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Main page content: Thai businesses pressure PM to relinquish power By Amy Kazmin in Bangkok Published: March 17 2006 01:10 | Last updated: March 17 2006 01:10 Over the last two days, Thaksin Shinawatra, Thailands prime minister, has given conflicting signals about how he intends to resolve a political impasse now threatening to evolve into a full-blown constitutional crisis. ADVERTISEMENT
After hinting on Wednesday that he might be willing to stand down from office temporarily to defuse the tangled situation, Mr Thaksin yesterday insisted he would not capitulate to the tens of thousands of people, mainly middle-class Bangkok residents, who have taken to the streets to demand his resignation. The talk of the town is that I am about to bow out, that Im giving up, resigning. How can I do that when so many people turn up to give moral support? the defiant premier told 50,000 of his cheering supporters in north-eastern Thailand. Only a man who is out of his mind would bow to mob rule.
Timeline: Thaksins troubles - Click here But pressure on the premier is mounting and not just from protesters on the streets. Thailands influential business community increasingly concerned that a prolonged period of political uncertainty could affect their fortunes has also begun to break its silence, calling for Mr Thaksin to resign to avoid damaging the economy. I really feel that the situation would be better if Thaksin steps back and asks someone who is capable to work as the prime minister, and then he can work as a think-tank, Vikrom Kromadit, chief executive of industrial estate developer Amata Corp, said yesterday. If he did this, it would make peace and save the country a lot of trouble. Mr Vikrom is not alone. This week, the vice-president of the Federation of Thai Industries and the president of the Thai Contractors Association both publicly suggested the premier take at least a temporary break from politics to ease tensions that are now eroding consumer and investor confidence. In depth: Thailand political crisis Click here Mr Thaksin apparently still hopes that winning a fresh mandate in April 2 elections would restore his legitimacy, damaged by his familys sale of Shin Corp, the company he founded, to Singapores Temasek Holdings. But many Thai business leaders are sceptical, given an opposition boycott of the vote. While a one-party parliament would have little credibility, low voter turnout could mean the poll fails to deliver a full parliament, triggering a constitutional crisis. If Mr Thaksin insists on being prime minister after the next election, I think there will be a lot of trouble, Mr Vikrom said. It will be the same as today. Thai businesses are already putting fresh investment on hold, while banks are slowing down new loans. Hotels and restaurants gripe that they are already feeling the pinch as Thais, and some foreign tourists, put off trips, amid warnings about the potential for political violence. Singaporean property companies, fearing a backlash against them, are also reported to be delaying planned investments. In spite of these anxieties, foreign stock market investors have so far remained relatively calm, expecting a quick resolution to the drama without lasting economic damage. There has been little outflow of foreign funds from the stock market, and the baht has remained stable. Hugh Young, managing director of Aberdeen Asset Management Asia, predicted Thailands equity market would wobble in case of a failed election, but he said investors were unlikely to rush to the door. However, a regional economist at an international bank said investors perceptions could change sharply if the political uncertainty looked as though it would be prolonged. Thailands business community, and many foreign investors, were supportive when Mr Thaksin came to power in early 2001, promising to rev up an economy still sputtering after the 1997 economic crisis, and a painful IMF structural adjustment programme. The premier, founder of Thailands largest mobile phone company, promised to boost Thai competitiveness to help local companies prepare for intensified global competition, and he packed his cabinet with members of some of the countrys largest business families.
Since then, some Thai business owners and executives have become more ambivalent about Mr Thaksin. They are resentful about what they as perceive as the governments tendency to direct spending and projects almost exclusively to companies directly linked to Mr Thaksins administration. But while they may be deeply divided over Mr Thaksins fundamental merits as a leader, most Thai executives are increasingly united in their desire for a swift end to the tensions. Most people think that the election wont solve the problem, said a prominent member of Thailands business community. They now seem to be reconciling themselves to the fact that it probably is inevitable that Thaksin will go. Even people who are not antipathetic towards him are saying, How can things go on like this? Its lousy for business. Additional reporting by John Burton in Singapore EMAIL ARTICLEPRINT ARTICLEMOST POPULAR
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