Bangkok
04 December 2008
Bangkok's international airport is returning to normal, after protesters shut it down for eight days. But business experts say the economic damage caused by the country's political crisis may linger for some time. VOA's Kate Pound Dawson reports from Bangkok.
Within a few days, cargo and passengers should be flowing normally through Bangkok's international airport. The anti-government protesters who occupied it began leaving Wednesday, after a court barred Thailand's prime minister and his party from politics.
But business leaders in Thailand say the country's reputation has been badly damaged by the occupation, which shut traffic for eight days.
John Koldowski, an executive with the Pacific Asia Travel Association in Bangkok, says that, although tourism has been most immediately affected, problems caused by the airport's closure spread around the country.
"I think the ripple effect is beginning to be felt now, because the freight's affected as well. So you're looking at produce that can't be shifted out of Thailand. You're looking at produce that can't come into Thailand for consumption. It's now starting to be felt right across the wider society," said Koldowski.
Hotels struggled to accommodate stranded guests while the airport was closed. Now, they are looking ahead to see whether potential visitors have been scared away.
Porntina Tangsajjavitoon - the communications director for the Accor Group, which has 20 hotels in Bangkok - says, so far, the damage is moderate for her company, in part because their rooms stayed filled with stranded tourists. She says only a few bookings for the upcoming Christmas holiday have been canceled.
"It's not as bad as we thought. ?However, the new reservations, we'll probably have to wait and see a little more. Of course, there are some cancellations as well," she said.
However, other hotels are seeing a greater number of cancellations. Some report they may see fewer than half their rooms occupied, in the coming weeks - the heart of the peak tourism season.
Business leaders worry that the damage could be long-lasting and they are concerned because it could be weeks before a new government is installed.
Dusit Nontanakorn, the vice chairman of the Thai Chamber of Commerce, says airport managers worked hard to get flights moving again, but more must be done now to help the business community, which already was suffering because of the global economic downturn.
"The private sector and the government officials really have to join hands and work together. We cannot wait until the next government will be coming in," he said.
There is considerable concern that Thailand's political crisis is just on hold and has not ended. Most members of parliament from the banned party have regrouped under another banner and they, along with coalition partners, still hold a majority of seats. If their choice for a new prime minister - expected next week - does not satisfy the anti-government group, protesters may well be back on the streets.
Robert Broadfoot runs Political and Economic Risk Consultancy, a Hong Kong company that assesses business risks around Asia.
"This is not the end of the crisis by any means, I don 't think. It's just moving on to the next chapter. There's still a large number of uncertainties. And, when it comes to businesses like tourism, this is going to be a disastrous high season," he said.
Broadfoot says it will be hard to determine just how much damage the political crisis has done to the economy, compared with the damage caused by the global slump. Foreign investment is likely to shrink and demand for exports will be weak, because of the worldwide financial crisis.
He says one way the Thai government can minimize the pain and help build a foundation for future economic growth is to focus on improving its infrastructure, such as roads and schools.
"Probably the best that could happen now is if they get some sort of agreement in the political process, even if they're going to get revolving-door governments, where you can push ahead with major infrastructure and other programs, at least A., to create opportunities, and B., to create the impression that the economy's not just stuck in quicksand," he said.
Broadfoot points out one advantage to focusing on infrastructure projects is that they are not dependent on foreign investment.
The political uncertainty and the effects of the global economic crisis have factored into the decision by international credit rating agencies to downgrade ratings in Thailand. That means the government and businesses here will pay more to borrow money. However, Thailand's central bank may have eased some of the pain this week, when it surprised financial markets with its largest rate cut ever. The benchmark lending rate dropped a full percentage point, to 2.75 percent.