, since the political tension escalated late last year, we have seen developers, owners, investors and occupiers becoming more cautious, with some of them adopting a wait-and-see approach. There remains no clear evidence of the coup changing the situation at this stage,” Mr Suphin said.

Frank Khan, executive director and head of residential for Frank Knight’s Thai unit, said that the political crisis in Thailand is currently not a big deal for the property business, and that things were difficult in the first four or five months of the year and the real-estate market was soft, but the situation is gradually improving.

“To look on the bright side, the political unrest has been beneficial in that the condominium market has cooled down, reducing the likelihood of an oversupply,” he added.

Economic road map

Meanwhile, seven key private-sector organizations are drawing up an economic road map comprising short and long-term reform plans to be presented to the NCPO in a bid to help restore economic confidence in the Kingdom, reported The Nation.

The groups are the Thai Chamber of Commerce/Board of Trade, Tourism Council of Thailand, Thai Bankers’ Association, Federation of Thai Industries (FTI), Federation of Thai Capital Market Organizations, Stock Exchange of Thailand and Thai Listed Companies Association.

“The most important thing right now is to find ways to bring back confidence in consumption, investment and tourism. Each organization has also been tasked with coming up with a plan to enhance the country’s competitiveness for the next 15-20 years,” said Isara Vongkusolkit, chairman of the Board of Trade.

Supant Mongkolsuthree, chairman of the FTI, said there were seven frameworks within the road map. They include plans to increase the country’s competitiveness, enhance public and private investment, promote education and innovation, lessen social and economic inequality, fix corruption, reform regulations and create a new economic structure.

Banks praise rice payments

Other signs of economic confidence increasing after the NCPO’s breaking of the political deadlock include the rapid payback of rice farmers involved in the troubled rice-pledging project. Payments have already started to flow, enabling farmers to pay back debts and put money towards next year’s crops.

Commercial banks have expressed strong interest in bidding for a multi-billion-baht bridging loan under the rice-pledging project, as they believe the payment of long-overdue money to farmers marks the first step in fueling the sluggish economy.

Their interest comes after the Finance Ministry invited 32 state and private banks to bid for the first phase of a three-year program of bridging loans, totaling 50 billion baht, to the Bank for Agriculture and Agricultural Cooperatives (BAAC), so that rice farmers can be paid.The first 30-billion-baht tender will take place on June 6, while a second is scheduled for June 13. Vasin Vanichvoranun, executive vice president of Kasikornbank, told The Nation on Tuesday that, assuming legal issues surrounding such lending were fully clarified, the bank should have no problems about participating in the bidding.

“Rice payment [to farmers] is a good way to fuel the economy. However, we also have to pursue other projects, including infrastructure projects, which have not been announced yet,” he added. Other leading banks have expressed optimism that since the political impasse is over, investment funding for public infrastructure will begin to flow, boosting the economy.

Chansak Fuangfu, director and senior executive vice president of Bangkok Bank, said they were awaiting signals from the NCPO on such public infrastructure funding.

“What the bank has to monitor is additional public investment projects, which will fuel the economy significantly. We are awaiting the upcoming economic road map from the National Council for Peace and Order,” he said.

Arthid Nanthawithaya, senior executive vice president of Siam Commercial Bank, said a positive sign for the economy – and for boosting private-sector confidence – is the fact that the NCPO has announced it will give importance to public investment, and especially to major infrastructure projects.

— Chutharat Plerin / The Nation


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