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3 years ago
UPDATE 1-Investment requests to Thailand tumble this year amid unrest, coup
June 10, 2014 / 11:56 AM / 3 years ago

UPDATE 1-Investment requests to Thailand tumble this year amid unrest, coup

* Says local, foreign investment requests tumble 42 pct in Jan-May y/y

* Investment hurt by prolonged political turmoil

* Army took control on May 22 to restore order, confidence (Adds foreign chambers' comments)

By Orathai Sriring and Kaweevit Kaewjinda

BANGKOK, June 10 (Reuters) - The value of applications to invest in Thailand fell 42 percent in January-May from a year earlier, the Board of Investment (BOI) said on Tuesday, referring to a period of political unrest culminating in a military coup.

Months of political unrest also hurt consumption and cut public spending. The army seized power on May 22 in a bid to restore order and business confidence.

The total value of investment applications fell to 308 billion baht ($9.5 billion) in the first five months of this year from a year earlier, Udom Wongviwatchai, the BOI's secretary-general, said in a statement.

Within that, foreign investment requests dropped 10 percent to 230 billion baht, he said.

Investment requests from Japan, Thailand's biggest investor, fell to 72.8 billion baht in the first five months, Udom said. He gave no comparison but the BOI website gave a figure of 168 billion baht for the same period last year, meaning requests had dropped 57 percent this year.

Over the same period, investment pledges from the European Union jumped 300 percent to 64.2 billion baht, while those from the United States surged 570 percent to 41.2 billion.

Investment bids from Chinese firms increased 260 percent in the first five months to 9.4 billion baht, while those from South Korea rose 150 percent to 12.3 billion baht.

In the first five months, some 139 billion baht in investment applications came in from 10 big car firms wanting to make energy-efficient cars under a government-sponsored initiative.

Thailand is a regional vehicle production and export base for the world's top car manufacturers and some foreign investors think Thailand is still a good bet.

"Cars produced in Thailand are world quality. To set up a network that is able to produce cars to those standards is not so easy," said Yeap Swee Chuan, president of the Malaysian-Thai Chamber of Commerce

"The infrastructure and the situation here will attract even more companies that want to export from Thailand."

Brian Sinclair-Thompson, vice chairman of the Joint-Foreign Chamber of Commerce in Thailand, said: "We need the international community's understanding and a first-hand acknowledgement of just how safe and secure it is in Thailand to be doing business.

"Whenever we've had a downturn, we've come back bigger, better and stronger," he added.

Last week, Air Chief Marshal Prajin Juntong, who is overseeing economic matters for the military government, said he expected that applications from local and foreign investors to invest more than $21 billion would be acted on within two months.

Processing of these applications was held up by the turmoil as the country was without a proper government from December until the army took control in late May.

$1=32.5 baht Reporting by Orathai Sriring; Editing by Nick Macfie

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