The Thai capital, Bangkok, is relatively quiet, despite authorities refusing to negotiate with anti-govenrment protesters until they end their nine-week occupation of a central commercial area. Soldiers have surrounded the demonstrators for a fifth day to pressure them to leave, leading to sporadic clashes that raised the death toll to 68 people killed since April. Earlier, hopes for a ceasefire were raised when a group of Thai senators offered to mediate peace talks between the government and protest leaders, who welcomed the offer. But Thai authorities dug in their heals, refusing talks until after the protesters leave. [...]The Wall Street Journal reports in the following article that the Red Shirt camp somehow received fresh food supplies. This dashes the government's earlier hope that with food supplies dwindling the protestors would only be able to hold out a more days. The supplies "carried in takeout styrofoam containers in a pickup truck" probably got past the security cordon because of sympathetic police and/or military guards; see my previous post today.
Meanwhile, the economic toll from the standoff has risen steeply for Thailand. Business analysts assumed at first that the crisis would blow over within a couple weeks. Now that it's dragging into nine weeks with no end in sight, and with the threat of a bloody crackdown that could further distance foreign investors, the economic picture at this time is bad for Thailand. This could have big ramifications for the ASEAN region.
WALL STREET JOURNAL - May 18 - 4:01 PM EDT:
Thai Srife Threatens Investment
By PATRICK BARTA And ALEX FRANGOS
BANGKOK—Thailand's standing as a major investment destination is coming under question as its government fails to resolve the country's bloody political crisis and economic damage mounts.
The crisis was already causing severe damage to Thailand's economy before the latest spasm of violence. But the killings have added a new dimension, forcing businesses to contemplate more drastic steps to ensure safety of their employees and causing some foreign investors to wonder if Thailand's deep social divides can ever be repaired.
Some companies are considering moving employees to hotels near the airport so they can escape more quickly if street violence spreads, while others are shifting their foreign direct investment, or FDI, to other countries entirely.
"Unless the crisis is resolved, law and order restored and a credible process of reconciliation begun, Thailand will probably lose out in the FDI stakes for a long time," says Manu Bhaskaran, chief executive of Centennial Asia Advisors, an economic consulting firm in Singapore. Even longtime investors are wondering "should I be engaged at all" in Thailand, says David Fernandez, a managing director at J.P. Morgan in Singapore.
Tüv Süd, a German company that conducts product testing and industrial certification, with operations throughout Asia, was about to make an acquisition of a Thai oil-and-gas-services firm when the protests intervened.
"Because of the instability we are holding off," says Ishan Palit, chief executive of Tüv Süd's Asia operation. With his German bosses generally eager to expand in Asia, those resources will now go to places such as Malaysia or Indonesia, he says. "Until two weeks ago, the view was still that it was going to come back and be all right," he says. But now, "it's gotten more serious."
Thailand's problems are "a bit more fundamental" than the past, adds Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney. "It makes it difficult to justify major allocations to Thailand," he says. "I can find other countries that are more attractive without having to worry about the political situation," he says, including stock markets such as South Korea and Taiwan.