The private sector has grown increasingly concerned about the delay in the new government’s formation, which could affect new investments and the tourism sector.
Following the Election Commission’s (EC) resolution on Wednesday to recommend the Constitutional Court disqualify prime ministerial candidate Pita Limjaroenrat and suspend his parliamentary duties because of his ownership of shares in a media company in violation of electoral rules, Poj Aramwattananont, vice-chairman of the Thai Chamber of Commerce, said the private sector can accept any actions that comply with constitutional law, which is considered paramount.
IMPACT INEVITABLE
The delayed formation of the government may affect the confidence of new investors who are planning to enter the market, he said.
The private sector is also concerned that if the delay persists, it will greatly mar investor confidence because they want to know the policies of a new government and cabinet. These policies will influence their decisions on future investments, said Mr Poj.
Existing investors may continue their investments, but potential new investors may delay their decisions, he said.
As long as political protests are peaceful, they do not threaten the business environment, said Mr Poj. However, if they are not peaceful, it is the responsibility of the government to ensure law and order to prevent hassles for the travel and tourism sector, he said.
“The caretaker government should continue its work. The private sector and civil servants should continue to work together without interruptions,” said Mr Poj.
“Proactive policies that require decisions may be affected because it may not be appropriate for the caretaker government to make such decisions. However, if it is necessary for the country, the caretaker government should consult with the Election Commission, such as preparing a new budget to ensure investments will continue.”
THE SOONER, THE BETTER
Somchai Lertsutiwong, chief executive of Advanced Info Service, would not comment on a long delay in government formation, but he said the sooner a new government is created, the clearer economic drivers can be determined.
The new government should prioritise improving the capability of small and medium-size enterprises (SMEs) by reducing their operational costs to pave the way for long-term growth, said Mr Somchai.
The government should promote medium-term development by restructuring economic growth drivers in order
‘‘ Violent protests would definitely have an effect on foreigners planning to travel to Thailand, especially first-time visitors.
to push sustainable growth, he said.
PROTEST CONCERN
Sanga Ruangwattanakul, president of the Khao San Business Association, said the delay in government formation is not the most critical concern compared with street protests.
Many civil groups on Wednesday announced demonstrations nationwide after the EC’s resolution.
Mr Sanga said if the situation worsens, Thailand could develop a negative image among potential visitors.
He said violent protests will definitely affect foreigners planning to travel to Thailand, especially first-time visitors, which account for roughly 60% of all visitors.
Repeat visitors are unfazed by political unrest and know how to avoid conflict zones, said Mr Sanga.
He said the most likely scenario could be protests similar to the 2019 demonstration in Hong Kong, which affected foreign nationals who were new to the city.
Tourism operators hope the political tension will not escalate and the government formation will finish as soon as possible, said Mr Sanga.
Upathum Nisitsukcharoen, president of the Event Management Association, said the group is concerned that if street protests turn violent, will affect both government and private investment.
“The event segment is greatly affected by political protests because the majority of rally venues are in areas where events are organised. Nobody will hold events if they are concerned about safety issues,” Mr Upathum said. Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), said he is more concerned over the unpleasant impact on budget planning in the new fiscal year and business confidence if the parliamentary vote for a new prime minister is prolonged.
“We need a new government to drive the country, especially to work on budget allocation,” he said.
If the selection of a new premier remains unclear in the parliamentary session on Thursday, the Thai economy will be affected because of the uncertainty, said Mr Kriengkrai.
He said neither businesses nor consumers want street protests if the Move Forward Party leader is not voted in as prime minister because protests may deal a further blow to business confidence.
These issues should be decided in the parliament, said Mr Kriengkrai.
LABOUR EFFORT
In a related development, with a new government unsettled and the deadline for registering the names of undocumented workers approaching, Mr Poj said the private sector is preparing to propose the caretaker government help extend the deadline.
In a move to ease the foreign worker supply, on July 5 the cabinet passed a resolution approving a special case for foreign individuals who lack legal status to continue working without work permits until July 31.
Employers are required to submit a list of their foreign workforce needs along with photographs to the Employment Department by July 31. The registrar issues receipts of the lists, which foreign individuals can use as evidence they were granted permission to work until July 31.
“The private sector continues to rely on foreign workers to drive the economy and businesses, particularly in the tourism and service sectors, construction, real estate, food processing, as well as several SMEs. These sectors still face labour shortages and have high demand for workers to support the country’s economic growth,” Mr Poj said.