Coup: Minimal economic impact “if no violence’

BANGKOK (The Nation): The business sector anticipates short-term negative impact from the coup d’etat, but expect the longer-term economic direction to be clearer with diminishing divisiveness in society and that should be in favor of local and foreign investors.

Charlotte Dhonavanik, First Senior Executive Vice-President at the Bank of Ayudhya, said that from the Administrative Reform Council’s (ARC) first announcement, things seem to be wrapped up in a quick manner.

“There should be no violence, unlike in previous incidents. Once it’s clear, this should not affect foreign investor confidence,” she said.

A banker, who asked not to be named, wanted the Administrative Reform Council to make clear who was going to run key ministries, especially the economic ones.

“In previous coups, the list of economic ministers were announced. If the reform group could come up with the list, this should restore confidence in the economic sector,” he said.

Dusit Nontanakorn, Secretary General of the Thai Chamber of Commerce, said last night it was too soon to comment on this incident, but the chamber was closely monitoring the situation.

“I still hope other countries would understand what happened here, and that the situation should return to normal in the short term,” he said.

A stock analyst expected retail local investors to unload their shares today on panic selling, but it was unlikely foreign investors who had bought into Thai stocks recently would sell.

“Naturally, a coup is not good for the economic environment. But now it’s clear that the ARC has no intention to be the absolute power controller and it will push for the election. This should calm investors, aside from the fact that with the emergence of the reformist group, the economy is headed towards a clearer path,” the analyst noted.

Somchai Phakapaswiwat, a political science lecturer at Thammasat University, noted the coup would return peace to society after a year of divisiveness.

“We should expect the formation of an interim government, which should be in power for about a year.

“Once the election is held, the economy should be back to normal,” he said.

A lawyer, who asked not to be named, added that the coup would not have a further negative impact on the economy, as the atmosphere has been unfavorable for a year. Foreign investors have already delayed their investment here, thus, this should have no impact, he said.

Kanokwan Wongwatanasin, CEO of ISSP Internet Solution and Service Provider, agreed the coup was unlikely to hurt business sentiment now that the economy was gearing towards a clearer path.

“This is okay as long as there is no violence. The quicker, the better. Certainly, business will move up as usual,” she said.

Phuket News
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