Ja­panese con­cerns over Thai econ­omy

The Myanmar Times - - International Business -

THAI­LAND’S big­gest for­eign in­vestor, Ja­pan, has said that it will of­fer sup­port to its firms in the king­dom as con­cerns grow that the death of its rev­ered monarch could de­rail the Thai econ­omy.

Ja­pan has more than 4000 com­pa­nies op­er­at­ing in Thai­land, dubbed the “Detroit of South­east Asia” due to the huge num­ber of auto man­u­fac­tur­ing plants.

“The gov­ern­ment will of­fer ap­pro­pri­ate sup­port to Ja­panese com­pa­nies if nec­es­sary so that the im­pact on them would be kept to a min­i­mum,” top Ja­panese gov­ern­ment spokesper­son Yoshi­hide Suga said.

He did not elab­o­rate on what sort of help – fi­nan­cial or oth­er­wise – Tokyo might give.

Con­cerns over the fu­ture of the coun­try have been lin­ger­ing with the ail­ing health of the world’s longestreign­ing monarch, who has played a role of me­di­a­tor at times of po­lit­i­cal tur­moil dur­ing his 70-year reign.

King Bhu­mi­bol Adulyadej passed away on Oc­to­ber 13 at the age of 88 after years of ill health.

“Sig­nif­i­cant near-term dis­rup­tion is likely,” John Mar­rett, re­search an­a­lyst at the Econ­o­mist In­tel­li­gence Unit, said in a com­men­tary.

“We are ex­pect­ing a slow­down over the next 12 months.”

Thai stocks re­bounded sharply on Oc­to­ber 14 after plung­ing ear­lier last week as an­a­lysts warned about the pos­si­ble fall­out – po­lit­i­cal and eco­nomic – from the king’s death.

Ja­panese auto giants Toy­ota and Honda said it would be busi­ness as usual for their fac­to­ries in Thai­land.

But Ja­panese me­dia have quoted un­named in­sid­ers at firms op­er­at­ing in Thai­land who said they wor­ried they might have to shut plants be­cause Thai em­ploy­ees could be re­luc­tant to work as the na­tion mourns the king’s death.

Re­leas­ing new prod­ucts dur­ing the one-year mourn­ing pe­riod could be seen as in­sen­si­tive, they added.

“Our fac­to­ries in Thai­land will keep op­er­at­ing as usual,” Toy­ota spokesper­son It­suki Kurosu said of the auto gi­ant’s three plants.

Ri­val Honda also said it would keep its four Thai plants run­ning, in­clud­ing three auto fac­to­ries and a mo­tor­cy­cle fa­cil­ity.

But “if the Thai royal fam­ily or the gov­ern­ment is­sues in­struc­tions [to halt op­er­a­tions] then we’ll com­ply with them,” added Honda spokesper­son Ta­mon Kusak­abe.

While much of Ja­pan’s in­vest­ment in Thai­land – about US$4.2 bil­lion last year alone – is based in man­u­fac­tur­ing, more and more ser­vice sec­tor firms have opened up in the coun­try in re­cent years.

Ac­cord­ing to Thai gov­ern­ment fig­ures, the econ­omy grew 2.8 per­cent last year fol­low­ing record tourist ar­rivals and a ramp-up in in­fra­struc­ture spend­ing by the rul­ing junta.

But while that is three times faster than in 2014 it is still a lot slower than the 6.5pc seen in 2012.

There is also con­cern about the im­me­di­ate im­pact on the key tourism sec­tor dur­ing the mourn­ing pe­riod after the gov­ern­ment asked the pub­lic “to re­frain from hold­ing en­ter­tain­ment ac­tiv­i­ties for one month”.

Thai­land’s no­to­ri­ously rowdy nightlife, red-light dis­tricts and beach par­ty­ing on its south­ern is­lands are top draws for a tourism in­dus­try that has kept the econ­omy afloat as other sec­tors fell flat. –

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