Thai business leaders express concern over political instability

Jitters are escalating among the business community in light of the Constitutional Court’s directive yesterday calling for the temporary removal of Pita Limjaroenrat, head of the Move Forward Party (MFP), from his role as a member of the House of Representatives. This development marks another detrimental blow for Pita, notwithstanding his party’s extraordinary election accomplishments, spurring fears of an imminent rise of extensive street demonstrations.

Central Restaurants Group (CRG) President, Nath Vongpanich, asserted that while politics doesn’t primarily dictate the growth of their restaurant and beverage venture, an expedient installation of a fresh prime minister for efficient national administration is something he contends for. He remains steadfast in his belief that a stable political environment is vital in securing foreign investments.

Praphon Potivorakhun, Deputy Managing Director at Mitsubishi Electric Kang Yong Watana, a Thai-Japanese corporate partnership that handles the distribution and marketing of Mitsubishi electrical goods, voiced concerns about the potential for street protests. He is apprehensive that these demonstrations could inadvertently hamper the nation’s stride towards economic recovery.

“Domestic economic slowdown and an unstable political situation will likely deter foreign investment in Thailand.”

The Federation of Thai Industries (FTI) Chairman, Kriengkrai Thiennukul, anticipates that the Pheu Thai Party will head the new government and kickstart or renew strategies meant to spur the economy.

“It is very difficult for Pita to secure enough support from parliament to be the new prime minister, following his unsuccessful bid in the first parliamentary voting last week.

“The latest order issued by the Constitutional Court to suspend Pita from duty as an elected member of the House of Representatives will further reduce his chances and cause a change in Thailand’s political scene.”

Kriengkrai predicts that under these political conditions, a candidate for the role of prime minister representing the Pheu Thai Party will be recommended and will ultimately secure the highest post in the administration.

Despite this, Kriengkrai conveyed that he does not fear this shift as long as the timeline in which to establish the new government adheres to the planned schedule. The FTI is confident that Thailand will see a new head of government by the time the third parliamentary vote comes around.

On the other hand, he cautioned that any delays in the formation of the government sparked by political conflicts, including street protests from Pita’s supporters, would be a grave concern. Under such circumstances, plans for new investments and the budget preparations for the upcoming fiscal year are expected to be impacted, he elaborated.

According to Kriengkrai, many from the business industry are keenly waiting to ascertain who will comprise the new government and the policies it will adopt before making decisions on their investment projects. He emphasised the urgency for Thailand to accelerate budget planning processes to jumpstart schemes intended to invigorate and restore the economy. He added that the business sector is hoping to avoid street protests as it affects the reviving tourism industry amidst a decline in the Covid-19 outbreak.

Asia Plus Securities (ASPS) suggested that there will be much more clarity in the political landscape once the new government takes the helm and begins its work. The brokerage said…

“The political situation is becoming more predictable, so the SET index has a more limited downside. If the Pheu Thai Party and the original eight-party coalition forms a new government, the SET index is predicted to be at around 1,545-1,560 points.”

As of the past three days, Thailand has seen a three-day net inflow of funds worth US$114 million, or 3.9 billion baht, while the SET index rose 41 points, or 2.97% to 1,535.3 points.

Prakit Siriwattanaket, Managing Director at Merchant Partners Asset Management, said…

“In my opinion, there will be implications in politics, economics and investment. The Pheu Thai Party is expected to lead the new government’s formation while the MFP will turn into an opposition party. The new government will stay for up to four years.”

Visit Limlurcha, president of the Thai Future Food Trade Association and honorary president of the Thai Food Processors Association, stressed the importance of prompt formation of the government, independent of who is elected as Prime Minister or the party factions shaping the new government.

He highlighted the firm’s concerns that prolonged delays in government formation could detrimentally affect state projects and investment budgets pending the new government’s approval, reported Bangkok Post.