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Baht/$ 33.49/53
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GOLD |
14,000
- 150
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INVESTMENT
CHAROEN KITTIKANYA
Japanese investors admit that concern over Thailand's political instability are growing amid ongoing anti-government demonstrations, but that any real impact has yet to be felt.
''Political stability is the key fundamental for the government's economic management and administration,'' said Yoichi Kato, chairman of the Economic Research Committee of the Japanese Chamber of Commerce in Bangkok.
''We see the PM's office still failing in its effort to mobilise co-operation between the six deputies of the premier in handling economic management and administration more effectively.''
Mr Kato, also president of the Japan External Trade Organisation (Jetro) in Bangkok, urged authorities to manage economic and social issues more wisely.
''The [protest] rallies may affect the smooth execution of the government's policies and affect certain businesses to some extent, but we have not envisaged any serious impact on Japanese businesses and investment plans,'' he said.
''Three-month advance space bookings at Jetro's Business Support Center by Japanese investors who plan to invest here in Thailand, for instance, are still intact, with no one cancelling their bookings.''
Mr Kato also ruled out any possible adverse impact on Japanese investment even if the government were to bow to anti-government protesters' pressure and shake up the cabinet or dissolve the House. He said that the democratic system was still functioning.
According to the latest Japanese Chamber of Commerce Business Survey conducted from April 30 to May 30, the major problems affecting the Thai economy over the next one to two years were oil prices, inflation, higher prices of steel, raw materials and intermediate goods, and exchange rates.
A survey of senior executives of 337 Japanese corporations doing business in Thailand said business sentiment in the first half of 2008 was seen as ''improving'' from the second half of 2007, particularly for the automotive, chemicals and transport equipment sectors.
The survey noted the baht's appreciation and rising raw material costs had put pressure on certain industries including electrical and electronic goods, transport and communication in the first half of this year.
It also found the amount of planned capital investment in the manufacturing sector by Japanese firms in 2008 increased by 28.5% to 56 billion baht from 43.57 billion last year.
A healthy trend was seen in particular in transport equipment and electrical and electronic goods, with the investment of the two sectors estimated at 30.69 billion baht (up 42.9%) and 13.98 billion baht (up 25.1%) respectively.
''Thailand has a lot greater competitiveness right now [for Japanese investors], particularly as Vietnam struggles from high inflation, labour strikes and increased wages in Ho Chin Minh and surrounding cities,'' said Mr Kato.
''Vietnam still has poor infrastructure and lacks deep-sea ports, which make it tough for heavy industry investment.''
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