Trying to see where Thailand’s economic future will go requires knowing where to look. The place to look is not at Thailand, you must look at the people from other countries who look to invest in Thailand. You must look at what floats their boat, what pushes their buttons and what flushes their toilet.
Thailand is a country under assault by Thaksin Shinawatra, there is simply no other way to put it. And like anyone being assaulted, resources must be allocated and devoted to fending off that assault. Those resources simply take from something else, and much of that removes the sweetness of Thailand as a place to invest.
There is plenty of other competition in the Southeast Asia region vying for foreign investment. So while one hand is fighting off Thaksin, the other is wrestling with other countries for investors. As a result neither hand is showing its best performance.
Potential investors now see Three possible scenarios as far as Thailand goes. The first is a simple no go and stay away scenario. That one is some how Thaksin wins and Takes over the country and sends the royal family packing. That simply means Thailand becomes toxic for investment because Thaksin will be out of control. It would provide the same environment as Burma, and many companies simply do not need the aggravation and stay away.
The second scenario is much like it has been for the past few years, Thaksin is assaulting Thailand and there is a huge amount of uncertainty as to the eventual outcome. For the most part companies will only sit and wait for only so long. If they do not see some sort of conclusion forming then they will simply select another country.
The Third scenario is new as of Thaksin getting his arrest warrant for terrorism. Prior to that this never was considered. The third scenario being Thaksin is permanently eliminated from the formula. Thailand will be able to redouble their efforts at making Thailand the right choice. In that case Thailand’s economy will simply soar. Work and money will be plentiful all across Thailand. The uncertainty will be eliminated as companies who simply do not want to deal with a corrupt government will flock in.
Connecting the Dots Recognizes this differs a bit from what we said in the past. However the terrorist warrant for Thaksin did not yet exist when we visited this topic in the past. We now feel that there is a much higher chance Thaksin will get to see the inside of jail as his mouth digs his hole deeper. The world that may have been casually watching Thailand had it slammed front and center on the evening news thanks to the Red Shirts. Their performance for the international media as they torched Bangkok and a few other places around the country was plenty enough convincing about Thaksin and his supporters. That is not to mention the children human shields that hit a raw nerve with every parent.
There is little doubt now that neutral opinions and views have shifted to be against Thaksin. That translates to countries moving to arrest and getting Thaksin back to Thailand to face the courts. By not doing so they will face a souring view from other governments.
I think the problem is much deeper than Thaksin. Shortly after the coup took place, we sold all of our investments in Thailand, much to the angst of my wife.
Why? Because this sent a clear message to me that Thailand was not really ready for a true democracy. As bad as Thaksin is, this whole country has been built on corruption. I was already seeing warning signs before the coup, but the coup was the final straw.
I feel like my decision has been vindicated over the course of the past 4 years as I have watched Malaysia, Vietnam, and Indonesia all take steps forward while Thailand moves back. Over the past 4 years I have been putting investments to work in Malaysia as I have watched true reforms take plac.e
These decisions do not come lightly because for one, I am married to a Thai national. Secondly, when I began investing in Thailand in ’97 following the currency fiasco, both Malaysia and Indonesia were complete basket cases.
Do I think Thailand can turn it around? Of course I do. If Indonesia can, then any country can. But I will not be so naive to consistently blame Thaksin for the problems. Until Thailand gets a strong leader, censorship wanes, and the military is willing to take more of a back seat to government, then this will never happen.
Thailand has a number of issues that need to be straightened out and the longer they keep pointing and blaming a single man, they will not be able to get their house in order.
The longer Thailand refuses to look internally as opposed to believing Thaksin is 100% the cause for their woes, Vietnam, Malaysia, and Indonesia will continue to close in on Thailand and perhaps surpass Thailand as the strongest economies in SE Asia.