Thailand Weighs Economic Impact of Protests

The spokesman of the opposition People’s Alliance for Democracy (PAD), Parnthep Pourpongpan, on Friday rejected calls to end the occupation of the airports.

``We don’t worry about the public backlash because we follow the constitution – we still have a right to continue our rally peacefully. That is what we are doing – we are going to fight,’’ said Parnthep.

Emergency declared

Prime Minister Somchai, after an emergency cabinet meeting in the northern city of Chiang Mai, declared a state of emergency with police in charge to move against the protestors.

Kudeb Saikrajang, a spokesman for the governing People’s Power Party – said that under the decree, emergency zones were to be created around the airports. ``The government has to order the law enforcement officers to their duty to clear the area,’’ said Kudeb.

Protests will hit the economy

But while tensions in the capital rose amid fears of a fresh military coup, many analysts said the main casualties from the political standoff were the country’s reputation and the vital tourism and export goods industries. Billions of dollars have been lost over the past week in lost revenues.

Sompob Manarangsan, an economist with Chulalongkorn University, said the impact of the protests would cause significant damage to the Thai economy in the medium term, and undermine investor and traveler confidence.

``It will erode the Thai image and the confidence of the foreign community towards long term development in Thailand, because they can see that the mechanism used by the people here in Thailand to resolve the conflict will be very ineffective,’’ said Sompob.

One of the hardest hit sectors is tourism. The protests came at the start of the peak tourism season. The sector accounts for about six per cent of the Thai economy’s national output. The main international airport serves about 40 million passengers a year.

Deterrent for tourists

It is feared that the income from tourism could be cut by a half of the six-point-eight billion dollars over the peak season. Luzi Matzig, a senior director of travel operator, Asian Trails, expects the impact of the occupation to extend over the next few months. ``People who have planned their holidays – they want to be able to get in and out – and if that isn’t assured they will go to other places,’’ said Matzig.

Matzig, who has over 20 years experience in the Indochina tourism and travel industry, said the crisis was the most severe he had seen. "This is a man made crisis. If we have a tsunami or a bird flu or something like that we face the music – people understand it’s beyond control. But this is self-inflicted harm, which is really stupid."

Even after the airports are cleared, Thailand's crisis is set to continue.