To the outside world, the picture of Thailand is one of crisis and chaos.
The tension has been bubbling for years, some will say since the ousting of PM Thaksin Shinawatra, but in reality Thailand is no stranger to upheavel and political turmoil. Since absolute monarchy ended in 1932, there have been 27 prime ministers, 18 constitutions, 11 successful coups and a number of tempestuous demonstrations.
So, whilst the face-off between the Red Shirts and the Government is most unfortunate, and any loss of life is a terrible consequence, this is not insurmountable for Thailand.
Such a history of tension has inevitably led to a relatively steely resolve amongst the Thai people and institutions. Quite simply, they’re not fazed easily.
Even international instituions and investors take the troubles in their stride, and this has been reflected by the Thai economy remaining relatively steadfast, and indeed economic indicators are so far quite robust.
As Tim Johnston of the Financial Times stated, it looks “like the country’s economy is sailing in the opposite direction to its politics”.
There is no doubt that businesses at the centre of Bangkok demonstrations have been hit hard. And of course tourism, which accounts for approximately 6% of GDP, is feeling the strain, although resorts locations such as Phuket and Koh Samui are certainly better than Bangkok. Fortunately the turmoil coincides with the low season, so this is somewhat of a blessing.
The staples of the Thai economy, motor vehicle manufacturing and financial services are, however, looking good and GDP growth for 2010 is expected to be 4.3 – 5.8%, thanks to an improving global situation and Thailand’s export driven economy.
Thailand is indeed a strong survivor, and if there are signs that some investors are fleeing, this is simply a good opportunity for others to flock.
Nevertheless, let’s hope a solution to the problems is around the corner.