Thailand’s Woes

At least thirty-five Thais were wounded on Saturday, Feb 22nd after gunmen attacked an antigovernment rally in Trat province, including a five year old girl. Bangkok fared poorly as well: 12-year-old boy and a 40-year-old woman were killed after a bomb attack at an anti government rally, held at a shopping mall.

It’s been a bloody weekend in Thailand, and the recent influx of violence highlights an uncomfortable point: the tense political situation here between the ruling regime of Thai Prime Minister Yingluck Shinawatra and the opposition People’s Democratic Reform Committee shows little sign of getting better.

2014 may prove to be a decidedly interesting year for the Southeast Asian peninsula. Which means that, complex as it may be, it’s worthwhile for outside observers to get a handle on the potential impacts of Thailand’s recent tumult for the country and the region. 

Economic growth in Thailand, usually robust, is showing signs of strain after three months of increasingly intense rancor towards the reign of Yingluck Shinawatra. The Thai GDP grew by only 0.6% in the fourth quarter, a considerable drop from the 2.7% growth seen in the third quarter. 

A February report released by US ratings agency Fitch notes that Thai business confidence is reaching levels as dismal of those seen during the all-pervasive flooding of 2011, as now-spooked foreign investors begin to retreat from the stock market and evaluate other regional options. Consumer confidence is also low and getting lower, reaching a 26-month low in January .

The damage to tourism is especially worrisome to Thailand, which works overtime to project its image as a friendly, exotic destination for travelers from all over the world — and accounts for 10% of the country’s GDP.

Thanks to a spate of tourism warnings issued by foreign governments, the Tourism Council of Thailand estimates it lost $685 million in revenues in the month of January alone. As the political gridlock continues, it’s unlikely tourist arrivals will bounce back any time soon.

What are the tourists, eager to lie around on Thailand’s beaches, going to do with their Southeast Asia-bound vacation time instead? Likely pay a visit to the equally lovely climes of Malaysia and Indonesia, postulated Credit Suisse analyst Santitarn Sathirathai in a Wall Street Journal blog. The same goes for the conventions and international business get-togethers often slated to take place in Bangkok and on Thailand’s islands.

As the political deadlock grinds on, major trading partner China is keeping a wary eye on Thai affairs. China’s decision to pull out of a plan to buy 1.2 million tons of rice due to a continuing graft probe has done considerable damage to Shinawatra’s ruling party — which needs the support of its agricultural, working-class base more than ever.

Thailand’s descent into full-bore political unrest has not gone unnoticed in neighboring Cambodia either, embroiled as it is in its own election controversy between an ostensibly democratic opposition, and the long-time regime of Prime Minister Hun Sen. Exiled former Thai Prime Minister Thaksin Shinawatra is a friend of Hun Sen, a connection hat has raised eyebrows from nationals of both nations. Already, accusations have been bandied about that a shadowy Cambodian gunman was behind the shooting death of Thai Democratic protester Sutin Tharatin at the end of January.

International affairs junkies may wish to keep an eye on Thailand and Cambodia as spring begins. And, perhaps, take a careful look at their plans for an exotic vacation.


Image credit: Global Voices Online Bangkok protest against the Amnesty Bill. Photo by George Henton, Copyright @Demotix (8/7/2013)